The global insurance market has remained more or less untouched by philosophical shifts for decades. Yet thanks to a flurry of recent tech innovations, an influx of investment from venture capitalists and sky-high demand for bigger, better and faster insurance products, the sector is now engulfed in a proverbial evolution.
That evolution has been driven largely by a fresh crop of insurtech start-ups racing to leverage a variety of blockchain technologies, machine learning techniques and revolutionary product lines in order to squeeze out savings that can be subsequently passed on to customers and create an ecosystem of more efficient insurers.
“Insurance is sometimes described as being five-to-seven years behind the banks in embracing new technology,” explains Caribou Honig, co-founder and chairman of InsureTech Connect.
“Learning from the lessons of fintech, it’s clear that insurtech is ready for its inflection point. There is now so much ‘water behind the dam’ of potential value from technology— cloud computing, machine learning, drones, APIs, smartphone penetration, blockchain, and so on.”
“The water is spilling over and the dam is about to burst.”
At the start of 2018, there were more than 1,500 insurtech start-ups operating across the globe – and according to EY’s Global Insurance Trends Analysis 2018, they’ve generated more than $2.3bn worth of funding in the last year alone. That represents a 45% funding increase over the past five years, with substantial support from industry incumbents like AXA – which has already invested in around 20 insurtech start-ups.
The potential for rapid growth is particularly strong across Asia, where the introduction of new regulatory provisions have recently paved the way for more than 100 fresh insurtech start-ups.
According to Peter Bunus, CEO and co-founder of rising insurtech start-up CyStellar, it’s only a matter of time before these disruptors totally shatter the market’s 300-year-old definition of what it means to extend insurance coverage.
“Traditionally, insurers establish premiums while assessing risk based on claims made in the past,” he says. “Today, we can remotely detect risks, classify objects from the risk point of view, and consistently monitor risks even the most infinitesimal change over time. The insurtech mission for 2019 is to connect real-time data with insurance policies.”
“Welcome to the world of Internet of Policies.”
To help guide you through this brave new world, we’ve compiled a list exploring the 10 insurtech firms poised to disrupt the industry with major innovations in 2019.
Founded in 2015, London-based start-up Everledger styles itself as “the digital vault of the future”. Utilising blockchain-powered provenance tracking, smart contracts and machine vision, Everledger has digitised millions of diamonds, wine, art and other luxury items in order to create unique profiles for each item.
In turn, Everledger is able to prevent high-value fraudulent insurance claims, while protecting the value of gemstones throughout their respective supply chains and helping to support ethical and sustainable methods of mining diamonds. Everledger is already working alongside SAP and the Singapore Diamond Investment Exchange, and is set to launch the world’s first coloured gemstone blockchain solution for insurers in February 2019.
Based in San Francisco, Metromile is a niche auto insurance start-up that offers pay-as-you-go coverage to drivers. The pioneering pricing structure is designed predominately for car-owning city-dwellers who drive under 5,000 miles per year and relies upon a wireless device that plugs into a vehicle’s OBD-II port to securely measure the mileage count of a customer’s car and bill accordingly.
This offers up an easy and fool-proof solution in order to settle claim disputes, and an associated app can also help users find their parked car in a crowded parking lot. Monthly rates start from just $29 per month, with free mileage after a driver has travelled more than 250 miles over the course of a single day.
In July 2018, Tokio Marine Holdings and Intact Financial Corp led a $90m investment in Metromile with a view to help the start-up extend coverage to all 50 states in America.
Launched in 2017, Homelyfe is a UK-based insurtech start-up that seeks to offer customers a range of insurance policies they are able to manage from a single app. The app is designed to remove third parties, sales teams and comparison sites completely out of the equation by enabling customers to get quotes, purchase, manage and renew multiple insurance policies via their intuitive iOS and Google Play app.
Having launched its first insurance product at the start of 2018, Homelyfe claims to have slashed the process of securing a home insurance policy to under four minutes, and has its own rating engine and broker emulating system to pull third party data to expedite the process by learning as much as possible about users to cut basic questions out of the purchase process.
Ever since Barack Obama’s Affordable Care Act and his successor’s subsequent attempts to dismantle it, America’s health insurance market has been crying out for a new tech solution to offer customers personalised health plans they can actually afford. New York-based start-up Oscar has presented users with one intuitive solution.
Oscar is a sleek and intuitive app designed to offer free medical advice and over the phone prescriptions to Americans unable to obtain private medical insurance through their employers. Instead, Oscar provides bespoke and simple plans for individuals and their families that include unlimited e-visits with doctors, rewards for step tracking and access to a range of top-tiered hospitals and health clinics.
Insurance coverage via the Oscar app has already been extended to more than 230,000 users and will be available in nine US states from 2019.
Founded in Shanghai in 2014, Carevoice is a cost and quality transparency tool for health insurance customers. Carevoice’s flagship product is an artificial intelligence nursing system capable of triaging user symptoms before they go to see a doctor – and subsequently give the user a detailed breakdown of clinical options, including differences in both the cost and quality of various care options.
Launched in a time when private healthcare and private health insurance were both relatively young markets in China, Carevoice has enjoyed a meteoric rise on the mainland, with sales of $1.6m last year, over 350,000 users and more than 100 registered health partners and insurer clients.
In November 2018, Carevoice announced its intention to extend coverage to users in Hong Kong – and in the second half of 2019, the insurtech company intends to roll out its AI-powered app across Malaysia, Thailand and Indonesia.
Based in San Francisco, Trov is a radically unique, on-demand insurance solution that enables users to protect their personal property.
Trov’s modular mobile app allows customers to start, pause and stop coverage for any given item whenever they want with the swipe of a finger. Meanwhile, claims can be processed and disputes can be managed via the app within just a few minutes using its real-time messenger service.
Trov is designed primarily to cover smaller items of property like photography equipment, laptops, TVs or gaming equipment – but the start-up is in the process of extending coverage to sports equipment, appliances, musical instruments and more. Trov has also set its sights on a pay-per-mile automotive insurance product similar to Metromile, and with more than $90m worth of funding, there’s little reason to believe Trov won’t make good on those ambitions.
In July 2018, Trov launched in the USA, and is also available in the UK and Australia. It is underwritten by AXA Insurance.
Bandboo is another millennial-inspired insurtech start-up specialising in peer-to-peer (P2P) coverage. Unlike traditional insurance products, the platform of Singapore-based Bandboo enables users to pay into an insurance community on a daily basis – and then if something bad happens to a member of that community, it pays out.
Bandboo has also generated a buzz of excitement amongst its userbase through a few key features, including a commitment to cover all insurance excesses of up to S$4,000 and offering community members a 100% unconditional rebate if claim amounts are less than the amount they’ve paid into their accounts throughout the term of their membership.
New York start-up Lemonade is the ultimate millennial insurance provider. Lemonade’s slick mobile app is backed by investment from Allianz and AXA, and it offers one of the market’s most unique pricing models. Lemonade takes a fixed fee out of each customers’ monthly payments, pays reinsurance and then uses the rest to pay out claims.
At the end of every year, Lemonade then donates all unclaimed remainders from each user’s account to a registered charity as part of its annual ‘Giveback’. The programme works by allowing policyholders to join virtual peer groups based upon the types of good causes they’re passionate about, enabling those peer groups to effectively pick and choose the types of causes they’d like their unused premiums to help fund.
Because Lemonade is a Public Benefit Corporation and certified B-Corp, that also means they’ve got a reputation for processing claims quickly and without much fuss, because the start-up isn’t profit-driven.
Lemonade is currently available in 19 US states – and in November 2018, announced its intention to expand into mainland Europe.
Founded in 2017, CyStellar is a UK-based big data start-up focused on agriculture that offers cloud-based analytics designed to assist insurers and their clients avoid damaging natural events. Using its bespoke satellite imagery services and drone-based surveillance system, CyStellar’s AI-based platform integrates a variety of geo-referenced information to provide actionable intelligence to agricultural companies and farmers.
Meanwhile, CyStellar’s new flagship product for insurers, CyStellar TerraRisk RE, delivers geospatial insights in real-time and assists providers across the risk selection and underwriting, reserving and ratemaking and portfolio optimisation processes. CyStellar’s cloud-based system is designed to seamlessly integrate with reinsurers workflows and speed up weather-based claims through its before-and-after event analysis, automated post-event loss assessments and claim adjustment system.
CyStellar also has offices in Sweden and the USA.
Ins For Renascence
Founded in 2017, Ins For Renascence (IFR) is based out of Shanghai and has enjoyed phenomenal growth in 2018. IFR specialises in offering pre-insurance risk control and unique product customisation for personal insurance lines – and it relies on machine learning and big data to compile multi-dimensional data streams about consumer behaviours that enable insurance providers to make better-informed decisions.
IFR’s intuitive credit scoring system has already tallied up 890 million users and 670 million mobile customer profiles using its unique tagging system. That rampant success is one reason the California-based venture capital firm Matrix Partners led IFR’s most recent $14.5 million funding round in August 2018, which should help IFR to expand its customisable products and improve upon its platform.