China's investment into European Insurtech

Happy 2021. Let’s hope.

I promise not to dive into my 2021 insurtech predictions but two things I am obsessed with currently are:

1. BigTech’s move into insurance
2. How US and Chinese Insurtech will change the face of European innovation

Alright, three things:

3. The rise of India and LatAm as global Insurtech challengers

Will we see any of this in 2021?
The short answer is yes, we already are.

For those who are new to SøNws, a warm welcome.
For those who have been reading this for a while, roll up the sleeves. Here’s to another year tracking the rapidly changing face of European insurance innovation.

The Amazon Playbook – Health Insurance
Did anyone catch this last week – Haven (Amazon’s JV with Berkshire Hathaway and JP Morgan Chase) has shut shop?

Two schools of thought. The first is it didn’t work out. And there can be plenty of reasons for this, right?

Three big companies, all with different ambitions, cultures, ways of working etc. It’s always going to be a tough one.

When you dig into the weeds, hear from people working inside Haven, you get another perspective. The closing of Haven allows each of the founding companies to drive their own agendas and implement their own ideas.

The big question is does Amazon have the appetite for health insurance?

Insurtech IPOs. It’s all the Rage.
Off the back of another $140m raise in December, it looks like Oscar filed for IPO.

And why not? It definitely feels the season for it. Clover Health is now public and ended its first day of trading with a valuation of around $7bn. Not bad.

And if you haven’t checked in on Lemonade for a while their market cap is now just under a whopping $10bn. Wow. That’s even taking into consideration a 9% drop on Tuesday when they announced a secondary stock offering.

On Lemonade, I enjoyed a stat they were peddling just before New Year. They hit the 1 million customer mark. This was immediately aligned to the giants such as Allstate, Geico and USAA who took between 15-45 years to hit the same number. How about that?

Tencent’s European Investments
Let’s explore some of the money which continues to be poured into accelerating European insurance innovation.

This week Insurtech Clark, Germany’s digital insurance platform, has raised a €69m Series C.

Clark has 300k customers across Germany and Austria, and funds will be used to ‘grow the company through customer acquisition and product investments’.

But that’s not the interesting bit for me. The lead investor in the round was Tencent. That’s right, China’s Tencent.

I’ve banged on about this before, so apologies for the repeat (and thank goodness for new people reading SøNws!).

The size of investments in US and China consistently outweigh what we see in Europe.
If European startups can’t raise the same capital, they will get left behind.
If we’re not driving emergent European innovation it’ll ultimately have a negative impact on the growth, even the sustainability, of domestic insurers.

I get this isn’t something that’s going to hit us tomorrow but it will erode, and change the shape of the market over the next 5-10 years, and is something we need to be cognizant of. In fact it’s exactly these sorts of shifts that led me to develop Sønr in the first place. Equally, good on Clark being able to attract Tencent’s investment. More of this please.

If you’d like to see where else Tencent has put money, you can find it all here.

European Insurtech Innovation
Looking at where money is heading and who is partnering with whom is a great starter when determining potential trends in a market. Evermore interesting considering the crazy world we find ourselves in these days.

One that made me smile last was learning Koala, the Parisian travel insurtech has partnered with travel booking platform Ulysse for it to distribute Koala Flex. I read this minutes after I learnt that France was bringing forward its curfew by 2 hours to 6pm.

What did stand out in the latest update, is DriveCoach automatically records when the user begins to drive, and if the phone screen is touched whilst the vehicle is in motion, the score is immediately affected. This I like.

Insurtech Innovation Across the Americas
In the States the B-corp certified auto insurtech, Loop, just announced a $3.25 million raise. Their offering blends data and AI to assess individual risk with a particularly focus on members of vulnerable communities. It’ll be interesting to see how such a niche (and ethically-minded) proposition performs in a growing market. A very genuine good luck to them. And on a broader note, I reckon we’ll be seeing a lot more interest in propositions with an etherical slant, and not just from startups.

One of the commercial insurers – Groundspeed Analytics has raised an undisclosed Series C. These guys have developed an API to help transform content in customer documents into structured, enriched data. The automated extraction tool helps support digitisation efforts, offers deeper insights on consumers, and can help save on operational costs. All the good stuff – not least the ‘getting more value from what’s already there’ bit.

Insurance benefits and management platform Nayya closed an $11 million Series A. If you’re in the benefits space, it’s worth checking these guys out. They access over 3 billion consumer data points, have a network of medical carrier integrations, and make use of 120 million lines of claims data to identify the right benefits for employees. There’s a definite US bent to what they’re up to but a lot of will translate across borders.

Further north and Canada’s Apollo has raised a CAD$13.5 Series A, more than tripling its original target. The startup, which launched in 2019, offers a range of online insurance for individuals and small businesses, which it will expand with the new investment. The company reported that despite the global pandemic, it had seen ‘record growth’. I guess having started in 2019 any growth is record growth, right? That said, who cares. Good on them.

And down south, LatAm life insurtech Betterfly (formerly Burn to Give) has built on its 2020 $8.5m Series A, with a further $9m.

I can’t wait to see where they take the business and what other markets can learn from them.

Walmart’s Next Step Into Insurance?
I’m sure most of you will have caught this already. Yesterday American Family announced it is to acquire Bold Penguin.

If you’re not familiar with Bold Penguin their pitch is to simplify and speed up the process of obtaining small business insurance. Their digital exchange is used by insurance agents and brokers to match, quote and bind policies from a range of insurers.

Both parties agree that retaining Bold Penguin’s autonomy is key to continued European innovation and success all round. For what it’s worth, I agree with that too.

Another announcement I enjoyed earlier this week was Walmart is to launch a fintech startup with investment firm Ribbit Capital (Walmart will have majority ownership).

Details on services or brand name are not currently available; reports showed that it will develop financial products for both Walmart employees AND customers. It also said it’s open to acquire or partner with other fintechs.

A smart move, especially when you own such huge distribution.
Even more interesting to think what’s next.
And even more interesting when you listen to this: Amazon vs Walmart

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Right, that’s it from me. Wherever you are in the world I wish you a happy weekend. Keep safe and for those in some form of lockdown, and who have already completed Netflix, feel free to use your time wisely:

• Look super informed and connected by sending this SøNws to colleagues and friends around the world
• Get yourself signed up to SøNws and stay ahead of insurance innovation trends and activity
• Get a deeper immersion into what’s truly going on out there and the European innovation reshaping your particular area of focus

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 14-day 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 organization.

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