A lot of InsurTech ventures were funded in 2015 and H1 2016. In the future, which of them will we all proclaim with 20/20 vision that “their success was obvious”? Which ones will be doing an IPO in 2026 after a 10 year gestation period? We decided to crowdsource the question on the Fintech Genome, the leading P2P Knowledge Network dedicated to Fintech.
Lemonade not winning over the Show Me state
Somebody nominated Lemonade (our coverage of Lemonade here) and Rick Huckstep rightly pointed out “they’ve not yet opened for business…maybe that’s because they’ve a PR machine setting the level of expectation. If they deliver on their promise, then you wouldn’t bet against them.”
Lemonade would not win over the Show Me state of Missouri.
Rick nominated Trov as the one to watch (our coverage of Trov here).
Look at lower hanging fruit in P&C.
Amy Radin suggests looking at the lower hanging fruit in P&C:
“The bigger winners will come faster in personal P&C especially auto, than in health. Innovations in P&C are further developed, and even with the advent of the sharing economy and the promise of driverless cars there is still room and time to improve upon what it means to insure your car(s).”
Focus on the Liability side of ALM
Insurance, like Banking, is all about Asset Liability Management (ALM).
Eric Forgy explained why we should focus on the Liability side (aka Underwriting) when nominating Montoux as one of his two picks (his other pick was Embroker which recently concluded a $12.2m Series A round).
“One area I don’t see discussed much is the asset & liability management side of insurance. Montoux is doing some interesting work on the “L” side and we are focused (for the time being) on the “A” side, e.g. balance sheet projections, strategic asset allocation, etc. (which obviously depends on the “L” side).
As a former risk officer and key member of both regional and local asset & liability management committees across Asia, I see some real pain points and opportunities for InsurTech in ALM. Our goal is to seamlessly take insurers from raw data to the boardroom instantly. A process that currently takes teams of 5+ highly skilled risk professionals weeks to achieve (I know, because I was doing it).”
Montoux pitched in to clarify that they don’t currently do anything with underwriting. They provide a pricing application that helps streamline the product development process.
Devie Mohan agreed with the focus on Underwriting and had two nominations in that space:
“I am also excited by some of the underwriting disruption insurtech’s coming up – they may not get the interest or valuations Oscar has, but they can definitely add value in the ecosystem. Two interesting ones are CoVi and Riovic.”
Interesting to note that CoVi is from New Zealand and Riovic is from South Africa, both far removed from the usual Fintech hothouse locations.
Oscar and the HealthCare hairball
Somebody nominated Oscar (our coverage of Oscar here) and this brought in Amy Radin who is not only an InsurTech expert but also based in America. It is hard to understand the giant hairball called US Healthcare unless you have had the ill fortune to interact with it.
Amy Radin cautioned us to get too excited about innovation in Healthcare:
“A “big winner” in health has to overcome the complexity (and life/death nature) of health decisions, redefine the drivers of the business model, and overcome the politics of healthcare in the US. Look to the lessons being learned in online lending for potential insight into insurtech”
In short, you need very deep pockets and a fundamental disruption to challenge huge incumbents.
Andre Faessler concurs and focussed on the political and regulatory risk (a big deal in this US election year):
“For the US it is most definitely politics and state law. Insurance agents must register with any state they do business and every state is unique. Not many doctors are digitally affine and a new patient must most often fill out bad copies of paper forms. The big insurance companies use often paper forms as well and as long the whole supply chain is not digital … P&C is a go and much more professional.
B2B will be the ultimate winners in 2017
Oscar Jofre focussed our attention to the near term success in the B2B space (which is consistent with a focus on transforming the Underwriting function). He rightly pointed our that a B2C venture takes a lot of time and capital vs the simple direct monetization in B2B.
One question (asked by Andre Faessler) that so far went unanswered is if any ventures are going after Title Insurance. If you have any insights on this, please go to this thread of the Fintech Genome to contribute your knowledge.
Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech & operates the Fintech Genome P2P Knowledge Network. Bernard Lunn is a Fintech thought leader.