Insurtech enablers transform the insurance value chain
In the past, financial services were always provided by what we usually think of as financial institutions – banks and businesses that issue credit cards and insurance coverage.
However, it is becoming more and more common for non-financial companies to distribute financial services, thanks to integrated finance. We have explained the concept of financial enablers in more detail in a series of articles, starting with our first entry.
In this article, we will focus on how insurance products are increasingly integrated with other services.
The history of on-board insurance
Similar to what we discussed in our card as a service article, the idea of insurers selling insurance products through partners such as airlines has been around for some time.
Innovative insurance companies like Guidewire and Duck Creek appeared two decades ago, along with the emergence of the Internet and the popularization of personal computers. Recently, insurtech startups such as Tractable, Concirrus, and Shift Technology have also started to apply AI and big data to the insurance industry.
Since COVID-19, we have seen a massive increase in the number of early stage insurtech enablers and the amount of funds invested in them. Some B2C insurance companies have also turned their proprietary technology into end-to-end SaaS solutions for other companies to provide their own insurance. One example is London-based car insurance provider ByMiles and its spin-off By Bits, a customizable, usage-based insurance platform for auto insurers.
Types of insurance facilitators
Providing insurance products involves many layers of work. Below are some verticals chosen by insurance players:
- Digitization and automation: Efficiency tools focused on improving front office processes, managing policies or plans, and managing complaints.
- Data and technology: Data analysis services that use AI or blockchain technologies to capture or analyze data for specific use cases.
- A whole package: Startups offering a complete digital insurance infrastructure to launch insurance products. They are B2B2C or B2B2B oriented and generally have their own license to underwrite and distribute insurance.
Among all the insurance tools available, here are a few exceptional:
- Wefox: Founded in 2015, Wefox has raised more than $ 900 million in funding from investors such as SBI, Target Global, Horizons Ventures and Salesforce Ventures. As a full-stack insurance company licensed in Lichtenstein, Wefox can transfer its license to other European countries. It does not sell insurance products itself, but sells them through 700 local agents and 5,000 associate brokers.
- Element: Incubated in 2017 by Finleap, which also incubated a bank-as-a-service company called Solarisbank, Element has raised over $ 75 million in venture capital funding. Element is a full-service insurance provider, but it sticks strictly to a B2B2x model. For example, it has enabled real estate companies to offer their own home and liability insurance. It has also powered Volkswagen’s auto insurance products and other white label insurance policies, such as travel and cybersecurity coverage.
- Finatext: Founded in 2014, Finatext is one of the few insurance-as-a-service companies in Japan. Among other integrated financial services, Finatext provides “Inspire”, a unified SaaS system that connects traditional insurers with other businesses, enabling them to distribute insurance products. It provides a user-friendly user interface for customers to apply for insurance coverage, manage their contracts, and request payments. It also provides insurance companies and agencies with a system console to manage accounts receivable, contracts and claims.
- Akur8: The company is developing an AI-powered insurance pricing platform designed to provide AI-based pricing automation and optimization to insurance companies. The company’s platform integrates with cutting-edge insurance pricing algorithms that can detect anomalies and uncover new patterns. The business enables insurance companies to improve profits and gain market share with pricing models created and updated in hours instead of months.
- DynaRisk: The company combines personal risk factors with external data and algorithms to determine an individual’s level of risk online. Insurers can use DynaRisk’s platform to drive sales, while policyholders can use it for risk management.
- Unqork: A code-free enterprise applications platform that helps businesses build, deploy, and manage complex applications, including insurance applications.
- Instanda: A SaaS insurance software platform that allows insurance companies to create, configure and launch products online.
- Cytora: A service that transforms underwriting for commercial insurance. The company’s Cytora risk engine uses artificial intelligence to learn risk patterns over time, enabling insurers to underwrite more efficiently and price customers more fairly.
This article was written by Jonathan M. Hayashi, Senior Partner at Headline Asia. It is republished here with permission from Headline Asia.