Insurtech Intro

Insurtech is used widely to describe both a trend in the insurance industry and technology companies operating in the insurance industry.  Despite some minor variations, definitions of Insurtech all describe the application of innovative technologies in the insurance business.  Some definitions might help:

  • Insurtech refers to the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model.  (See here.)
  • It’s the technology that lies behind the creation, distribution and administration of [the] insurance business.  (See here.)
  • Insurtech is a broad category of constantly changing technologies used in the insurance industry.  (See here.)
  • The broadest definition involves the use of technology innovations designed to create cost savings and efficiency.  (See here.)

For us:  Insurtech is the application of innovative technologies in the insurance business.

Technically, Insurtech has been around for many years.  But the massive change that technology has had on our society has caught up to insurance and technology is beginning to have a dramatic impact on insurance:

InsurTech innovation is occurring across the entire insurance value chain—from distribution and marketing, product design, underwriting, claims management and balance sheet management and across all lines of insurance—property and casualty, life and health.  (see here.)

Insurtech strategies can be divided into disrupting and enabling technologies.

Disruptive insurtech – insurtech companies that disrupt insurers e.g. digital brokers, MGAs, price comparison portals etc.
Enabling insurtech – tech companies who enable insurers to transform (e.g. IoT, security, software etc) by selling technology software to them.  (See here.)

While there was significant focus previously on disrupting technologies, many of the more recent investments have been focused on enabling technologies.

Within distribution, 75 percent of insurtechs focus on enabling distribution (See here.)

Insurtech examples include:

Coalition – Coalition offers cyber risk insurance and cyber security support to SMBs (small and medium-sized businesses).  The cyber security support is provided through a combination of technology enabled risk management tools and highly skilled IT security experts.  (See here & here.)

Zendrive – Zendrive tracks driving habits and helps users improve driving behavior through technology, leading to safer roads.  (See here & here.)

Hippo Insurance – Hippo sells tech-enabled homeowners insurance.  The company is based on combining technology and insurance in a way to reduce costs for home owners.  (See here & here.)

Shift – Shift provides technology solutions to detect and defeat fraudulent claims.  (See here & here.)

Next Insurance – Next sells a range of property & casualty insurance products to small businesses.  Next recently completed a Series C round from Munich Re.  (See here & here.)

Jones – provides liability insurance to independent construction contractors and those that hire them, including a pay-as-you-go option.  Because of specialization, the Jones offering helps contractors with compliance as well.  (See here & here.)

The insurance industry is beginning to change from technology innovation, and much more is to come.

Innovate Insurance – Innovation & Entrepreneurship in Insurance

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