It’s in rare lifetimes that people, businesses and economies get to witness a year like the one that ends today. Part pandemonium, part perturbing, the pandemic swooped over many in its wake and brought umpteen enterprises to a grinding halt. But, resilience triumphed and as businesses swung back, many found new opportunities to surge ahead.
For this end-of-the-year post, I have selected three entities for their recent announcements that represent the best of what happened in 2020 in the insurtech space.
Lloyds of London along with Insurtech Parsyl, launched a new vaccine shipment insurance coverage, called the Global Health Risk Facility (GHRF). Transporting vaccines is high risk, with around 30% of vaccine consignments globally lost to damage or theft. Covid-19 vaccine distribution is a hurdle as stakeholders fret over extra-cold temperatures required to transport vaccines. Theft and cyberattacks on the supply chain are inevitable.
GHRF is being supported by $26.7 million funding from the US International Development Finance Corporation. The loan will serve to capitalize a new public-private Lloyd’s syndicate and allow offering cost-effective insurance policies for shipments of vaccines and medical products to developing nations. It will begin underwriting in January. Called Syndicate 1796, it is the first public-private partnership to address a global health emergency in Lloyds’ history. Through this year, such public private partnerships for systemic risk coverage have been a topic of intense interest, with breakthroughs transpiring in earlier months.
The DFC loan will allow to offer cost-effective insurance coverage for storage and transit of medical supplies. Coverage is currently available to eligible low, lower-middle and upper-middle countries. It has the backing of 14 global (re)insurance companies. Lloyds plans to deploy Parsyl’s IoT sensors to protect and monitor critical shipments.
In Europe, neobank Revolut announced its partnership with Belgian insurtech Qover to provide embedded insurance to account holders. This comes close on the heels of its partnership with NTUC Income’s micro-insurance platform to offer flexible insurance.
Revolut is a US$5.5 billion challenger bank with 13 million customers, offering banking services including forex, travel services alongside stock, crypto and commodity trading. Rated as the most successful neobank on the European scene, its CEO says, “Revolut is not a marketplace, but (we) are a superapp.”
The neobank chose Qover to offer embedded insurance across 33 European countries, through one single technical integration, a feat that incumbents had difficulty pulling off. Insurance is now fully integrated into its banking app.
Embedded insurance is a $3 trillion market opportunity and is part of a wider movement towards embedded finance, writes transformation specialist Simon Torrance. As Efi Pylarinou summarizes very well, “Super Apps are the natives in the East and their approach has been strongly validated during the recent crisis. The West in on its own journey that is focused on re-bundling which varies by region and is shaped by regulations and culture.”
US insurtech Oscar Health, the latest with plans to go public, has confidentially filed for IPO. Started in 2012, the company is headed for a traditional IPO instead of SPAC. Operating in more than a dozen states, it sells individual, family and small-group plans, with more than 420,000 clients.
Till date, it has raised $1.6 billion and recently completed a $140 million funding round. With $2 billion in annual revenue, Oscar is the first health insurer to offer 24×7 telemedicine services for no extra fee. Current estimates show that 30% of its members turned active telemedicine users this year, compared to 10% in the rest of the US.
LMND stock went public this year with great hype. The stock is up more than 150% since its July debut. The ease, digital access and focus on younger customers made it exceedingly popular. Investors will pin hopes on Oscar’s IPO, as it promises to digitize health insurance.
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