热带风暴带来的保险热点

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What follows is a Chinese translation of today’s InsurTech post on Daily Fintech by Stephen Goldstein, with translation by Zarc from InsurView. This article will also appear in Chinese on the InsurView site. To read more Fintech content in Chinese, you can scan the following QR code by Wechat and subscribe to InsurView’s Wechat account.

以下是今日DailyFintech发布的由Stephen Goldstein撰写的InsurTech文章的中文翻译,由InsurView的Zarc进行翻译。 本文也将在InsurView网站上以中文显示。 要阅读更多Fintech的中文内容,您可以扫描以下二维码,并订阅InsurView的微信公众号。

 

我希望本文的标题不会对任何近期遭受热带风暴不幸的人造成消极影响。祝愿所有人都能安然度过这次自然灾害。

近期的几次热带风暴在这几周的时间内一直是新闻头条,不仅仅因为它们对人们的家庭和事业造成了巨大的影响,还因为人们非常关注保险将在灾后重建过程中发挥怎样的作用。

在关注这些消息的同时,我也在为即将第一次参加的Insuretech Connect会议做着准备。在看了下会议事项和发言人名单,以及其他保险和保险科技领域内的新闻后,我打算列一下我希望在Insuretech Connect中了解的事情以及与各位参会者讨论的议题。

(接下来的内容也将是对我未来文章内容的预告)

灾难——提醒了我们保险有多重要

前几天我用谷歌搜索了一下关键词“飓风 保险”,弹出了大量搜索结果,以下是部分标题:

洪灾保险费率受到飓风影响

在遭受自然灾害后,如何从保险公司获得最多理赔

厄玛飓风将重击保险业——预计已造成650亿美元损失

作为保险业的从业人员,以上的文章让我想起了保险行业的三大基石。这三大基石对于保险的供应链来说至关重要,而且,作为保险创业者,不管你处于供应链的哪一环,理解这三大基石对于业务发展都至关重要。(这三大基石对于所有类型的保险都适用)

这三大基石分别是:

1、定价

定价是否合理,关系到保险公司的收入是否能够覆盖其日常运营的开支以及是否有着足够的资金储备以保证其偿付能力。

2、资金储备

关系到保险公司的偿付能力。

3、理赔

智能合约是保险(以及其他行业)的未来

安盛集团上周上线了一款全新的旅游险产品,利用基于区块链的智能合约实现了理赔的自动化。虽然安盛并不是第一家发布智能合约保险产品的公司,但作为一家大型保险集团,他们应用区块链技术意味着整个保险行业和金融产业正在对区块链进行着积极的尝试。这一趋势之所很重要,是因为它将对第三块基石——理赔产生重要影响。区块链对于保险发展所能带来的裨益是另一个话题了,我将在以后的文章中重点分析。

上周我和一位业内极具影响力的人物有过交谈。在交谈中,我们都认为,客户对保险产生感觉的转折点就在理赔环节。大量的保险科技创业公司都将创新的重点集中于售前购买环节,而致力于改善理赔环节的创新并不多。理赔环节其实有很多值得思考的地方:

1、在客户提交理赔申请后,你应该如何回应呢?

提交理赔申请时,客户往往会处于情绪不稳定的状态(比如身体出现异常,遭遇车祸,亲人去世等)。保险公司需要如何做出反应,如何与客户感同身受,如何帮助客户处理事故呢?

如果有安盛的这款产品,那投保人甚至都不需要主动进行理赔申请。这其实就是保险公司能为客户提供的最为体贴的服务了。安盛如此说道:“我们发现您的航班被延误了,我们已经将赔付款项打到了您的账号中。祝您接下来的旅途愉快!”这体验不错。

2、理赔标准是如何评估的?是根据明确透明的流程和规则制定的呢?还是由理赔员自己臆想的?

3、理赔速度能有多快?

目前的市场上有很多针对上述问题的解决方案,但大部分都只致力于解决一个问题。而且,在小微型保险产品中,这些问题更容易得到解决。随着完整的保险科技服务逐渐进入寿险和健康险领域,这些问题需要进行更深入的分析和解决。

接下来的话题和飓风无关,是关于保险科技和再保险公司的。

保险科技不需要传统保险公司,但需要再保险公司?

上周,车险公司Metromile宣布和JLT再保险建立合作伙伴关系。我已经关注保险科技很久了,因此我很对于再保险公司(特别是慕再和瑞再)在保险科技领域的巨大投入感到震惊。但深入思考之后,这其中的原因也很明显。保险公司利用再保险公司来转移自身的业务风险。但是保险科技公司如果为传统保险公司带来行业效率提升、成本降低、动态定价以及理赔率降低等诸多益处后,使其面临的业务风险大大降低,那么传统保险公司是否还需要如此多的再保险公司来转移自己的风险呢?

很明显,再保险公司并不想面对这个问题的答案,所以他们那么主动出击,布局保险科技,希望在未来能占据主动,甚至获得保险产业的主导权,从而确保自己的饭碗不被抢走。

既然说到了再保险公司与旅游保险,大家可以看一看这篇文章

我很期待在下周的Insuretech Connect会议上和大家见面,探讨上述问题。

Tropical storms pour flurry of topical Insurance news in advance of Insuretech Connect

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I do not want the title of this week’s post to upset anyone who has been affected by any of the recent storms we have seen hitting the US or Caribbean Islands.  My thoughts and prayers do go out to those and their families that were caught in these awful storms.

These storms have been in the headlines for weeks, not only for the devastation that they are causing to people’s homes and businesses, but also, how insurance will play into the process of rebuilding in these areas.

In parallel to reading the various articles about this, I have also been preparing to attend my first Insuretech Connect in a couple weeks time.  As I have been reading through the various topics and speakers that will be available, along with other current news relating to Insurance and Insurtech, I wanted to list out some of the things I’ll be looking to learn about more and discuss with those of you attending Insuretech Connect.  

(This is also some foreshadowing to some more detailed topics I will discuss in future posts!)

Catastrophes – reminding us just what is important about Insurance

Doing a quick Google news search of the terms ‘hurricanes insurance’, the other day, a variety of headlines came up, a sample of which included:

Flood insurance rates impacted by hurricanes

How to get the most from your insurance company following a natural disaster

Hurricane Irma will hammer insurance industry — up to $65 billion in damage is projected

As an insurance professional, these articles bring to mind the 3 pillars of Insurance. These three pillars are critical in the Insurance supply chain, and wherever you sit in that chain when it comes to Insurtech, you need to understand these 3 fundamental things (these pillars are applicable to all types of insurance, not just catastrophe insurance).

  1. PricingWas the policy I purchased priced properly to take care of the costs of the insurance company running their business and will they have enough
  2. Reserves – to pay my
  3. Claims – in a timely manner.  Cue…

Smart contracts are the future of Insurance (and everything else)

AXA has launched a new travel insurance product last week which will utilize smart contracts based on the blockchain to payout claims.  AXA is not the first to launch an Insurance policy with a smart contract, but it does represent a trend for both the Insurance and financial services industry as a whole to migrate to blockchain.  The blockchain and it’s uses and benefits for the Insurance industry are a completely separate topic that I will write on in another post.  This trend is so important because of the third pillar, claims.  

In a conversation I had last week with someone influential in the Insurance industry, we agreed that the key inflection point for a customer in the Insurance supply chain is at the point of claim.  While many Insurtech startups and Insurance incumbents are focusing on the purchasing experience of Insurance for a customer, I don’t see enough focusing on the claims process.  Claims have many areas to think about:

1) How do you respond to a policyholder the moment you know they have to make a claim?  Making a claim means that you have just had a potentially devastating moment in your life (health procedure, car accident, death of a loved one, etc).  What is the first reply an insurance company gives to a policyholder when they find out they make a claim?  How do they demonstrate empathy with this customer, who may be dealing with tragedy?

With AXA’s product, a policyholder doesn’t even need to file a claim.  That’s the best reply an insurance company could give me when needing to make a claim…’We realize that your flight was delayed and we’ve credited money into your account as part of the claim for the coverge you have bought.  There is nothing else you need to do now…enjoy the rest of your travels.’  Brilliant!

2) How was the assessment of the claim done?  Was it based on a predetermined set of rules that was clear and transparent or was a decision made by some claims adjustor without any reason?

3) How quickly will the claims get paid?

There are many solutions that are in the market now which address these questions in silo.  Further, it is much easier to address these questions in more common, smaller-sized claims.  As full stack Insurtech moves more into the life and health space, these questions will need to be more closely analyzed and carefully addressed.  

The next topic does not relate to the recent news on Hurricanes, but was in the news last week and are very interesting when it comes to Insurtech, and is a common theme we have covered here in Daily Fintech before

Insurtech doesn’t need Insurance incumbents, right Reinsurance incumbents?

Last week, Metromile announced their partnership with JLT Re.  Since I have been following Insurtech, I was amazed by the amount of work being done by Reinsurers in this space (particularly Munich Re and Swiss Re).  I say I was amazed, because once I thought about it more, it made complete sense as to why they are.  In the most basic of explanations, Insurers use Reinsurers to pass on some of the risk it takes on from the business it writes.  However, if Insurtech, and the various benefits that can be brought to an Insurance incumbent in terms of more efficient and dynamic pricing, better claims ratios with less fraud and less expense overhead with use of digital (to name a few), will those same incumbents still need to pass on that risk to Reinsurance?  Well, it seems to me that Reinsurance incumbents don’t want to know the answer to that question, and that’s why they are so keen to enter the Insurtech space with authority and dominance – to ensure their relevance in the future.  

Speaking of Reinsurers and travel insurance…

I look forward to seeing many of you at Insuretech Connect in a week and a half to discuss these topics and more!

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Stephen Goldstein is a Rainmaker, Insurance aficionado and Insurtech deal-maker.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world.  Ride the Fintech wave by reading us daily in your email

What’s happening in the Insurtech innovation scene in London

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London is still the most vibrant Insurtech innovation ecosystem, despite the momentum we have been reporting on in Berlin, Zurich, India, China and Singapore.

To learn what is happening in the Insurtech innovation scene in London we interviewed Robin Merttens who, with some partners, runs InsTech London

You call it Instech, we call it Insurtech, but we won’t call the whole thing off. 

Collapsing Value Chain

Robin described how Insurtech is moving beyond the early buzz created around P2P, drones, Blockchain and AI as concepts. The focus now is on solving actual pain points that the incumbent insurance industry fully recognizes, the most pressing of which is how to better engage with customers. There is less hostile talk of disruption and more about the power of partnerships.

The backdrop to all of this is the collapsing value chain in Insurance.  This is what we have referred to as Reinsurance As A Service.

Leading the way is MunichRe with Digital Partners. We profiled 8 ventures that have partnered with MunichRe here. One example that Robin referred to is the Blink travel insurance app, which would not have worked in the old horizontal stack but works well when a new venture like Blink can simply plug into the someone else’s insurance infrastructure. This is a win/win for Reinsurers and for startups. As Robin acknowledged, what’s taking people by surprise is how easy it is disrupt traditional Insurance carriers in this way. It was always assumed that brokers would be disrupted, but the collapsing value chain with startups at the top of the stack focused on user experience and Reinsurance at the bottom of the stack focused on data, underwriting models and capital leaves the middle of the stack including the insurance carriers, vulnerable to disruption. Robin told me that the leading Insurance carriers have accepted the InsurTech reality and are devising and executing strategies to evolve within this new reality. He mentioned innovative work being done by Axa, Allianz and Aviva. There is now an understanding that Insurance carriers will compete with their brokers in some classes and that Reinsurance will compete with their Insurance carrier customers. Even if public statements don’t reflect this, privately this reality is acknowledged.

That does not make it easy for digital insurance startups. Robin emphasized the brand value and safety factor that consumers seek from an insurance vendor and how a full stack Insurance startup needs many $ millions in their marketing budget to overcome this.

Robin also talks about the core of Insurance being the pooling of risk and how that is hard for a startup insurer because they don’t start with a pool of risks and that early customers may be the customers who self-select a startup carrier because they are high risk. Lemonade is possibly one company that understands this well and can overcome the problem.

Ask It Never

Robin reckons that 90% of Insurtech investments today are consumer related. That is where innovation around user engagement is so critical. One user engagement area that Robin highlighted was how to solve the form filling barrier, which has such a big impact on the customer experience and therefore the Customer Acquisition Cost (CAC). This is a data game. If there is enough data from existing internal and public sources, the user does not need to enter much new data. Self -learning machines only works well if they have the data to work on.

Robin mentioned what Aviva is doing with Ask It Never. This confirms what we have observed as the difference between how banks reacted to the first signs of disruption (largely ignoring it until late in the cycle) to how Insurance companies reacted to the first signs of disruption (innovating and engaging with the market).

Although most investment is going into consumer, Robin suggested that SME was a great InsurTech opportunity where the same models can be applied. The data is all there in SME, e.g. in Companies House and other sources of open data.

Lack of investable talent with Insurance expertise

Robin highlighted something that is very different in banking. Too many startups lack investable talent that combine a) digital/tech expertise b) entrepreneurial execution track record and c) a deep understanding of how Insurance works. You need all three to succeed. The last one – a deep understanding of how Insurance works – is often missing. In Banking, there are plenty of ex Bankers willing to join a digital startup (because the writing has been on the wall for a while). In Insurance this is much less true, perhaps because InsurTech is newer or due to the natural risk aversion of anybody who chooses Insurance as a career path.

Investors

Robin confirmed that early stage funding was the issue. Lots of ventures wanted to come in at the Series A and beyond stage, but most investors were running from the early stage risk. He mentioned two specialist InsurTech venture funds who are targeting this early stage with 100% focus on InsurTech:

EOS Ventures out of London.

InsurtTech.VC out of Cologne

In the Blink of an eye

Robin mentioned Blink in two ways. One was to illustrate what we call Reinsurance As A Service. We had briefly mentioned Blink when we looked the 8 ventures that have partnered with MunichRe here.

Robin also mentioned Blink in the context of investable talent, referring to Paul Prendergast as the kind of investable talent that every investor wants.

Investors will have to wait because Blink is already showing an exit only 6 months after being founded. It is an aptly named venture!

The exit amount was only EUR 1m. That is an amount that would be a failure if they had raised VC, but it was self-funded. EUR 1m for 6 months of work is good and shows the power of Apps plugging into an insurance platform. The acquirer, CPP, is a UK public company with a market cap around $172m.

This is a sign of what we are hearing anecdotally from many entrepreneurs. If you have the metrics that will enable a Series A, you also have the metrics that will enable an exit. The smart entrepreneurs go into that phase weighing up both options.

Bernard Lunn is a Fintech thought-leader, investor and deal-maker. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

 

What yet another InsurTech in Berlin (Element) reveals about Brexit 9 months post the earthquake 

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This was not a planned three-parter. The fact that our last 3 InsurTech posts all feature Berlin ventures – WeFox, Simplesurance and now Element – was not planned. It simply turned out that way, because Berlin seems to be where the action is in InsurTech today.

The story about Element and TIA is not just about Berlin. It also reveals how fast an innovation platform is forming in InsurTech. More on that later.

The 1,2,3 story of WeFox, Simplesurance and now Element all being from Berlin did prompt me to look at the state of VC in Berlin and the post Brexit landscape 9 months after the earthquake and the Fintech Capital of the World debate.

9 Months after Brexit

The dust has settled. Article 50 has been triggered. It is time to take stock. Disclosure, I am British but have lived most of my life outside Britain (Asia and America and now Switzerland) and from that global perspective Brexit looks like a mistake. Plenty of good friends and family disagree and this is not a political site, so I will restrict my comments to Fintech.

We have not seen any dramatic game of thrones type drama in Fintech. No single city has grabbed the Fintech capital of the world crown. What we have seen, which could be as bad in the long run is multiple hubs all with a specialty taking parts of London’s business such as:

In the Fin part of FinTech we are also seeing Dublin, Frankfurt and Paris get some trading rooms moving from London. The big driver is the automation of trading. Relocation and regulation is simply background noise. It was reported that Goldman Sachs replaced 600 traders with 200 engineers. This makes it natural for big global banks to consolidate operations back home. When traders go, the back office and tech and all the supporting functions do eventually go as well. So I think German banks will go to Frankfurt, French Banks will go to Paris, American Banks will go to New York and so on.

The one center that might be different is Dublin. The soft factors – language, culture, fun – make Dublin attractive in a way that Frankfurt struggles with (and Paris for all its great charms struggles with if you are not French). A Brit can feel at home in Dublin (this post in the Guardian outlines the issues for bankers considering relocation). What I envisage for Dublin is less corporate relocation and more like Hedge Funds moving from Manhattan to Connecticut. These will be “privileged refugees” who leave a bank in London to to set up shop in Dublin for some new tech enabled “techfin” hedge fund or prop trader venture.

This shows that the post Brexit landscape is becoming decentralized. There is no single hub. Instead we are seeing networks emerge with each node in the network serving key functions. In this emerging reality, corridors become key. These corridors, such as between Zurich and Berlin as illustrated by WeFox, are more important than individual hubs.

Let’s look at the story about Element and TIA to see how it illustrates how the Innovation Capital funnel in Berlin is forming.

The Innovation Capital funnel in Berlin

The story about Element and TIA is by itself not that significant. It caught my eye simply because it was one more Berlin + InsurTech story within weeks and my mantra is:

Once means nothing, twice is coincidence, three times is a trend.

So I went digging to see what could explain this trend. What hypothesis fits the observation?

If you go to Element you see a digital insurance startup saying they are “A new way 
to think about insurance”. The jaded journalist response is that sounds like so many other startups.

The PR announcement is that they have partnered with TIA Technology. This is a well-established Danish company that provides software to insurance companies. TIA falls into what we call Traditional Fintech.  This part of the story illustrates a theme we have covered on Daily Fintech about how Traditional Fintech is transforming to become a platform for Emergent Fintech (i.e for companies like Element).

The Berlin Copenhagen partnership also shows that geographic Europe is more important than bureaucratic Europe or monetary Europe or regulatory Europe.  This geographic Europe has shared culture, timezone and travel connections. The UK is part of geographic Europe. That is simply fact. The timezone and the travel distances are fact not opinion. The culture is more about opinion and point of view and on that front, Brits are divided. If the UK goes isolationist within geographic Europe and breaks the cultural ties, my country will turn a problem into a disaster. I don’t think that will happen.

Culture beats strategy. Culture also beats capital and regulation.

There is a European culture. You may love it or hate it, but it does exist. This European culture coexists with a German culture, a Danish culture, a Swiss culture and so on and has nothing to do with Brussels or the Euro.  I hope it will continue to coexist with a British culture.

However that is only one part of the story. The other part of the story is FinLeap, a Berlin based Fintech accelerator (or “company builder” which is the term that they prefer and which I also think is better).

Jaded journalist response – ho hum, yet another accelerator. Accelerators (or incubators or company builders or venture engineers or whatever label marketing wants to apply) are critical to crossing the chasm from MVP to PMF, but they hardly new.

FinLeap is also a new venture. So it is worth checking to see who is behind FinLeap. Crunchbase tells us that FinLeap closed a EUR21m round in June 2016 (Brexit earthquake month as it happens) from two investors:

  • HitFox Group. This is another Berlin based company builder that is not Fintech specific but which has some good Fintech ventures in its portfolio.  Why one company builder invests in another company builder is the subject to be explored later. What is clear is that Berlin already has a reputation for good execution by company builders, thanks to the pioneering (and occasionally controversial) work of Rocket Internet.

It will be interesting to see how BAFIN reacts ie how quickly Element gets a license. The components of a successful Fintech Hub, which Berlin is clearly becoming, include forward-thing, tech savvy regulation.

Glass half full view of decentralisation for London

There is a glass half view of decentralization for London if you see this within the context of that “mother of all Hubs” known as Silicon Valley. It is a power law graph where all the other Hubs (even big ones like London, New York and Singapore) are simply part of the long tail.

At least that is how it was in the past.

If there is only one crown, only one Fintech Capital of the World, then it belongs to Silicon Valley. Period, end of story. Silicon Valley has more great ventures, more capital and more venture scaling expertise than all the other hubs put together.

However, if the future looks more decentralized, both technically (e.g. Blockchain) and economically (the diffusion of capital and expertise around the world), then the idea of a single dominant hub will fade away.

Alert: in each major transition, Silicon Valley  has been counted out and yet has found the key to unlock value. Proclaiming that “this time is different” is dangerous.

Silicon Valley residents will breathe a sigh of relief – maybe traffic jams on Route 101 will decrease and house prices will come down to earth.

In that decentralised networked world, London will have a more level playing field with Silicon Valley – and with Berlin, Luxembourg, Dublin, Paris, Zurich, Geneva, etc.

Londoners who want to drive value creation for an ecosystem in London need to think about what role to play in this more decentralized, networked world. Hanging onto Fintech Capital of the World dreams maybe as counterproductive as hanging onto Imperial dreams.

Image Source.

Bernard Lunn is a Fintech thought-leader and deal-maker. 

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.

As this is another InsurTech success story from Germany we again asked Karl Heinz Passler (initiator of InsurTechTalk.com) to translate this article into German .

Ein weiteres InsurTech Startup (Element) tritt 9 Monate nach dem Brexit in der Fintech Stadt Berlin ans Tageslicht

Ursprünglich hatten wir gar keinen Dreiteiler vorgesehen. Unsere drei letzten Artikel handeln jedoch von den Berliner InsurTech Startups – WeFox,  Simplesurance und jetzt Element. Da sich in Berlin derzeit so viel ereignet, hat sich dies so ergeben. In diesem Artikel über Element und TIA geht es nicht nur um Berlin, es geht auch darum, wie sich in Berlin eine Innovationsplattform für InsurTech entwickelt. Später mehr dazu.

Die drei Ereignisse von WeFox über Simplesurance und jetzt Element (alle aus Berlin) habe ich mir zum Anlass genommen, die aktuelle Entwicklung von VC in Berlin näher anzuschauen.  Insbesondere 9 Monate nach dem Brexit und den Debatten über die zukünftige Fintech-Hauptstadt der Welt.

9 Monate nach dem Brexit

Der Staub hat sich gelegt. Der Artikel 50 wurde nun ausgelöst. Es ist Zeit sich die Sache mal genauer anzusehen. Um ehrlich zu sein, ich bin ein Brite. Ich habe allerdings die meiste Zeit meines Lebens außerhalb gelebt (Asien, Amerika und jetzt Schweiz). Aus meiner globalen Perspektive sieht der Brexit allerdings wie ein Fehler aus. Meine Familie und viele meiner Freunde sind anderer Meinung. Da dies kein politischer Blog ist beschränke ich also meine Kommentare auf Fintech.

Wir haben keine dramatischen Szenen wie bei Games of Thrones gesehen. Keine einzelne Stadt hat versucht die Krone für die Fintech-Hauptstadt der Welt zu ergreifen. Was wir allerdings beobachteten und dies könnte langfristig genau so negativ wirken, ist dass sich mehrere Städte als spezialisierte Drehkreuze etablieren und London damit Geschäft wegnehmen, wie z.B.:

– Berlin für InsurTech, was wir heute beschreiben

– Zürich und Zug für Bitcoin sowie Blockchain Crypto Währungen

– Luxemburg für Finanztransaktionen

– Estland für digitale Identität und E-Governance

Im Fin-Teil von FinTech beobachten wir in Dublin, Frankfurt und Paris den Umzug einiger Handelsräume von London weg. Der Haupttreiber ist hierbei allerdings die Handelsautomatisierung. Echte Umzugspläne und Regulierungsanforderungen sind hier eher Hintergrundgeräusche. Es wurde berichtet, dass Goldman Sachs 600 Händler und 200 Techniker ersetzte. Wenn die Wertpapierhändler wegfallen, trifft dies auch das Back-Office und die Techniker sowie alle weiteren unterstützenden Funktionen. D.h. große globale Banken haben es mit der Automatisierung nun einfacher ihre Niederlassungen an ihrem jeweiligen Heimatsort zusammenzuführen. Daher glaube ich, dass deutsche Banken nach Frankfurt gehen werden, französische Banken nach Paris und amerikanische Banken nach New York gehen.

Nur bei einem Finanzzentrum könnte es  anders verlaufen, Dublin. Die weichen Faktoren wie Sprache, Kultur, Unterhaltung machen Dublin auf eine bestimmte Art attraktiv, mit der Frankfurt zu kämpfen hat (und Paris mit all seinem Charme kämpft, solange man kein Franzose ist).

Ein Brite kann sich in Dublin zuhause fühlen (Guardian Artikel). Daher bewerte ich einen Umzug nach Dublin eher wie den Umzug eines Hedge Funds von Manhattan nach Connecticut. Mitarbeiter dort sind dann eher wie “privilegierte Flüchtlinge” zu sehen, die in Dublin eine Niederlassung oder Filiale mit FinTech unterstütztem Fonds- oder Handel eröffnen.

Dies zeigt dass die Post Brexit Landschaft immer dezentraler wird. Es gibt kein einzelnes zentrales Drehkreuz (Hub) mehr. Stattdessen sehen wir Netzwerke entstehen, bei denen bestimmte Knotenpunkte wichtige Schlüsselfunktionen für das gesamte Netzwerk erfüllen.

In dieser nahen Zukunft werden Korridore zum Schlüssel.

Diese Korridore, wie zwischen Zürich und Berlin (Beispiel WeFox) sind wichtiger als einzelne große Knotenpunkte. Schauen wir uns an was bei Element und TIA passiert, sieht so aus als ob in Berlin gerade eine bedeutende Innovationsplattform entsteht.

In Berlin entsteht eine neue Plattform für Innovation und Kapital

Für sich gesehen ist die Sache mit Element und TIA nicht so bedeutsam. Sie fiel mir nur ins Auge, weil sie ein weiteres “Berlin und InsurTech Ereignis ist” und mein Mantra lautet: Einmal ist kein Mal, doppelt ist ein Zufall und drei Mal hintereinander ist ein Trend. Also ging ich der Sache nach um zu sehen welche Hypothese diese Beobachtung bestätigt.

Wenn man sich die Elements Seite anschaut, sehen sie ein Versicherungsunternehmen, dass aussagt “Eine neue Art über Versicherungen zu denken”. Für Journalisten bedeutet dies, bitte Hinten anstellen. Die Pressemeldung beinhaltet die Ankündigung mit TIA zusammenzuarbeiten. TIA ist eine bekannte und etablierte dänische Firma die Software für Versicherungsgesellschaften anbietet bzw. herstellt.

TIA ist in unseren Augen ein traditionelles Fintech. Was das ist haben wir in diesem Artikeln beschrieben: Traditional Fintech is transforming to become a platform for Emergent Fintech (i.e for companies like Element).

Die Zusammenarbeit zwischen Berlin und Kopenhagen zeigt, dass das geografische

Europa enger zusammen sizt als das politische Europa und das Europa aus finanztechnischer Sicht. Dieses geografische Europa teilt sich eine Kultur-, Zeitzone und hat gemeinsame Reiseverbindungen.

Großbritannien ist ein Teil des geografischen Europas; mit fast der gleichen Zeitzone und kurze Reisedistanzen, dies sind Fakten. Die britische Kultur ist jedoch gespalten in die welche Britannien getrennt und in die die Britannien gemeinsam mit den Festland-Europäern sehen wollen.

Aber ich glaube nicht, dass meine Landsleute dieses Problem in eine Katastrophe verwandeln werden. Kultur schlägt Strategie. Kultur schlägt auch Kapital und Politik.

Tatsache ist, es gibt eine gemeinsame europäische Kultur. Sie können es lieben oder hassen, aber diese Kultur existiert gemeinsam mit der deutschen, mit der dänischen, einer schweizer Kultur und so weiter. Und dies hat nichts mit Brüssel oder dem Euro zu tun. Ich hoffe dies wird es auch weiterhin in der britischen Kultur geben.

Das ist aber nur ein Teil der Geschichte. Der andere Teil ist FinLeap. Ein Berliner Fintech Accellerator bzw. Company Builder (was ihre Tätigkeit zutreffender beschreibt). Der normale Journalist denkt sich dabei, ah noch ein Accellerator, stell dich am besten gleich hinten an.

Accelleratoren und Company Builder sind wichtige Akteure die helfen die Kluft zwischen

MVP und PMF zu überbrücken (crossing the chasm). FinLeap ist ein junges Unternehmen. Also schauen wir nach was sich dahinter verbirgt. Crunchbase sagt: FinLeap schloss im Juni 2016 (während des Brexit Monats) eine Finanzierungsrunde über 21 Mio. Euro ab. Zwei Investoren waren an dieser Transaktion beteiligt:

– Hannover Rück, eine der größten Rückversicherungsgesellschaften der Welt. Dies passt zu unserem Artikel ” Reinsurance As A Service”

– HitFox Gruppe. Ein weiterer Berliner Company Builder, der zwar nicht Fintech spezifisch ist, aber einige interessante Fintech Beteiligungen in seinem Portfolio hat. Warum sich ein Company Builder bei einem anderen investiert wird noch aufgezeigt. Klar ist aber, dass Berlin bereits einen guten Ruf im Bereich der Company Builder hat, dank der (gelegentlich auch umstrittenen) Pionierarbeit von Rocket Internet.

Interessant ist, wie schnell die BAFIN reagiert und Element eine BAFIN-Lizenz zum Betrieb eines Versicherungsunternehmens erteilt. Die Erfolgs-Komponenten für einen erfolgreichen Fintech-Standort (Hub), was Berlin eindeutig beabsichtigt, sind vorwärtsdenkende Akteure und technikfreundliche Regulatoren (IHKs und BAFIN).

Bezüglich der Dezentralisierung ist das Glas für London halb voll

Aus der Sicht von London sieht das Glas halb leer aus, wenn man  dies im Kontext der “Mutter aller Hubs” bekannt als Silicon Valley sieht. Es ist ein ganz anderer Hebel, wenn alle anderen Hubs (auch große wie London, New York und Singapur) einfach nur ein Teil des Rattenschwanzes sind. Zumindest war es so in der Vergangenheit. Wenn es nur eine Krone gibt und nur eine Fintech Hauptstadt der Welt, dann gehört diese Silicon Valley. Punkt, Aus, Ende der Geschichte. Silicon Valley hat mehr Unternehmen, Finanzierungskapital und Skalierungspotenzial und Know-how als alle anderen Hubs zusammen. Aber die Zukunft wird dezentraler sein, sowohl aus technischer Sicht (z.B. Blockchain) als auch aus wirtschaftlicher Sicht (durch die Verbreitung und Verfügbarkeit von Kapital und Fachwissen über die ganze Welt). Die Bewohner des Silicon Valley können erleichtert sein, vielleicht gibt es bald weniger Verkehrstau auf der Strecke 101 und die Immobilienpreise könnten sinken. In dieser dezentralisierten und vernetzten Welt wird London eine bessere Chance haben sich  gegen Silicon Valley zu behaupten, ebenso gegen Berlin, Luxemburg, Dublin, Paris, Zürich, Genf usw.

Londoner die hierzu einen Beitrag leisten wollen, sollten darüber nachdenken, welche Rolle sie in dieser dezentralisierte, vernetzten Welt spielen wollen. Träume wie die “Fintech Hauptstadt der Welt” sind wahrscheinlich genauso kontraproduktiv wie der Traum des “Britischen Imperiums”.

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Bernard Lunn is a Fintech thought-leader and deal-maker. 

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We interview Joe Taussig to learn whether insuring the unpredictable is the big InsurTech disruption

4-layer-insurance-stack

Our thesis was that InsurTech works through a 3 layer stack:

This post explained the thesis

On Monday we interviewed somebody in Zurich who helped us see that it is really a 4-layer stack.

Most people understand layers 1 and 2. This is where you interact as a customer. The agents are being replaced by digital automation. This is the simple comparison and matching function that Fintech is ideally suited for. The question is how you build value before the Internet giants (GAFA and BAT) move in?

Therefore, the limelight has been on P2P Insurance and whether that is a game-changer. For a debate on that subject, please go to this thread on the Fintech Genome.

Sitting down to talk with Joe Taussig in Zurich on Monday brought out the possibility that the disruption is in Catastrophe Bonds aka Cat Bonds. Indeed, this interview made me revise the 3 layer stack thesis. It really is a 4 layer stack, with the Capital Markets as layer 4.

Joe Taussig is the founder of MultiStrat Holdings.

Lots of people understand layers 1 and 2. A few people understand layer 3. Only a really small number of people properly understand the intersection between layer 3 and layer 4.

Joe Taussig is one of those few people. .

It was an honor to talk to Joe. Talking to the smartest people in the market is one of the privileges of what we do at Daily Fintech.

How MultiStrat Holdings works

Their customers are Hedge Funds. Hedge Funds have an asset liability mismatch problem. Investors in Hedge Funds want liquidity, yet Hedge Funds invest in assets that have long term liabilities and place bets that may take a while to pay off. Getting redemption demands is a problem for Hedge Funds.

Joe Taussig saw how Warren Buffet used Reinsurance and then Insurance (Geico) to get a low cost of capital and permanent capital (there is no redemption demand in equity) and used that knowledge to offer a service to Hedge Funds. Without going into the mechanics of how they do this (check this video if interested) suffice to say it involves using Reinsurance and Insurance.

Redrawing the stack with 4 layers

Below Reinsurance in the stack are the Capital Markets. This takes one back to the early history of Insurance when Lloyds “names” were individual investors who got great returns in return for offering unlimited liability.

That worked great…until a catastrophe happened. From this were born Cat Bonds (Catastrophe Bonds) and Insurance Linked Securities (ILS). In layman’s terms a catastrophe is an event that statistical modelling did not predict properly – think fierce weather, cyber attacks, terrorism etc.  We have touched upon this subject here. In this post we looked at how Blockchain is being used for Catastrophe Swaps.

As seen from the Insurance layer of the stack, MultiStrat Holdings is using the deep resources of the capital markets to lay off the risk of these events. Seen from the capital markets layer of the stack, MultiStrat Holdings is offering permanent capital.

The Reinsurers are well capitalised, but are nothing compared to the deep pools of the capital markets. Savvy investors know there is no such thing as bad risk, just mis-priced risk. So capital markets offer deep capital pools and risk pricing.

Understanding Insurance as a 4-layer stack is key to understanding how and when disruption will hit this huge business.

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Reinsurance As A Service

insurance-stack

A major thesis at Daily Fintech, outlined in our first post on 29 June 2014, is that we are witnessing a  transformation driven by Fintech that is similar to when the PC stack replaced mainframes. We moved then from vertical integration (mainframe vendors controlled the whole stack) to horizontal layers (Intel, Microsoft, PC Manufacturers, Applications). 

In Fintech we are moving from vertically integrated banks, brokers and insurance companies that control the whole stack to a horizontal stack with services at the application layer by consumer facing born-digital ventures.

Despite the historical parallel to the Wintel stack, we see little chance that any one or two companies can control the bottom of the stack like Microsoft and Intel did in that era.

This big shift is happening even faster in Insurance than Banking thanks to Reinsurance As A Service.

Reinsurance As A Service

The insurance industry works through a 3-layer stack:

  • Layer # 1: Brokers. Their job is to gather premiums from customers.
  • Layer # 2: Insurance Companies. They take in premiums via brokers, invest the cash flow and pay out claims when needed. Their primary job is claims processing.
  • Layer # 3: Reinsurance Companies. They are the payers of last resort. They insure the insurance companies. Their job is to have enough capital to pay out claims, even if the models did not predict the volume of claims.

Reinsurance companies have five things needed to become an insurance platform:

  • Capital.
  • Regulated status.
  • Global footprint.
  • Domain experience.
  • Data and models used to price premiums. 

MunichRe Partnerships 

Let’s move from theory to practice.

Other Reinsurance companies are also active, but MunichRe is ahead of the pack so we analyze their portfolio first.

MunichRe created Digital Partners (DP) in May 2016 as an intrapreneurial startup within MunichRe to connect with consumer facing InsurTech startups. DP has a global mandate and operates across all retail and small company business classes from offices in London, Cincinnati & Palo Alto.

MunichRe have announced partnerships with 8 exciting InsurTech ventures:

This is interesting as they target niches within commercial insurance such as Commercial Photographers and Personal Trainers. Risk data is domain sensitive, so a niche by niche strategy makes sense. Before Reinsurance As A Service it would have been hard to imagine the economics of this niche by niche strategy working out. Look at the explosion of innovation at the Application layer on  top of platforms such as Microsoft and Apple App Store.

This is another example of a niche play on top of a platform. They focus on flight interruption insurance with a value proposition around real time resolution, claiming to proactively alert and rebook your flight at no cost if cancelled/delayed. As there is no claims process, the issue can be resolved in real time. They get  distribution through travel partners looking for ancillary revenue.

We have profiled Bought By Many here. Again, this is about niche segments, in their case enabled through collective buying power. Examples include pet insurance for rare breeds and travel insurance for people with medical conditions. The company claims over 250,000 users and year-on-year revenue growth of over 100%. They use customer feedback via social media to co-create products.

We profiled Simplesurance here. It is interesting that their lead investor is Allianz. These are clearly non-exclusive relationships.

Slice Labs focus on insurance for the sharing economy, because on-demand workers, such as those that work for ride share companies, are typically uninsured or underinsured. They are still in private beta. The level of product complexity, mixing disciplines from consumer and commercial insurance, would be tough for a startup without a platform and the level of agility to go after new markets like this tends to defeat incumbents.

So-sure is short for social insurance. You can “introduce your friends and benefit when they and you look after your items: the less you and your friends claim, the less you pay.”. An example is iPhone insurance. Again, imagine doing this without a sophisticated data and models to price the risk properly.

We have profiled Trov here. They focus on on-demand insurance for single items for whatever duration they want, such as sporting equipment, jewelry and valuables.

Wrisk is in stealth mode.

Conclusion

2016 was a year of Cambrian explosion for InsurTech. Investors all agree that InsurTech is the space to be. We could take an Eeyore view that it is all a bubble, but we incline to the Tigger case that we are just getting started. A big reason for optimism is the level of support for pricing risk properly that Reinsurance As A Service offers. A classic Eeyore comment would be “all this cute mobile stuff is all well and good but pricing risk is hard and needs a lot of experience and data and you need the capital to back that up”. Reinsurance As A Service fixes that.

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What happened in InsurTech this week

cowboy_roundup

We have rounded up the news and analysis that we think is important this week in InsurTech. Consider it your weekly briefing.

We are trying a new format this week. Please tell us if it is useful and how we can improve it. We aim to give you a weekly roundup of the InsurTech news and analysis that matters this week – Thursday is always InsurTech day on Daily Fintech. We have a self-imposed limit of 10. So if there are more than 10, we select what matters. We do not aim to be comprehensive, our aim is signal to noise ratio; we want to give you just enough to do your job. We will link to our trends & analysis posts for background as well as to the news source, so we can be brief on the individual news item.

Ladder, Life Insurance and the Reinsurance layer of the stack

The news event was that Ladder launched in California. Ladder did a big Series A with top tier firms in October 2016. We included them when we did our roundup of Life Insurance startups in July. For background on issues and opportunities in Life Insurance, read this post.

Ladder is an example of a venture benefitting from the 3 layer Insurance stack that we have referenced here. Their innovation is enabled by the Managing General Agent (MGA) structure offered by Reinsurers. The MGA structure enables the Reinsurer to maintain the balance sheet while the startup focuses on customer acquisition and user experience. This is a business structure that combined with tech innovation such as Open API is very powerful.

Reinsurers are in effect offering Capital As A Service. That is a game-changer.

JVP and AXA partner for InsurTech innovation scouting

Both incumbents and VCs need to scout for innovation. This news shows an incumbent Insurer – Axa – partnering with a VC firm – Jerusalem Venture Partners (JVP) to scout for innovation by the well-proven method of offering prizes in a competition. Often the incumbent Corporate Venture Capital (CVC) unit is seen as competition by traditional financial VC. This shows a trend to partnering where the incumbent has deep domain expertise and the VC has deep expertise in spotting, valuing and nurturing early stage ventures.

Forward – a new Healthcare Provider to challenge the Payers

Forward is offering a subscription medical service at $149 per month  that aims to be the Apple Store of doctor’s offices. Techcrunch has the details.

What Forward is doing is a bit like what we spotted in Dental, except this is not a cooperative. It is a for profit venture that uses a mix of new medical technology, a new real world customer experience and business model innovation to deliver subscription pricing. This hits a major theme that we have uncovered as we dig into the hairball mess of Healthcare in the US, which is that innovation by Insurance Providers is useless without innovation by the Providers.

To a consumer, what is the difference between a $149 per month subscription service and $149 per month insurance plan? Theoretically the latter gives you choice; in reality it tends to give you high deductibles and claim hassles.

This is the sort of innovation in the real world that we all want Silicon Valley to focus on. It is not just another digital front end. What they are doing is much harder than that – like building a Tesla car vs building a ridesharing app.

MunichRe appoints Robert Mozeika to head InsurTech

14 InsurTech Conferences in 2017

We are deep in snow season, but some are looking at when the flowers return with the conference season. Business Insider uncovered 14 InsurTech Conferences in 2017 around the world. I suspect there are a lot more, even if you leave out all the free but high quality MeetUp events. We really need a community generated calendar of InsurTech events by date, location and cost. I created a thread on Fintech Genome to initiate this.

Please tell us in comments about any major InsurTech news  this week that I missed.

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