Fintech Insurtech

Insurance tech – what have we learned so far?

Rick Huckstep reviews the past few months of insurance tech. Image: Freepik
Written by Rick Huckstep

Rick Huckstep reviews the past few months of discovering and reviewing a generous host of insurance tech startups.

It was three months ago that Bernard Lunn introduced me to Daily Fintech. My goal was to find innovative and disruptive insurance tech startups within the world of fintech. I thought it timely to review what I’ve found so far and where we go from here.

So far, I’ve featured 14 insurance tech startups and have interviewed the CEO or founder of seven of them. The first startup I interviewed was RiskEraser, and with its charismatic CEO, Max Steinmetz. RiskEraser offers a mobile distribution platform for protection insurance to brokers. It also offers a sharing economy platform to provide short-term, simple and easy-to-buy protection insurance for a growing breed of sharing platforms.

A personal favorite of mine was RecordSure, not just because I’ve known CEO Joanne Smith for the best part of a decade, but because I feel the whole complaints and mis-selling culture has gotten out of hand. Some might see the £39bn of fines for the top five banks in the last few years as a convenient way to recycle money back into the global economy. Sure, these trusted institutions should pay the price for their failings, but I see an unhealthy culture of ambulance chasers and litigators cashing in on their mistakes and poor conduct. RecordSure is a fabulous solution that can prevent the errors of the past from being repeated in the future.

Based in Paris, Meteo Protect is an insurance and reinsurance broker that offers financial products to protect companies and institutions when weather conditions adversely impact their business, profits and costs. This company blew me away with the sheer scale of the volume of data it can handle. The ability to align seasonal variations in climate conditions to the P&L of a business and sales performance was mightily impressive.

The group shares the collective benefit of no claims as a discount against the following year’s premium.
For this blog, I explored the sharing economy and peer-to-peer insurance market. I covered three very different insurance startups, starting with Guevara – a car insurance startup that offers lower cost cover by grouping friends and family together. The group shares the collective benefit of no claims as a discount against the following year’s premium. The concept behind Guevara is particularly interesting with regard to the moral hazard, and it will be interesting to see if this group behavior will lead to lower claims costs over time.

Next came Bought by Many, an intermediary that provides insurance protection products on a bulk-purchasing model. Consumers with the specific requirements are grouped together to buy insurance in bulk from the carriers, and in so doing, share the discount or preferential terms of business between them that comes from their collective power.

Finally, I featured Germany-based Friendsurance and its peer-to-peer insurance model based on the concept that everyone in a social network shares a small cost of any claim. For example, I prang my car and the 12 people in my network all pay £50 towards my costs. The insurer then rewards the group because they have not had to pay out as much as they had provisioned against the policy.

Insurance tech for groups!

Abaris is a one-of-a-kind intermediary of retail income annuity products in the US. Its real-time integration with eight of the top 15 providers of annuity products allows Abaris to model an ‘apples for apples’ comparison for consumers. The platform normalizes the language and terminology that often confuses consumers. It also allows consumers the flexibility, in real-time, to adjust key variables such as retirement age and indexation, and models how this will impact their annuity income.

Insly is so easy, I created my own broker model on a free one month’s trial!
I met with Insly CEO and founder Risto Rossar at a coffee shop in the city to hear the story of how Insly grew out of a successful broker business in Estonia. This SaaS platform is a lower-cost alternative to the traditional approach of building and installing a software package. Insly’s subscription model is transparent and the platform is so easy that I created my own broker model on a free one month’s trial!

moneymeets does so much more than simple provide a cash-back insurance proposition. It’s is a one-stop shop, financial portal that provides retail consumers with a single view of their financial position. With money management being the trend across financial services, moneymeets is a first-to-market in Germany, providing a comprehensive and transparent offering in this space.

In the first of a two-part blog, I featured the highest valued insurance tech startups in the list of fintech unicorns – Zenefits. Zenefits has disrupted the US healthcare market in the way it have gone to market. It provides a free-to-use HR SaaS platform to SMEs, who use the platform to buy health insurance and other employee benefits.

The theme of the US healthcare market continued a week later when I looked at the impact of Obamacare and new health insurance player Oscar. Valued as the second-highest insurance tech in the unicorn list, Oscar distributes healthcare insurance through the Insurance Exchanges. Where it differs is that it does it through a digital customer experience, from providing access to online clinicians, to a Facebook-like interface, to offering a reward of a dollar a day for increasing the amount the consumer walks (per day).

Telematics ‘black box’

Telematics is on the cusp of being mainstream, and to illustrate the two different types of insurance product, I contrasted two of the pioneers in the UK and US markets. In the US, Metromile distributes a pay-per-mile auto insurance product. The driver literally just pays for the miles they actually drive. Plus, the app is integrated with Uber and can distinguish between an Uber mile and a Metromile mile. This is of real benefit for those urban drivers willing to car share using the Uber commercial (and insurance) agreement.

This is a different approach to Ingenie, a UK startup that shaped the market for 18-25-year-old drivers. Using a telematics ‘black box’, Ingenie can track driver behavior and match it to the conditions of the policy, which drives down the cost of insurance. This information is available to the driver, acting as their ‘co-pilot’, ultimately leading to safer drivers! (By the way, these highway newcomers are all too aware that Dad will know when they’re speeding!)

Finally (for now anyway), I Skyped with CEO and co-founder Adrian Rands of QuanTemplate. Adrian not only told me about the power of its data analysis and presentation platform, he showed it to me! Unlike anything else on the market, QuanTemplate is addressing the challenge in the reinsurance market for the rapid analysis of mass volumes of data from disparate sources. Handling 50 million rows of data in 900 milliseconds is, quite simply, awesome!

The journey continues

One area I have yet to cover is claims, and I’ll be turning my attention to this in the near future. I can already see the application of blockchain technology to ensure immutable records, removing reliance on ‘trust’, and the crowdsourcing of loss adjustors to reduce the cost of claims.

Geographically, I plan to look further afield, too. The journey so far has stretched from Estonia to the US, with stops in Germany, France and the UK en route, yet this western perspective only draws part of the picture.

Asia is an area of great interest, especially given the shift in insurance business to the east, as too is the developing world and areas such as micro insurance for the under-insured, financially disadvantaged (yet mobile-enabled) masses. Down under, Australia has been always ahead of the rest of the world when it comes to calling out the impending pension black hole, or reversing the payment flow from push to pull.

In the first three months, I’ve found more insurance tech than I knew was out there. I must continue the search. The journey goes on!

This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. You can read the original article here.

About the author

Rick Huckstep

Rick is a sales expert with a passion for working with tech startups, digital disruption and the consumerization of technology. He has a background of 35 years' corporate experience in sales, management and operations, and over a decade of experience selling technology solutions into the insurance and banking sectors in the UK, Europe, US and Asia.

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