2016 has been the year of insurtech, and there’s no reason to think 2017 won’t be any different
This year has been a wild one for policy: the British are (planning on) leaving the European Union, Donald Trump was elected President of the United States, and the Chicago Cubs won the World Series (it probably affects policy . . . just go with it).
But insurance policies have also seen a revolution this year, as a new breed of fintech companies that offer better insurance services have broken out. Several companies have announced investments of more than $10 million, some more than once.
In the developing insurtech industry, five countries are making an immediate impact: the United States, Canada, Israel, the UK, and Germany. The following are just 10 of the companies you need to keep your eyes on in an industry that is only seeing the beginning of major, successive financing rounds.
Headquarters (and other locations): New York, New York; Tel Aviv, Israel
Amount raised (latest round): $60 million ($34 million Series B)
Investors: XL Innovate, Aleph, Sequoia Capital, GV, General Catalyst
Founders: Daniel Schreiber, Shai Wininger
Employees: 20 (CNBC)
Lemonade Co-founder and President Shai Wininger recognizes the difficulty and high costs of breaking into the insurance industry, telling panelists at Geektime’s annual conference two weeks ago that, “If you ask the entrepreneurs what they want to do next, it’s usually not ‘I want to do insurance. I want to deal with regulation and raise a shitload of money.’”
“For a startup to come in, you have to start everything from the beginning,” he continued. “I think that’s why it was so hard to break in because you had so many people in the business already.”
2. Next Insurance
Headquarters: Tel Aviv, Israel
Amount raised (latest round): $13 million (seed) — yeah, you read that right
Investors: TLV Partners, Ribbit Capital, Zeev Ventures (Oren Zeev)
Founders: CEO Guy Goldstein, Nissim Tapiro, and Alon Huri
The issue Next Insurance wants to tackle is small business insurance, which they argue is too arduous. According to their research, they say that there are 28 million small businesses in the US, with another half million opening every year, making for an ample target market.
“We are changing the market with a solution that makes it simple, fast, and transparent for small businesses to find and obtain insurance online vs. having to physically visit agents each time they need to make a change,” Co-Founder and CEO Guy Goldstein told us in March.
Headquarters: Chicago, Illinois
Amount raised (latest round): $31 million
Investors: Accretive LLC (Edgar Bronfman, David Whelan), Oak HC/FT (Patricia Kemp)
Founder: Jim Cochran
Insureon focuses on insurance for small businesses, claiming 175,000 SME clients since launching as a digital service in 2011.
“We already do about 400,000 unique visitors a month — that’s up from 20,000 when I started four years ago,” CEO Ted Devine told the Chicago Tribune in 2015. “Our goal a year from now is to get that to a million unique visitors a month. We’re going to do that by continuing to invest heavily” in SEO.
Headquarters: Toronto, Ontario
Amount raised (latest round): $25 million
Investors: Omers Ventures, Royal Bank of Canada, Manulife Financial Corp
Founders: Michael Serbinis, Dan Liebu, Todd Humphrey, and Dan Galperin
LEAGUE suggests insurance plans for things like dental coverage and chiropractors, but it doesn’t offer its own plans. They currently target employers and small businesses, many of whom haven’t provided health insurance in the past.
CEO and Co-founder Michael Serbinis, who has amassed a small fortune after selling startups Kobo and DocSpace for $315 million and $350 million respectively, recently told Reuters, “Insurance is just another commodity waiting to be Uber’d.”
Headquarters (and other locations): Berlin, Germany; Zurich, Switzerland
Amount raised (latest round): $33.5 million, ($28 million Series A)
Investors: AngelList, Horizons Ventures, Idinvest Partners, Salesforce Ventures, Samuel Skoblo, Seedcamp, Speedinvest, Target Global, Victory Park Capital
Founders: CEO Julian Teicke, CFO Fabian Wesemann, COO Jonathan Seoane, Teodoro Martino, Florian Eismann
The company’s app allows users to consolidate insurance plans and manage all claims in one place. It also gives them the opportunity to see new all-encompassing plans that will consolidate all their coverage into a single plan.
With 65,000 customers already, they are bullish about their prospects. They pitch themselves as “the point of contact,” cutting down on the administrative costs that can weigh down on competitors behind the digital times. The company has built their business model on receiving reimbursements from insurance companies’ for their Q&A service.
FinanceFox CEO Julian Teicke told Geektime that, “We are the point of contact if he has a claim, if he has a question, if he needs something insurance related. This reduces the administrative costs for the insurance companies and they reimburse us for this service we deliver to their customers.”
Headquarters: New York, New York
Amount raised (latest round): $26.6 million ($14.1 million Series B)
Investors: Kleiner Perkins Caufield & Byers, Propel Ventures
Leadership: CEO Denny Weinberg, VP Product Karen Albanese, VP Finance Erik Wissig, VP Engineering Amir Pirnia
Hixme offers employers a way to manage employees’ healthcare under the Affordable Care Act (ACA) in which an “employer pays for the plans, but employees have freedom of choice and the plans are portable.” The company’s cloud platform takes in medical and financial data from employees and their dependents in order to customize benefit packages for each employee.
“Technology continues to revolutionize traditional industries from banking to transportation, yet employee healthcare coverage has been frozen in time by the archaic rules of the group insurance model,” said HixMe CEO Denny Weinberg in February. “With our platform, we’ve been able to replace the 70-year-old traditional model with a benefit model where each employee can design and then own their own benefit package.”
Headquarters: San Francisco, California
Amount raised (latest round): $14.4 million
Investors: Nyca Partners, Canaan Partners (Brendan Dickinson), XL Innovate, Bee Partners, FinTech Collective, Vertical Venture Partners, 500 Startups
Founders: George Djordje Vranjesevic, Yotam Shacham, Matt Miller
Also focused on SMEs, Embroker streamlines managing policies, tracing claims and even analyzes coverage of business vendors. The company claims SMEs use between four and six insurance policies, making it a burden to keep up to date on terms and deciding if those policies are still relevant.
“This industry has needed more transparency since its inception — now it’s possible to use technology to achieve that end,” said Embroker CEO and Founder Matt Miller upon raising the company’s Series A. “By bringing clarity and simplicity to what’s traditionally been an opaque and painful process, we’re enabling business owners to embrace insurance and risk management as tools for growth rather than obstacles.”
Headquarters: San Francisco, California
Amount raised (latest round): $39.2 million ($25.5 million Series C in April 2016)
Investors: Oak HC/FT, Suncorp Group, Guidewire, Anthemis Group
Founders: Scott Walchek
Trov offers short-term insurance coverage with all services available via mobile. This includes the uploading of items to their cloud (which they call the Trov, get it?), receiving quotes for their policies, activating and deactivating coverage, and claims.
CEO Scott Walchek told Geektime that the short lifetime usability of certain products shouldn’t disqualify them from getting some sort of coverage. “In a world where I have complete control of entertainment, banking and other services, why can’t I just choose a few things that I care about and protect those for as long as I need to?”
Headquarters (and other locations): Berlin, Germany; Melbourne, Australia
Amount raised (latest round): $15.3 million (Series A)
Investors: Horizons Ventures, VantageFund, e.ventures, German Startups Group, European Regional Development Fund
Founders: Sebastian Herfurth, Janis Meyer-Plath, Burckhardt Bonello, Tim Kunde
Employees: 80 (Crowdfund Insider)
Based in Berlin, Friendsurance is working to reshape how customers interact with their insurance. The parent company Alecto GmbH, which operates the Friendsurance brand, was co-founded in 2010 by Managing Directors Dr. Sebastian Herfurth and Tim Kunde, along with Managing Director Janis Meyer-Plath, who serves as head of marketing and sales.
Friendsurance claims to have a customer base in the six digit range. Having started operations in 2011, they say that they succeeded in adding 75,000 new members over 2015.
“Companies like Spotify are so hyped, but the global music industry only makes $15 billion in annual revenues, excluding concerts. The German car insurance market alone gets €20 billion a year in premiums,” Friendsurance CEO Tim Kunde told the Financial Times earlier this year. “There is vast potential . . . for innovation and digitalization.”