Beyond the Hype: What's Next for Insurtech.

This SøNws comes from the birthplace of Walter Elias Disney.
It’s also the home of the world’s first skyscraper.
And the only city where the river was designed to run backwards.

That’s right – Chicago. Or Chigagou (meaning onion field 🤷🏼) as it was originally known.

It’s good to be back.
It’s the city I lived in when I was 20-21.
The same city I got married in, a few years back.

This time round however, it was for the Future of Insurance 2024. It was my first Reuters event and I was thoroughly impressed. Well done Alex and team.

My key takeaways:

• The focus is firmly set on Horizon 1 over Horizons 2/3
• Insurtechs are no longer insurtechs. They’re tech vendors
• Incumbents continue to embrace open innovation – the need and opportunity of working with external innovators. And the need is big. Yet, speaking with a number of founders, they’re finding it super tough – enterprise sales are slow, and convoluted, and prices are getting (re)negotiated at every turn. The golden days of insurtech are well and truly a distant past

Now excuse the short write-up this week but it’s late on Thursday night here and I could do with some sleep. I’ve a busy Friday of meetings and I’m also heading to Wrigley Field for some important hot dog eating.

—

Read this. From Cover to Qover.

What’s that? The golden days of insurtech are truly a distant past? Well… that might not be the case for Cover Genius who has just closed an $80m Series E. Ooosh. That’s a big old number.

Founded in 2014, Cover Genius has reimagined distribution through its XCover platform – leveraging AI and data-driven insights to empower partners with a range of insurance and protection solutions.

Keeping with embedded and Qover has partnered with bunq, the second largest neobank in Europe.

The partnership is to offer travel insurance across seven markets and interestingly (well, to me at least!), it took just 6-weeks to launch.

And last of all, Spain’s Insurama – an insurtech MGA specialising in the coverage of consumer electronic devices, has brought in an $8m Series A. The company manages 210,000 policies, supported by insurers such as Helvetia and AXA Partners in Europe, and GNP in Latin America.

Stand aside LLMs. It’s SLM time.

It’s far too rare a pleasure to write about Scottish startups.

Edinburgh-headquartered Malted AI has successfully secured a €6.9m funding round to tackle the error rates and computing costs associated with LLMs.

It takes the output of large models and distils them into smaller models. Their take is existing LLMs are overly general and by applying small language models (SLMs) they can solve domain-specific problems with 10-100x cost savings.

I like it and certainly one to keep an eye on.

Another funding round, albeit this one lacking any detail other than a ‘significant’ amount, comes in for Simplifai.

These guys provide AI automation solutions for both banking and insurance, and the funding comes off the back of their recent InsuranceGPT launch.

SwissDrones, a leading aerial intelligence company, has closed its Series B. These guys are one of those sci-fi-today-type companies.

They build long-range unmanned helicopter systems designed for safe and cost-effective aerial intelligence gathering. Super cool. I’m not sure they are being used by insurers as yet but watch this space if not.

Floods, Seas and Storms

Neptune Flood, the largest private flood insurance company in the US, has acquired Charles River Data. The plan is to offer faster and more accurate flood risk assessments to customers.

From floods to seas and early-stage maritime startup Vanguard has closed its $1m Seed round. For them, it’s about advancing its automated insurance underwriting platform for maritime operations.

And finally, Arbol, the somewhat later stage parametric underwriting and brokerage firm, has announced a $60m Series B.

Their focus is on hard-to-place named storm and weather risks and uses global datasets for objective loss triggers – pivotal in the delivery of parametric insurance.

These data-driven triggers, like rainfall amounts or temperature thresholds, replace the subjective and often time-consuming manual damage assessments traditionally carried out by claims adjusters. Nice.

In part the funding will fuel its global expansion efforts, particularly in P&C both within the US and internationally.

Cyber and reputational risk

Round-the-clock support, crisis management, preventive advice, and platform monitoring to mitigate the impact of online threats on their reputations.

Sounds good, right?

That’s the new offer from a partnership between Aviva and RiskEye – a digital risk management specialist. The partnership aims to address the growing need for online risk and reputation support in the face of cyberattacks and malicious online content. I like it.

Also cyber but this time a fundraise. And it’s a monster.

Wiz, used by many insurance companies around the world, has cemented its position as a major player in the cyber space, raising a whopping $1bn at a $12bn valuation. Gulp. And I thought Sønr was going well.

Driving ethics across global supply chains

A couple of interesting announcements on supply chains.

PAXAFE, a company delivering AI-powered decision support for cold chain logistics, has landed a $9m Series A.

I like these guys. Global cold chain is one of the fastest growing sectors in the supply chain sector, valued at over $281bn in 2022 and expected to reach $327bn by 2029.

As you can imagine there’s a very real need for constant refrigeration from source to destination, and within that, there’s a whole pile of cost and time-related challenges. PAXAFE’s focus is on workflow automation and the management of temperature-sensitive products in transit and storage across industries such as pharmaceuticals and produce.

The other announcement was Tokio Marine Kiln (TMK) and Rezylient Insurance Agency have launched a new trade disruption product – Rezylient.

The product provides financial protection against disruptions to supply chains, alongside a suite of risk management tools to scrutinise and enhance ethical practices throughout sourcing processes.

Rob Jarvis, Head of Innovation at Tokio Marine Kiln, said:
“Rezylient Trade Disruption Insurance is a game changer for importers and a testament to Tokio Marine Kiln’s commitment to driving positive change and ethical business practices.

Businesses relying on global supply chains have a responsibility to ensure that their goods are responsibly sourced, but a patchwork of regulations and reporting standards around the world can make this difficult to verify. Rezylient Trade Disruption Insurance helps importers make the necessary background checks, provides cover should their goods be delayed for inspection as well as the evidence to showcase that all required standards have been met.”

Nice work TMK.

US property insurtechs attracting funding

Digital insurance company Honeycomb has announced a $36m Series B raise.

Honeycomb started selling real estate insurance in the US in 2021 and now operates across 16 states. It has issued policies insuring real estate worth $21bn and expects to triple that over the next 12 months. It also issues landlord insurance in a US market worth an estimated $34bn annually.

A slightly earlier stage US business is CoverTree which specialises in manufactured home insurance solutions. Last week they successfully completed a $13m Series A.

Their objective is to provide affordable insurance solutions to the growing manufactured housing economy.

Life and health – problem-based solutions

Eleos was set up in 2022 with the intention to address two shortcomings in the insurance industry: its inability to communicate the importance of financial protect

In the UK, the penetration of life insurance is ~35% and for income protection just 6%. Adoption has been notoriously slow but is on the rise and the belief is it can be accelerated with better access and awareness.

On the health side, Sift Healthcare, a leading innovator in AI-powered healthcare payment solutions, closed a $20m Series B.

Their pitch is to provide AI solutions and advanced analytics that enable healthcare providers to leverage their payments data to reduce write-offs, accelerate insurance reimbursement, improve patient payment strategies and optimise revenue cycle efficiency.

Sounds eminently sensible.

Funtimes have left the building

I’m not too sure what to think of this one.

Swiss Re has announced plans to withdraw from its digital B2B2C insurance business, iptiQ.

The iptiQ business lost $250m in 2023 and, whilst the projected loss for 2024 was less, it’s still a chunk to be carrying when they have so much core business to focus on sorting.

According to John Dacey, Swiss Re’s Chief Financial Officer, he suggested the options for iptiQ could include “potential sales, managing the business tighter for those activities that are very close to breakeven, and putting into runoff those entities that are very far from breakeven”. 

And keeping with similar numbers – from a $200m valuation to insolvency: it looks like Sproutt is heading for bankruptcy

The Israeli startup raised $38m since its founding in October 2017 but has struggled to generate income and turned to the court due to its inability to pay its debts. Ouch.

They owe Bank Leumi $2.2m, $740k to a bunch of suppliers, and still haven’t paid their staff. It’s gotta hurt for all those involved, including investors of course.

–

Right, it is time to call it a day.

As always, do get in touch if you’d like to know more about Sønr and how we can help you better understand the market trends, what your competitors are up to, and which tech vendors can best drive your business forward.

I’m back in the UK for a week before heading to Connecticut and NYC. Do shout me if you’ll be around to meet up.

Have a good w/e.

Matt

Sønr is the world-leading market intelligence platform created specifically for the insurance sector. It provides you with the knowledge and tools to stay relevant, compete and plan for the future.

Try out a trial of Sønr to access intelligence on market trends, competitor playbooks and disruptive tech companies globally. Plus collaboration tools to help you track and manage innovation activity across your organisation.

If you enjoyed this email, please forward to a friend and suggest they subscribe. If you didn’t, feel free to unsubscribe from this list or let me know what you’d rather read about.