Eight startups aiming to transform the Life Insurance business #Insurtech



Photo Credit: https://www.flickr.com/photos/thomashawk/

This is part two of research by guest author Amy Radin on the Life Insurance business. In Part 1 last week, Amy outlined the fundamental business issues behind the decline in Life Insurance and the white space opportunities this opens up for entrepreneurs. In today’s research note, Amy looks at 8 startups aiming at the white spaces.

The life insurance industry is suffering from a dying (literally) distribution model, complex products and a flawed purchase funnel.

New entrants can transform the industry by bringing a clean-sheet approach to:

  • Putting the client at the center of the business
  • Prioritizing the direct-to-client experience including simpler product and path-to-purchase
  • Launching businesses on a back-end that enables low-cost, fast issuance, and personalized underwriting and offers
  • Creating business models that align carrier and client interests, and flex beyond protection-after-the-fact to providing value through prevention services
  • Supporting multi-channel servicing and claims management that satisfy clients
  • Using data responsibly to be proactive, personalized, timely, cost-effective and relevant
  • Treating life insurance as part of the client’s broader financial plan including the connection to anticipating one’s health care requirements and managing the drivers, to the extent these are controllable, of health problems.
  • Aligning with the trends: (1) demographics: the boomer handoff to the millennial generation and the emergence of the new majority in the US, and (2) technology: mobile as the main screen; the role of social media in the client experience; and the application of big data to change the experience and business model.
  • Disproving orthodoxies that have become barriers to innovation for the sector, i.e., “insurance is sold not bought,” “the agent is the customer,” et al.

As much as startups are emerging and being funded aiming at health, home and auto, much less attention is being paid to either life insurance or its sibling, long term care.

One Founder/CEO with whom I spoke this week had two possible explanations: (1) life insurance is the stepchild of the sector, and (2) the “sold not bought” orthodoxy is embedded, even among startups, who are typically seen as better not only at casting aside such self-imposed obstacles, but seizing upon them as open doors for disruption. These factors may be deflecting entrepreneurial energy and attention in other directions.


Long-term care has been a challenging product for traditional carriers, with players either abandoning the product or re-pricing and reconfiguring their products as flaws in earlier underwriting have become clear. According to Consumer Reports, between 2007 and 2012 ten of the 20 top long-term care providers stopped selling the product, and those in the business began raising rates, some reportedly as high as 90%, to address high claims projections.

That said, there are new ventures worth watching, and the good news about the relatively low level of attention being paid to life insurance, for those who see ignored space as white space, is that there could be more opportunity to succeed for those who engage.

Here are a few startups focused on the valuable white spaces:

In stealth mode are three companies worth keeping an eye on:


  • Sureify Labs is focused on “bridging the gap between insurers and their current and future policyholders” through a B2B offering aimed at helping traditional carriers move into the new world. The Company’s site states that the platform “starts with consumer web and mobile applications that drive engagement through device-integrated wellness, savings and rewards programs tied to a policy. Behind the scenes, we give you as the carrier all the tools necessary to engage, communicate and up-sell your policyholders through digital mediums.” This sounds as though it would be a dream-come-true for carriers who are serious about building client-centric businesses.
  • Ladder, formed just a year ago (see: CB Insights report) is reportedly starting with a mobile value proposition built around easier and faster access to term life insurance, using available, permissible data sources to improve the underwriting process. If, as the name suggests, the company is building a value proposition that redefines the traditional notion of an insurance ladder – a construct that lets you plan for extra coverage when you’ll need it the most and taper off coverage at other times – I would expect them to develop more dynamic, effective relationships with clients than those propagated by the traditional one-and-almost-always-done insurance sales model.
  • Human Condition Safety (HCS’ site is under construction) is an example of a startup focused on expanding the value a life insurance carrier can provide by offering prevention services in addition to protection. AIG became a strategic investor in the company earlier this year. HCS is said to be “developing wearable devices, analytics, and systems to improve worker safety.”

A number of startups are building capabilities to solve carrier problems improving on the traditional distribution and product models. An investor might ask if these are businesses or features:

  • Force Diagnostics is focused on “combining science and a customer-centric streamlined process” to transform health and wellness screening. The expense (to the carrier), hassle (to the applicant) and elapsed time (a burden to all) associated with today’s underwriting requirements for blood and urine samples are ripe for reinvention.
  • Insurance Social Media, part of Serious Social Media, is offering a “set it and forget it” capability to improve agent effectiveness on social media. Given the demographic profile of the average agent (57 years old, and accustomed to pushing product), kick-starting their social media presence and providing relevant content solve pain points for today’s distributors. Of course, two questions regarding any startup aiming to mass-produce content are: first, can such content come across as authentic, and second, how does this model scale?
  • Insquik offers agents a white label solution to create their own online stores. The focus is on term life automatic issuance up to $350,000 face value, and according to the Company’s site, aims specifically to serve the sub-segment of agents who “have access to large populations of consumers i.e., focused on Worksite Employee Benefits, Affinity Groups, Unions, Groups and Associations.”
  • Fitsense is a startup coming out of StartupBootcamp that is building a data analytics platform focused on enabling insurance companies to reduce premiums “for anyone with a smartphone or wearable device.”
  • Sure provides a digital front-end and a more real-time experience for an old idea – a micro-duration life insurance policy that provides coverage during air travel. (In the pre-digital era this was simply called “per trip coverage”.) American Express is one company that for over 30 years offered air flight life insurance policies at varying face amounts, as part of a portfolio of travel-related protection benefits.

The opportunity for insurtech to expand efforts in the life insurance category is not simply the commercial potential of disrupting a model that has proven its limitations. It is also the prospect of addressing a societal need that has been neglected for decades. These are two compelling reasons to encourage more participation by investors and entrepreneurs, stimulating a bigger pipeline of entrants to take on the reinvention of the category.

Amy Radin connects customers to companies to create growth. She brings an unexpected combination of insight, reinvention and pragmatism to companies in transformation. Amy serves on Advisory Boards, is an angel investor, keynote speaker, and workshop facilitator. She consults with companies from startups to Fortune 500 applying her Framework for New Growth (c) to help companies attract new clients and expand client relationships.

6 thoughts on “Eight startups aiming to transform the Life Insurance business #Insurtech

  1. It’s great to see continued advancement with technology in the life insurance industry. LadderLife looks the most interesting however it’s apparent with more tracking, health and wellness devices that insurers could use this data in big ways. Looking forward to seeing how these companies grow over the next 10 years!


    • Thanks Jake, will add it. If you go to the Fintech Genome http://genome.dailyfintech.com where you can engage in existing conversations like this and initiate new conversations (and directly correct information) and add more information such as this that you think the Global Fintech community will find interesting. We created Fintech Genome as a P2P Knowledge Platform for the global Fintech community and your insights would be most valuable there. Bernard


  2. The life insurance industry, including its distributors, have systemic problems not mentioned here. Unfortunately, they will not be fixed by technology innovations. Technology will certainly enhance the overall industry, it will by no means solve its core issues.

    There is very little demand for life insurance other than basic income replacement and the demand for it is not impressive. Agents cannot survive on that market alone. When the estate tax rate was reduced and the individual lifetime exemptions were increased to more than $5MM, the need for permanent life insurance on a large scale vanished over night. That void has not been replaced. The industry is reeling and term sales to millennials is not the solution.

    Life insurance suffers from an image problem. It is a serious one, reflected by evidence anywhere you look. Asking the distribution system to solve the industry’s core product’s image problem is not working well for carriers. Agents are dropping out of the industry in record numbers. The carriers do not advertise or market their product, the need for their product, the benefits of life insurance or any other relevant aspect of life insurance. It is time for the life insurance companies to step up and promote their products, which make real differences in people’s lives, the way Apple promotes its products.

    The entire distribution system suffers from a lack of transparency and disclosure around compensation. There is not a single compelling argument that makes the case for this practice. As a result, life insurance professionals are devalued by the market. There is nothing wrong with earning compensation for selling a product, whatever that compensation may be and in whatever form is best suited for each sale. It is time to shine the light here.


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