Direct Line Group making it rain for Brolly

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insurtech investments

Tesla is ‘very close’ to a full self-driving vehicle.
WeWork is on track to have positive cash flow in 2021.
And one loss-making company (Uber) buys another loss-making company (Postmates) for $2.65bn.

What a world we live in.

Let’s get stuck into some market news.

M&A activity
I had mixed feelings hearing yesterday’s news that the UK’s Brolly had been bought by Direct Line Group. I’m pleased for Phoebe and team, as I am for the DLG guys, but I feel like Brolly never quite realised its potential.

From their early pitches it was a business that had so much potential and did so much for putting insurtech investments on the map in the UK. And whilst an exit to Direct Line Group will be a good outcome for both parties, I’d have loved to see more.

insurtech investments

There was an interesting article in Sifted yesterday which gave a little insight from one of Brolly’s early investors, including the fact Brolly had ‘struggled for some time’:

“[I] imagine they are looking for someone to buy their tech and employ what remains of the team. Will create an elegant exit for Phoebe if she wants to stay and keep it going in some capacity.”

Elegant exit or not, they’ve teamed up with a great company and I hope we see more from Phoebe in the future.

Another acquisition that caught my eye this week was India’s Raheja QBE, a provider of auto, commercial, health, and home insurance.

The interesting part is the acquirer is healthtech QorQl which, in turn, is owned by Paytm, the Indian e-commerce payment giant.

In an interview, Paytm’s CEO cited that the acquisition would accelerate their journey of taking insurance to the large population of India. They’re aiming to create a tech-driven, multi-channel general insurance company with innovative and affordable insurance products.

With Google committing $10 billion to accelerate digitization in India just this week, and Sequoia announcing two new funds worth $1.4bn for India and SE Asia, it might not be long before India becomes the new China.

Neatly tying both India and comparison businesses together: PolicyBazaar, the online marketplace for health, car, home, and travel policies, has raised a further $130m from SoftBank’s Vision Fund.

This is despite the insurance marketplace’s CEO saying that SoftBank’s previous pushes for the company to expand were a ‘mistake’ and led to losses. A bold statement and good to see; pressure to scale will of course come with the paycheque, but not every business, market, or founding team is ready.

Onto other insurtech investments activity, and it’s been busy in the US. To mix it up I’ve pulled out a couple of earlier stage insurtech investments – often a good way to see what innovation is coming down the road.

One I missed from the last SøNws was Layr, which raised a $5m Seed round led by our friends at Sandbox Industries.

insurtech investments

With the prediction that more than 60% of US-based businesses will be owned by Gen Xers and Millennials in the next year, Layr uses AI and ML to help small businesses customise commercial insurance bundles.

I think it’s a particularly interesting space right now; as with any high unemployment rates we’ll see an upswing of entrepreneurship, and in turn, a new wave of small business entering the market. One to keep an eye on for sure.

Another interesting business is Verikai, which leverages data and machine learning to change how insurers perceive risk. They’ve brought in a similarly sized $6m Series A.

Founded in 2018, they’ve built a database of over 4,000 behavioral attributes, 260 million people across the US, and modeled on over 25 million unique claimants. The insurtech investments will allow them to build out a marketplace infrastructure where risk and rate can be fundamentally aligned between distributors and carriers.

Cybersecurity prediction startup CYR3CON is yet another which has raised, this time $8m.

What caught my eye is that they’re looking to expand use cases beyond vulnerability management to include application security, security operations, support for enterprise cyber insurance underwriting, and risk management for private equity or venture funds.

And finally, AI-enabled texting platform Hi Marley has also raised $8m. Interestingly this was a Series A1 (an extension round), possibly suggesting their growth isn’t happening quite as fast as planned.

Hi Marley, which was launched in 2017, offers text-based messaging to help insurers and partners better connect with consumers. It’s a tool which enables companies to communicate with customers in their preferred method and simplify transactions across claims, service and underwriting.

Its technology supports real-time communication and automated translation into 25 languages.

insurtech investments

What I was impressed by is Hi Marley’s statement that its platform results in a 22% faster claim rate and around four fewer calls per claim for insurers.

Getting a little closer to home and French insurtech investments Koala has raised €1.6m. Koala is another reengineering of the antiquated claims process for flight disruption – providing travelers with real-time reports and on-the-spot compensation. Thank God.

And in the UK car subscription service Drover raised £20.5m. It plans to use the money to invest in its pricing and personalisation technology, and prepare for further expansion around Europe. Also, auto and marine specialist Concirrus has raised a further $6m following its previous $20m Series B in February.

Speaking of Concirrus, I bumped into a random chap earlier this week and ended up discussing them. Someone I’ve never met, in a cemetery, whilst out on a 6am dog walk. Even though Concirrus is ranked – by us at Sønr – in the Insurtech 100, he was quite adamant they didn’t have the best solution to manage risk in the marine insurance industry.

How do I find these people?
I now tend to walk the dog a little later in the day.

There’s been an absolute mountain of new launches this past week. A few stood out… let’s get the obvious one out the way.

Lemonade is back in the spotlight with the US launch of their new Pet insurance product.

It comes with all the usual Lemonade slick branding, ability to get covered in seconds etc. If you’re going to do pet insurance, it’s worth checking it out.

insurtech investments

Keeping with the US it looks like Walmart customers can now pick up slow cookers, canned goods, toilet paper, camping gear and…health insurance? It has formed an insurance agency in Texas to sell Medicare policies and you know what, with so many currently exposed to a lack of health care, maybe this isn’t such a crazy move.

Another health launch is the Mighty Health app – a personalised training, nutrition, and wellness ‘coach’ for people over 50. It aims to help users improve strength & balance, their weight, and improve your heart health.

Last health-related business is today’s news that The CareVoice is stepping into the European market. I first met these guys in Shanghai and have enjoyed following their growth since.

The CareVoice provides a mobile-based data-driven SaaS platform and work with the likes of AXA, Ping An and ZhongAn to digitise the experience of their members. Having just completed 3 months of business development exploration into the European market they’ve committed and have joined the newly launched Digital Health Innovation Program from InsurTech Hub Munich.

insurtech investments

Something that also grabbed me this week – I was reading about The Micro Insurance Company, formed by the merger of STP Group, MicroEnsure and TonkaBI.

Announcing the launch, their CEO Harry Croydon wrote on his LinkedIn post:

This group brings together my vision to serve the many millions of people who struggle to find insurance through traditional routes. We are here to deliver insurance through new partnerships and channels that form the new digital economy. Micro insurance is more than insurance for Asia, African and Latin America.

Reimagining claims
Following on from my chat with Daniel Schreiber (Lemonade) and Alan Lau (WeSure) you can now tune investments into another Insurtech 100 interview. This time Jonathan Swift and I speak with Adam Rimmer (Co-Founder of FloodFlash), Jamie Yoder (President of Snapsheet), and Adrien Cohen (Co-Founder and President of Tractable).

We hear about Tractable’s vision to use AI to accelerate the entire claims process, Snapsheet’s automated workflow from FNOL to settlement, and FloodFlash’s continued success in parametric insurance.

Plus, you get to see the moment Swifty’s ginger cat joins the conversation and seamlessly blends into his Viking beard. It’s all pretty magical.

Right, time to call it a day.

Take care, keep healthy, keep buying platforms to help accelerate the delivery of your digital agenda, and catch up soon.

Have good weekends all.


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