We ventured out beyond the usual wood panelled halls and sterile hotel conference rooms that tend to characterise insurance conferences, to the exposed brick railway arches of the Steel Yard under Cannon Street station bringing a touch of Shoreditch grittiness to EC3.
With over 1,200 members in the Instech Meet up group and a track record of excellent meetings so far this year, it was no surprise that yet again a capacity crowd of over 200 people attended last Monday’s “Accelerator Showcase” for an evening of presentations and mingling over drinks (sponsored by Everis, publishers of the start up data directory, everisNEXT).
The previous week’s InsTech London session showcased eight growing data analytics companies. This week 10 accelerators and incubators were up on stage. This is a rapidly growing area in insurtech. Almost every one of the organisations presenting has launched their insurtech accelerator or incubator in the last 12 months.
The terms accelerator and incubator are somewhat loosely defined, but in essence accelerators tend to bring together people or early growth companies to create a viable product in a very short period of time and then pitch this to investors for further funding. Incubators often bring in more mature organisations with seed or Series A funding, and provide more focused support over longer time periods. Some take an equity stake, some do not.
Limiting speakers to only five minutes, and with no slides, the InsTech presentation format is proving how effective communication can be when there is a passion for the topic and a clear articulation of the purpose of the venture.
Munich Re reaching out around the world
Jennyfer Yeung-Williams from Munich Re kicked off the event this week. She gave a hint as to what the bright future of insurance could be by confessing to having dreamt of working in the insurance industry from a young age. Could working in insurance soon hold the same glamour for the post-millennials as investment banking did back in the eighties?
Munich Re, as we were to hear throughout the evening, is making a big commitment to insurtech. Jennyfer Yeung-Williams is one of 23 “Digital Partners” at Munich Re working to help get new companies launched. Munich Re has also announced some major investments in Slice (fractional driving) and Trov (insuring your stuff, one item at a time). The reinsurer is placing a number of bets and are ahead of Swiss Re in their funding so far this year.
There are three areas in particular where Munich Re believes it can help early stage companies. Firstly, it provides start-ups with access to the important and hard to get licence to write insurance business; secondly, it is connected to a wide VC network and finally, Munich Re is developing a platform to handle all the “boring bits” such as claims and policy administrations. Start-ups supported by Munich Re can plug directly into the platform and this, along with the licence and access to funds, enables new companies to fast track their offering into the real world. Munich Re is one of the corporate supporters, along with Sompo and USAA, of Plug and Play’s first insurance accelerator program for start ups that has just kicked off. Plug and Play, located in Silicon Valley, has accelerated over 2,000 start ups and raised $3.5bn since it’s inception. Richard Hartley, from Cytora is CEO of one the few companies (and the only one from the UK) selected for the current Plug & Play cohort from over 800 applicants. Richard flew back to London last week to present at the InsTech Speedtech session on data. (Cytora also happens to be one of the companies supported by Abernite).
Over 100 people at Aviva Digital Garage
One of the other biggest names in the London insurance start up world just now is Aviva’s Digital Garage. Paul Heybourne heads up the initiative which he describes as a microcosm of Aviva itself. Insurance companies wondering how, or more importantly who, should run their innovation initiatives may be interested to know that Paul was recruited from inside Aviva where he had been working for the last five years. There are over 100 people involved in the Digital Garage, ranging from website creators to data analysts to games developers. They support companies such as Cocoon, the home security start up competing in the same space as Nest to eavesdrop on the devices in your home. Cocoon has already raised $3m, proof that incubators are not just for early stage start-ups. Aviva is another supporter of Plug and Play and here in the UK is the main insurance corporate supporter of Founders Factory.
Planning to launch 200 companies in 5 years
Participating in an accelerator as a start-up can be exhausting. The frantic three month sprint from start to demo day, working jammed together in a noisy co-working space with only oversized bean bags to sit on, suits some but not others.
George Northcott, head of business development for Founders Factory explained their different approach; incubation rather than acceleration. Founders Factory has several corporate investors contributing multiple millions of pounds in funding to help companies start up. Insurance is only one of the sectors they are active in, others include; L’Oreal finance for health and wellness, Holtzbrinck Macmillan for education, and media funded by the Guardian Media Group. Co-founder Brent Hoberman has pledged to create 200 companies in five years or almost one company a week. This is double the over 100 companies that have been launched since 2011 by one of the most successful incubators in the UK, Matt Clifford and Alice Bentinck's Entrepreneur First. If the pace of company launches continues to accelerate in this way then we really will be seeing a fundamental shift in how established companies grow and evolve.
Founders Factory has two stages to growing its companies. The first phase is incubation where new ideas for solving real problems from the market are explored. Participants are then given six months to build a solution. Once a proof point has been reached, the team will be expanded or reconstituted and enter into an accelerator phase in order to launch the business. They have already hired 50 people and have 12 new business initiatives under way.
Marc Sabas, an advisor at Mundi Labs, was up next to explain how Mundi Labs supports the insurance needs of the Latin American, Spanish and Portuguese markets. This is another organisation powered by Munich Re. The Mundi Labs team scout across the world for candidates and Marc said they interview everyone that applies. Mundi Labs takes no funding and charges no fees to participants. The first phase is a five week programme in Madrid, designed to take 10 teams to the next level. The first group of companies in the programme have started and are now shaping up for stage two. There are a couple of pure insurance plays in the first cohort, with others focusing on technology platforms, agriculture and health. During the second stage Munich Re will choose the best performing companies that have the potential to disrupt the insurance industry, with a focus on closing a commercial deal. Applications close for the next round on 13 November.
An average of $5m raised per company
Tom Graham from Accenture talked about their Fintech Innovation Labs. It too has recently launched an insurance tech focussed programme as part of its accelerator this year. Since being launched five years ago in New York, Accenture has raised a total of $386m in funding for its participants, an average of $5m per company. Twenty companies are now being sought to participate in a three month accelerator in Canary Wharf (for those that prefer exposed steel to exposed brick in their co-working space). Like others, Accenture will help participants understand how insurance companies work and will introduce them to professionals such as partners from law firms and others that have already launched new businesses. There is no initial charge or investment but applications this year close on 9 October.
No insurance tech is complete these days without a presentation from StartupBootcamp. With Sabine VanderLinden on her global tour drumming up support for their next cohort (Vegas this week) Jens Hartwig, COO, was up on stage. Startupbootcamp (or SBC) was started in 2010 and has run 15 programmes and supported 300 companies. The first insurance cohort was launched in 2016 with 14 corporate partners and 150 individual mentors (you will be sure to recognise a few of them). SBC’s biggest funding success to date in insurance has been Buzzmove, which has now raised over $9m. Applications close for the next SBC insurance cohort on 17 October or mark your diary for demo day down at the St Katharine’s Dock Rainmaking Loft on 26 April 2017.
Not forgetting Swiss Re
Swiss Re may have been less visible in this space than Munich Re, but they support SBC and Werk 1 and have now launched their own incubator. Swiss Re has been a proponent of build vs buy for a number of years, successfully creating many of their own tools which underpin their underwriting and capital management. They are now the only reinsurance company that continues to rely primarily on in-house developed catastrophe models in preference to vendor models. Their virtual incubator programme is based in Bangalore. According to Ross Walker, senior manager of strategy, Swiss Re realised that they had only limited presence in supporting technology in Asia, hence the choice of location. They tend to choose companies that are more mature and need less support and look for ideas that solve real problems. Swiss Re selected six start ups for the programme which started in July this year. They cover a broad spectrum with three in life & health, an AI platform, a personal shopping assistant and a credit scoring application. Swiss Re don't take equity.
Anastasia Stoycheva introduced Werk 1, where she is business development director. Werk 1 is a fintech and insurtech community outside of Munich. Although well established in other fields, they started their first insurtech accelerator programme in July this year, with six companies being selected out of the 40 that applied. Most of this first cohort are providing back end systems, rather than the more common front end applications. Demo day is this coming week, on 11 October in Munich. Participation at Werk 1 is free and they require no equity.
Techfounders is another Munich based accelerator. They also require no fees, nor equity and offer an initial investment of 25,000 euros. Their seventeen startups support a range of industries, with a lighter focus on insurance specifically. This is another venture supported by Munich Re so I’d expect to see more insurtech businesses coming in soon. They are open for applications now.
Craig Polley from Lime Street Digital Partners sketched out an outline of RiskForge a new, well funded, innovation lab coming soon to the London market. It sounds very promising, but under wraps for now so look out for more information later this year.
Behind the scenes at InsTech London – and occasionally out on the stage – are the Marketminds team who, along with the founders Robin Merttens and Paolo Cuomo, organise the annual London Insurtech conference. Ferdinand Bennigsen of Marketminds was recently on the panel at the Insurance Technology Congress talking about the challenges of driving innovation in large corporations for people at the early stages in their careers.
Two notable absences were AXA and Allianz, not only two of the world’s largest insurance companies, but also amongst the most prolific in supporting start-ups. In addition to the VC arms (AXA Strategic Ventures and Allianz Ventures), look out for AXA Labs (detecting new trends in insurance), AXA Factory (accelerator) AXA Kamet (incubator) and Allianz X (accelerator). Next time perhaps?
I’d thoroughly recommend the InsTech events for anyone interested in what is happening across the insurance technology space, and to meet the people making it happen. Coming up next are Robotics (24 October) and Connected Devices in Insurance (29 November) both in the same venue.
This article was originally published in Linkedin.