The second cohort for StartupBootcamp (SBC) Instech London has now been running for a couple of weeks, slotting in amongst the crowd at the Rainmaking Loft, overlooking Tower Bridge.
Last Thursday was a chance for the SBC mentors to get to meet the 10 new companies in a mammoth four-hour speed dating session. I managed to see five and those I did meet were a good snapshot of how the global insurtech scene is shaping at the start of 2017.
First meeting was with TikkR, over from Sweden. Their aim is to provide “short-duration and on-demand insurance protection to insure specific moments, mainly targeting Millennials”. TikkR has approached SBC with an open mind, hoping to find people willing to buy on-demand insurance for when playing tennis, hiking or skiing. This millennial “protection gap” is one of the most popular areas for Insurtech disruptors, helped by Lemonade’s $60m funding last year. Many 20-30 year olds are in an insurance void, no longer covered by the family household insurance policy, but without enough assets to make insurance protection a priority. TikkR believe they will win in this increasingly crowded space because of their marketing expertise, not through any distinguishing technology. In competition with startups 1-2 years ahead of them they will need to work hard to find a particular niche or speciality. Sticking with the Swedish market for the foreseeable future gives them the possibility to stand out in a smaller market. TikkR can learn alot from its three months working in London’s global insurtech fishpool. Ideally they should partner with a large domestic insurer and a major retailer or leisure company as a distributor in their home market. And there is a lot to be learnt from the success of BoughtbyMany in this space. Now with over 250,000 members, this company redefined and then took ownership of a number of new niche markets in pet insurance and travel. The experienced management team has created a strong revenue generating business since launching in 2012 and has just raised £7.5m ($9m) of Series A funding.
Get me to the church on time
Next to our table was Alberto Mera, the new CEO of Sharenjoy in Spain. The company wants to break into the event cancellation insurance market, offering broader cover, with an easier claims experience than what is already available. Originally started by five highly enthusiastic founders, and with an existing relationship with Spanish bank Caixa, the company has already had a management pivot as the founders have stepped aside to let Alberto take over. Ticketmaster, in collaboration with Allianz, is the industry leader in selling event cancellation insurance. Sharenjoy believe over 10 million policies have been written on Ticketmaster at a few euros each. Traditionally, compensation has been limited to the face value of the ticket alone, payable if the buyer has been unable to get to the event. Sharenjoy sees a chance to extend this cover to compensate for the full extent of the loss (for example covering a personal accident claim). In addition, if something happens to disrupt the journey to the event, for example a bus breaking down, Sharenjoy will pay for alternative transport, such as a taxi. This is going to be a tough area to break into. Displacing an incumbent that owns one of the main existing distribution portals will be challenging . Offering greater cover which may well overlap with what people already have anyway could increase the cost of the simpler existing product and may not be valued by the buyer.
Claims frequency is very low in this space. Most people are able to re-sell their tickets if unable to get to an event. It’s possible that many of the people that buy cancellation cover don’t even realise they are signing up for it at the time of purchase. The relationship with Caser is encouraging though, and this looks like another business that can learn and sharpen its proposition whilst in London, then return to launch the business in Spain.
It's my life
PORT is the “information sharing app for people who are changing the world”. Founder and CEO Julian Saunders previously designed and built MoneySavingExpert’s very successful Cheap Energy Club which reached one million users. Prior to that, Julian had founded, run and sold three other companies. Julian and cofounder and CTO Dan Eltis, have recognised the major shift that is likely to happen in the next few years, as we begin to realise the true value of our personal data. Up until now we freely, albeit often reluctantly, provide details about our lives to insurers, retailers, banks etc. One of the frequently cited benefits of blockchain is the concept of only having to enter data once to create an immutable record, accessible to anyone with permission. PORT creates a container for our personal data but has the potential to be used without waiting for a blockchain infrastructure to be up and running.
Intuitively, many of us recognise that the data we are providing has value to others because it enables us to be profiled and targeted as consumers. We tend to accept, because we have no choice, that for the most part we get little or nothing in return for this data. This is going to change soon. As I explained recently, the forthcoming GDPR (General Data Protection Regulation) will radically enhance the rights of the individual with regard to how their personal data is stored and used. There will be significantly greater penalties for companies that abuse or are careless with personal data, including fines of up to 2% of revenue. PORT’s goal is to give us, as consumers, a means by which we can package up our personal data, then control and benefit from who uses it. Today, the residue of a lifetime of financial transactions creates an intimate map of our personal lives across time and space. In the future we will no longer leave a trail of digital footprints across hundreds of independent databases. Instead, our personal digital data will become more like our bank account. We’ll reveal what we need to, when we need to. Our personal data will, if we choose, be able to identify if we are good drivers, maintain our houses well, look after our health and generally minimise our own personal risk. The advantage for the insurer is the ability to access more comprehensive data, independently verified, and thus be able to select buyers that have a lower likelihood of making claims or committing fraud. This concept is not new. USAA Insurance Company has for many years benefited from lower than average claims by offering insurance to current and retired service personnel in the US.
Julian and his team don’t need SBC to build their solution. Two weeks in and they already have a demo-ready product, with a POC version coming soon. For them, SBC offers the chance to work directly with insurers to shape their product and quickly identify revenue generating opportunities. This is definitely a company to watch.
(Not) stuck in the middle with you
NuvaLaw, from South Africa, provides a platform for improving the settlement of claims, starting first with motor. Claims management is another very popular area for insurtechies and RegTech is hot. There are many opportunities to reduce costs. Claims settlement is currently unstructured, information often paper-based, contract terms opaque and settlement often drags on too long with emotion overriding rationale. The team have deep industry experience, Marius Conradie is formerly of Vodacom in South Africa and led the use of mobile phones for payments in health and agriculture. Willie Pienaar is a trained lawyer. There are other, competitive, legal claims management portals being developed, and this is another company where the best strategy is likely to be to strive for leadership in the home country. SBC offers Nuvalaw the chance to engage with potential partners and learn from others offering complementary products in adjacent markets.
I can tell by the way you walk...
Finally LifeSymb, another Swedish company. Ultimately they would like to help people self diagnose muscle or other movement related injuries. For now, the founders see an opportunity to help improve the efficiency of diagnosis of whiplash injuries to reduce the subjective judgements made by the medical profession. Managing the claims costs helps insurers identify whether a claim should be paid or rejected. LifeSymb is using Microsoft Kinnect and its SDK (Software Development Kit) to produce algorithms to measure joint deflection. It will take some time to train and validate the software. Ultimately, this application will need to be capable of operating with a mobile phone video rather than requiring Kinnect, to simplify deployment and adoption. The team are taking a thoughtful, measured approach to building their business and recognise the challenges ahead. I expect it will take a while for LifeSymb to land on their core proposition, and to achieve critical mass in their market, and it could be that insurance is not the right space for them. I would be surprised if they have investors lining up on demo day, but if they can hang in for the first twelve months I suspect this team could have a scalable offering beyond just their home market.
The first London based Insurtech StartupBootcamp generated a lot of exposure for the companies that participated and it has been fascinating to watch them evolve over the last twelve months. The countdown to demo day in April will be foremost in this year's cohort, with much going on in the next few months, building products and talking to potential clients. I'll be meeting with the other five companies at SBC over the next few weeks, as well as reporting back on other new entrants emerging onto the European scene in 2017.
This article was originally published on LinkedIn.