In search of InsuranceTech – what have we learnt so far?

By Rick Huckstep

It was three months ago that Bernard Lunn first introduced me onto the Daily Fintech. My goal; to find innovative and disruptive InsuranceTech startups within the world of Fintech.

Having published an article every Thursday since that introduction, I thought it timely to review what I’ve found so far and where we go from here on this journey…. which I can assure you is far from over! (And selfishly, I am also taking advantage of a break on my schedule to go to Le Mans for the 24-hour race!)

So far I have featured 14 InsuranceTech startups and interviewed the CEO or Founder of 7 of them.

The first startup I interviewed was RiskEraser and with the charismatic CEO, Max Steinmetz. RiskEraser offer a mobile distribution platform for protection insurance to brokers. They also offer a sharing economy platform to provide short term, simple and easy to buy protection insurance for the growing bread of sharing platforms.

A personal favorite of mine was RecordSure, not just because I have known the CEO, Joanne Smith for best part of a decade, but because I feel the whole complaints and miss-selling culture has gotten out of hand. Some might see the £39bn of fines for the top 5 banks in the last years as a convenient way to recycle money back into the global economy. Sure, these trusted institutions should pay the price for their failings, I see an unhealthy culture of ambulance chasers and litigators cashing in on their mistakes and poor conduct. RecordSure is a fabulous solution that can prevent the errors of the past from being repeated in the future.

Based in Paris, Meteo Protect is an insurance and reinsurance broker who offer financial products that protect companies and institutions when weather conditions adversely impact their business, profits and costs. This company blew me away with the sheer scale of the volume of data that they can handle. The ability to align seasonal variations in climate conditions to the P&L of a business and sales performance was mightily impressive.

For this blog, I explored the sharing economy and peer-to-peer insurance market. I covered three very different insurance startups, starting with Guevara – a car insurance startup that offers lower cost cover by grouping friends and family together. The group shares the collective benefit of no claims as a discount against next year’s premium. The concept behind Guerva is particularly interesting with regard to the moral hazard and it will be interesting to see if this group behavior will lead to lower claims costs over time.

Next came Bought by Many who are an intermediary that provides insurance protection products on a bulk-purchasing model. Consumers with the specific requirements are grouped together to buy insurance in bulk from the carriers and in so doing, they share the discount or preferential terms of business between them that comes from there collective power.

Finally, I featured German based Friendsurance and their peer-to-peer insurance model based on the concept that everyone in a social network shares a small cost of any claim. For example, I prang my car, and the 12 people in my network all pay £50 towards my costs. The insurer then rewards the group because they have not had to pay out as much as they had provisioned against the policy.

Abaris are a one of kind intermediary of retail income annuity products in the US. Their real-time integration with 8 of the top 15 providers of annuity products allows Abaris to model an ‘apples for apples’ comparison for consumers. The platform normalizes the language and terminology that often confuses consumers. It also allows consumers the flexibility, in real time, to adjust key variables, like retirement age and indexation and model how this will impact their annuity income.

I met with CEO and founder, Risto at a coffee shop in the City to hear the story of how Insly grew out of a successful broker business in Estonia. This SaaS platform is a lower cost alternative to the traditional approach of building and installing a software package. Insly’s subscription model is transparent and the platform is so easy that I created my own broker model on a free one-month’s trial!

moneymeets do so much more than more than just providing a cash-back insurance proposition. moneymeets is a one-stop shop, financial portal that provides retail consumers with a single view of their financial position. With money management being the trend across financial services, moneymeets are the first to market in Germany providing a comprehensive and transparent offering in this space.

In the first of a two part blog, I featured the highest valued Insurancetech startup in the list of Fintech unicorns – Zenefits. Zenefits have disrupted the US healthcare market in the way that they have gone to market. Zenefits provide a free to use HR SaaS platform to SMEs. The SMEs use the platform to buy health insurance, and other employee benefits.

The theme of the US healthcare market continued a week later when I looked at the impact of Obamacare and new heath insurance player, Oscar. Valued as the second highest Insurancetech in the unicorn list, Oscar distribute healthcare insurance through the Insurance Exchanges. Where they differ is that they do it through a digital customer experience, from providing access to online clinicians, to a Facebook-like interface, to offering a reward of $1 a day for increasing the amount the consumer walks per day.

Telematics is on the cusp of being main stream and to illustrate the two different types of insurance product, I contrasted two of the pioneers in the UK and the US markets. In the US, Metromile distribute a Pay Per Mile auto insurance product. The driver literally just pays for the miles they actually drive. And the app is integrated with Uber and can distinguish between an Uber mile and a Metromile mile. This is of real benefit for the urban drivers who are willing to care share using the Uber commercial (and insurance) agreement.

This is a different approach to Ingenie, who are the UK startup that shaped the market for the 18-25 year old drivers. Using a telematics ‘black box”, Ingenie can track how driver behavior and match them to the conditions of the policy that drive down the cost of insurance. This information is available to the driver, acting as their “co-pilot”. Which ultimately leads to safer drivers! (BTW – these highway new comers are all too aware that Dad will know when they are speeding!)

Finally, (for now anyway), I skyped with CEO and co-founder Adrian Rands of QuanTemplate. Adrian not only told me about the power of their data analysis and presentation platform, he showed it too me! Unlike anything else on the market today, QuanTemplate are addressing the challenge in the reinsurance market for the rapid analysis of mass volumes of data from disparate sources. Handling 50 million rows of data in 900 milliseconds is, quite simply, awesome!

And the journey continues!

One area I have not yet covered is claims and I will be turning my attention in this direction in the near future. I can already see the application of blockchain technology to ensure immutable records and remove the reliance on “trust”, and the crowd sourcing of loss adjustors to reduce the cost of claims.

Geographically, I plan to look further afield too. The journey so far has stretched from Estonia to the US with stops in Germany, France and the UK on route. But this Western perspective only draws part of the picture.

Asia is an area of great interest, especially given the shift in insurance business to the East. So is the developing world and areas such as micro insurance for the under-insured, financially disadvantaged, but mobile-enabled masses. And down under, Australia has been always ahead of the rest of the world when it comes to calling out the impending pension black hole or reversing the payment flow from push to pull.

In the first three months, I’ve found more InsuranceTech than I knew were there…now I must continue the search…the journey goes on!

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