What is InsurTech Anyway? Check Out These Disruptors

Insurtech is a blanket term that refers to certain technological advances within the insurance industry, and the startup companies that are creating them. The goal is to create efficiencies that will disrupt the insurance industry in some way. Here are some examples.

InsurTech that focuses on the distribution channel. These companies are all about making it easier for consumers to access the insurance they need by removing as many obstacles as possible to the purchasing process, using technology and algorithms. Some may ask only one or two questions prior to offering a quote, while others are hoping to provide a customer with multiple quotes to choose from.

MetroMile: Offers pay-per-mile insurance as an affordable car insurance option for low mileage drivers. Their rationale is that if you don’t drive much, you shouldn’t pay much for car insurance. Market: B2C, Property & Casualty Insurance

Lemonade: Offers renters and home insurance policies for homes, apartments, co-ops and condos. Powered by tech and driven by social good, the company’s business model entails taking a flat fee, paying claims superfast, and giving back what’s left to causes you care about. Oh, and they promise zero paperwork. Market: B2C, Property & Casualty Insurance

Policygenius: Online insurance marketplace to shop for life, long-term disability, health, renters, pet and auto insurance. Uses “highly accurate” quoting engines that offer side-by-side comparisons of tailored policies. Founded in 2014 by two former McKinsey consultants who saw an opportunity to shift the industry online and into the hands of the consumer, their raison d’etre is to make it easy and painless to get insurance, saving you time and money, and cutting out the insurance agent. Market: B2C, Health & Life and Property & Casualty Insurance

Wrisk: A smartphone app that is marketed as a simple way for people to buy insurance for everything from headphones to cars to homes. Market: B2C, Property & Casualty Insurance

Ethos: Aims to make life insurance more affordable and accessible to individuals. Currently licensed in 49 states, Ethos claims that users can sign up in 10 minutes without a doctor’s test and have claims paid out within two weeks. To get a quote, new users answer a series of four questions about their gender, if they use nicotine products, how they would describe their health and their date of birth. Market: B2C, Life Insurance

At-Bay: Offers tailored-to-your-business cyber insurance policies that cover data breaches, cyber-attacks, extortion, business interruptions, financial fraud and media liabilities. Part of the service they offer includes risk assessment and management, and incident management to minimize loss as a result of a cyber attack. Market: B2B, Business Insurance

Technological change sneaks up on those who think it’s just a fad that will pass. After a little while, those voices quiet down as the fad turns out to be a trend, and that trend becomes the norm.

InsurTech that makes risk selection and rating a simpler and shorter process for insurers.

Guidewire: A software company that provides policy administration for insurance companies. They help more than 300 P&C insurers reduce their administrative burden by auto-underwriting certain risks that meet the criteria set in their software. The company’s ticker symbol is GWRE. Market: B2B Property & Casualty

InsurTech that helps claims professionals accomplish their work faster and more efficiently.

Snapsheet: Utilizes proprietary technology to make virtual claims processing faster. They have several applications that allow insurance customers to take pictures of their damaged property and upload them directly to their insurance company. This allows for faster claims adjusting, which means that the insured gets paid quicker. Market: B2B Property & Casualty

These are just a few examples on how tech companies are disrupting the insurance space. Disruptive innovation appears when industry outsiders create new tools and processes (many of which the industry insiders refuse to believe will work) that eventually require the attention and implementation of an industry. This causes a shift where the disruptor strips market share from older players and then ultimately becomes the establishment. Unless of course that disruptor is absorbed into a traditional insurance company via acquisition.  Insurance Journal

The above sector map organizes the Insurance Technology sector into 14 categories and shows a sampling of companies in each category.

Auto Insurance: Companies that offer insurance for automobiles and motorcycles, as well as those that facilitate the process of auto insurance. Examples include car telematics products which detect your mileage and driving behavior to customize your insurance plan.

Consumer Insurance Management Platforms: Companies that enable consumers to manage their insurance and claims, usually through a mobile application. Examples include mobile apps that allow consumers to file claims right at the spot of the car accident, and to buy travel insurance on the go.

Employee Benefits Platforms: Companies that help enterprises build or utilize platforms that deliver healthcare and other insurance products to their employees. Examples include web portals through which enterprises can sign in and give their employees the option of buying several healthcare packages.

Enterprise/Commercial Insurance: Companies that offer insurance plans for large/medium/small-sized businesses and enterprises. Examples include insurance plans for startup founders and freelancers, insurance for large enterprises such as liability insurance, and workers compensation insurance.

Health/Travel Insurance: Companies that offer health and/or travel insurance, either for individuals or for businesses. Examples include health insurance plans that are customizable to your exact needs, and travel insurance that can be adjusted based on where you are.

Insurance Comparison/Marketplace: Companies that serve as a marketplace for consumers to buy insurance of any kind (car to home to health), or compare different insurance quotes. Examples include 3rd party companies that don’t offer insurance plans themselves, but act as a brokerage agent between insurance providers and consumers.

Insurance Data/Intelligence: Companies that collect, process, and analyze data analytics and business intelligence for the insurance industry. Examples include background checks on an individual’s history to determine insurance eligibility, or inspections on a real estate property for potential risks.

Insurance Education/Resources: Companies that offer educational material and resources that give information about how insurance works. Examples include news outlets focused on the insurance industry, and community forums that exchange knowledge of insurance between individuals.

Insurance Infrastructure/Backend: Companies that either underwrite insurance policies or help insurance companies with their day-to-day operations. Examples include insurance underwriters, CRM for agents and lawyers, communication tools, and claim filing tools.

Insurance User Acquisition: Companies that help insurance companies acquire and manage new leads and clients. Examples include platforms that are specifically designed for marketing insurance policies to potential customers, and those that record and manage insurance companies’ customers.

Life, Home, Property & Casualty Insurance: Companies that offer life, home, and property & casualty insurance, as well as other kinds of insurance such as renters, disability, and marriage insurance. Examples include websites that offer life, home, and P&C insurance in packages.

P2P Insurance: Companies that offer peer-to-peer insurance, in which a group of policyholders jointly pay for the insurance of an item that they mutually own, share, or rent (such as a car, house, or media equipment). Examples include P2P insurance platforms in which a group of bicyclists jointly buy insurance for all of their bikes.

Product Insurance: Companies that offer insurance and warranties for products that consumers purchase, from tech gadgets to diamonds. Examples include insurance plans for your smartphone in case it is stolen or is broken.

Reinsurance: Companies that provide insurance for other insurance companies. Examples include companies that offer insurers coverage to mitigate and manage their risks.

Venture Scanner has tracked about 1,000 Insurance Technology companies in 14 categories across 53 countries, with a total of $16.6 Billion in funding. Click here to learn more about the full Insurance Technology landscape report and database.

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