Insurtech top 100: Quarter Two update

The Top 100 Insurtech firms 2018

  • In the last quarter, the top 25 insurtech start-ups have seen $57.3m of investment, six product launches and four partnerships
  • Start-ups partner with other start-ups to improve their propositions
  • Insurtech funding is densely clustered

Following on from the publication of the top 100 insurtech firms in April, Matt Connolly, CEO of Tällt Ventures, reflects on the recent developments affecting the 25 top ranked start-ups.

It’s a couple of months now since Tällt Ventures and Post came together to publish the Top 100 Insurtech firms ranking. An index that celebrates the insurtechs that are truly innovating, rethinking today’s products, services, technologies and business models, reshaping the world of insurance as we know it.

As you’d expect, there’s no shortage of activity from the ventures featured - from new investment rounds and corporate partnerships, to product launches and expansion into new markets.

Using Sønr, Tällt’s market scanning platform, we’ve summarised the notable updates in the last quarter across the top 25 and in doing so, identified a number of overarching current trends. With a total of $57.3m (£42.8m) of investment, six product launches and four partnerships, these leading new ventures are undoubtedly having a significant impact on the market.

Partnerships enabling product launches

Of the six product launches tracked, three were made possible through partnerships with other start-ups. Neos’ smart home insurance offering was bolstered by its partnership with leak detection software specialists Homeserve, while Acko’s partnership with Indian ride-hailing unicorn Ola provides a platform for the insurer to offer in-trip insurance cover to riders. Finally, Clover’s partnership with prescription technology venture Youscript has helped the company to roll out a unique medication management system for primary carers.

To continue delivering cutting-edge innovation, insurtech ventures are turning to their start-up peers to improve their propositions and expand their products and services with unique collaborations. It’s a model which corporate insurers are increasingly adopting, allowing them to gain invaluable access to the talent within the start-up ecosystem, while also accelerating time to market for new products and services. 

Frontrunners continue to receive backing

With a further $57.3m of investment into the top 25 since the index was published, investment doesn’t look to be slowing as insurtechs continue to raise money to scale and deliver on their ambitions.

That said, the funding was densely clustered, with this money split across only three ventures.

Both Alan, the digital health insurance platform, and Atidot, the predictive analytics tool for the life insurance industry, received Series A funding, both gaining further contributions from their seed investors. The investments bring the total number of ventures in the top quarter of the index with Series A funding or above to 23 out of 25, which highlights a certain maturity to the market but also plenty of growth still to come.

The third investment was into Simplesurance, the ‘plug & play’ e-commerce insurer, which raised a Series C to realise its expansion into new markets, with Japan the first in its crosshairs.

New entrants closing the gap on full-stack insurers

In May, Oscar Health, the New York-based full-stack health insurer, posted its first ever profits alongside the announcement of plans to expand to several more US states next year. It comes after disappointing previous financial results, with more than $200m in losses in 2016 alone. The start-up’s net profit of $7.4m in the first three months of 2018 points towards a positive momentum and evidence to suggest the unique business model is working.

In a similar vein, Oscar’s NY city neighbour Lemonade, the home insurer powered by artificial intelligence, appears to have stemmed the bleeding in Q1 this year after reporting an underwriting loss of $1.5m, a far cry from the $15.8m of underwriting losses recorded across 2017. As they say in the startup world, it’s no longer about making profit, sometimes not even revenues. Losing less than you did the year before is often seen as a step in the right direction in the eyes of forward-thinking investors.

Oscar Health, Lemonade and the likes of Clover and Metromile have all experienced similar difficulties and hurdles as new entrants into the full-stack insurer ecosystem, with the burden of state regulations, building a customer base from scratch, and investment into cutting-edge technology weighing heavy on investors' pockets.

However, as these start-ups pick up more customers, we’re seeing a stabilisation of losses and a shift towards profitable business as larger customer claims become embedded in a bigger pot.

Looking to the future

Overall, the continued growth across the index in terms of investment, profits, geographical expansion and customer numbers provides further promise for an insurtech industry which many wrote off as having hit its prime back in 2015.

With six new product launches from across the top 25 of the index alone, we look forward to reviewing the state of play at the next quarter.

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