Hello and a somewhat belated welcome to 2020. I was welcomed to the New Year with a new notebook from the lovely wife…
With that, January has already kicked off with one new Sønr Enterprise client, the roll out of Sønr Insiders across 12 insurers from around the world, and an office move.
Whilst it was good to spend December in the mountains I bloody love getting back to the desk and doing this work stuff.
Right, let’s dive into some market news. For some it’s been a busy couple of weeks, namely Amanda Blanc who has joined a new insurtech board every day so far. Seemingly less busy for Paul Rippon, Monzo’s co-founder, who is standing down to spend more time with alpacas. Love it.
Chasing dreams and getting deals done
There’s been a fair bit of pen to paper on the investment front over the last couple of weeks.
Out in the States, auto insurance startup partnerships Clearcover raised a $50m Series C and Corvus, which offers AI-enhanced cyber insurance policies, raised a $32m Series B. Amongst other things, both businesses talk of putting the new capital against local market expansion.
In Europe we saw two further Series C raises: Kry, a Swedish telemedicine platform raised $155m and Swiss health and insurance tech startup partnerships Dacadoo added to its fundraising tally, which now sits at a total of 70m Swiss Francs (circa $72m).
Dacadoo is a particularly interesting one. It partners with insurers, providing a comprehensive and white-labelled digital Health Engagement Platform motivating users to achieve and maintain healthy lifestyle habits. Sound familiar? I imagine the team at Vitality might think so.
In the UK we’ve seen a couple of much more early stage raises, both from the ‘crowd’.
Honcho, the UK’s first reverse auction marketplace, surpassed its £700k target. If you don’t know these guys, they’re definitely worth an explore – the app aims to increase competition between insurers by enabling them to bid in real-time to win a consumer’s business.
And Fleet, again app-based and even earlier stage, pushed beyond its £300k fundraising target to enable dealers to offer short and long-term car subscriptions.
In order, US head-officed MGA Insurify has raised $23m in a Series A round and as a nice segue to the M&A activity, below, Insurity, the data analytics and cloud services company, this week acquired SpatialKey, a geospatial analytics firm for P&C insurers.
M&A – the realisation of all that hard work or the brutal crushing of an entrepreneurs soul!
And so with Christmas out of the way and the lawyers back at their desks, a whole handful of acquisitions have wrapped up.
One of my favourites is Aon’s completion of CoverWallet which now joins Aon’s New Ventures Group. I’ve been a huge fan of both these companies for a while now and the acquisition is a smart one.
CoverWallet is a leading digital insurance platform for SME businesses and the acquisition will expand Aon’s position in the fast-growing commercial insurance market for smaller businesses, while leveraging CoverWallet’s technology and data and analytics capabilities to develop and scale digital client solutions.
When I hear about these acquisitions there’s always a part of me which worries (or more accurately, dies inside). I’ve been through one first-hand (successful but painful) and have seen others seriously not work out, for all parties.
Yesterday I read a quote from Tony Goland, Aon’s Chief Innovation Officer and Head of the global New Ventures Group:
“Our first priority is to bring the two teams together so that our new colleagues at CoverWallet can start working closely with the Aon team. Then, we want to harness the culture, the talent and the capabilities of CoverWallet and scale it to something that is relevant for a company of Aon’s size”
I’ve not met Tony yet but I like him. Let’s hope it works for both their sakes. Could be huge if so.
Also out in the US, Bold Penguin, the commercial insurance exchange platform, announced it has acquired Xagent, the independent, single-entry, multi-quote platform for standard and surplus lines. Yeah, they both could do with working on their one-line summaries.
Closer to home, our friends at Optio Group in London have also been busy with their concentrated shift to deepen their innovation and distribution activity. They’re another step forward with the acquisition of London-based Newbridge Risk Partners.
And Sapiens, the global insurance software crew, has acquired German scaleup sum.cumo for just over €28m. sum.cumo is all about helping traditional insurance companies launch e-commerce components, as well as do a load of consulting on UX, marketing, and technology solutions. Sounds like a pretty sensible fit.
Finally, really far from home, Tower, one of New Zealand’s largest fire and general insurers has completed its acquisition of Youi NZ. Not sure if you ever followed Youi, but they launched in New Zealand back in 2014, promising to shake up the house, contents and car insurance market.
And shake up the house it did. In 2016 the Commerce Commission launched an investigation into its sales tactics, fined them $320k for misleading customers and well, the long and short, is it’s stepping away cap in hand.
Let’s hope Tower can get it into some decent shape.
RIP innovation labs. Long live startup partnerships
Two really insightful comment from Graeme Dean of Cover Genius stood out to me:
“Most insurers have the legacy of wanting to build things themselves. That is the tradition in insurance companies – what you find is the more mature ones realise the benefits of partnering and learning from those young players, but what they will probably want to do is focus on the ones that are the most successful.”
“The majority of [insurers] lack the technical capabilities and/or the global frameworks required to keep up with existing insurtechs who are growing and diversifying every day,”.
And low and behold that’s where our market scanning platform Sønr comes into play. It helps you keep up with all the insurtechs and provides global frameworks to help you manage this across your teams. Drop me a line if you’d like a trial of Sønr.
To support the above, a few startup partnerships to talk through.
In the UK, Hiscox has kicked off the year with a couple of announcements.
They’ve entered a new multi-year deal with Concirrus. The plan is to embed Concirrus’ behaviour-based data analytics platform, Quest Marine Hull, as part of its drive to deliver progressive, analytics-based underwriting. Nice.
And a couple of days later they entered into an agreement with cyber risk analytics company CyberCube, this time to leverage its tech to gain better insight into cyber risks.
Stepping into mainland Europe, or what we’ll soon be simply calling Europe, German insurer ERGO has launched a new telematics product, Safe Drive. It’s aimed at drivers under 25 years old, with end-of-year bonuses offered to the best drivers.
When I heard about Safe Drive it reminded me of a chat with a pal in the telematics space I had a few years back.
He talked about launching an end-of-year discount for the best drivers. They were surprised when none of their young drivers wanted this. They later found out it was because the bank of mum and dad paid for their insurance.
They then launched Apple iTunes vouchers as a reward. Again, that fell short. This time because all the ‘youngsters’ stream music for free.
And so they tried a hard cash incentive. Funnily enough that was the one that clicked.
Right, I’m story-telling.
The final startup partnerships that stood out was Singapore’s transport, food delivery and payment company Grab teaming up with Chubb to launch Travel Cover.
The product is an on-demand travel insurance that Grab users (of which there are 36m!) can purchase within the app, distributed by GrabInsure Insurance Agency, Grab Financial Group’s insurance platform.
With 10.4m outbound departures from Singapore last year, and a smartphone user base projected to hit 4.65 million this year, sounds like those $2.50 covers might just add up.
From bikes to pizza
A few randoms I’ve enjoyed reading over the past couple of weeks.
Keeping with the world of insurtech and I was surprised to learn Tune Protect Group is selling its stake in Laka for £555,369. Roughly. It feels a little out of kilter as they only invested in June 2019, but they state the disposal is in line with its digital transformation strategy.
Apparently the group intends to ‘channel the proceeds from the disposal towards strengthening its own homegrown digital and technology capabilities’. Hmmm, I’d like to know a little more on that. It stated its shareholdings will be sold to LocalGlobe and Creandum.
Also out in Asia it was reported that fintech giant Ant Financial has applied for a digital wholesale banking license in Singapore, joining the race to create virtual lenders after gaming startup partnerships Razer and Grab applied for full banking licenses in the same week.
“If you serve burnt pizza, you’re not getting feedback on whether folks like pizza. You only know that they don’t like burnt pizza. Similarly, when you’re only relying on the MVP, the fastest and cheapest functional prototype, you risk not actually testing your product, but rather a poor or flawed version of it.”
Time to enjoy Friday.
Have a good weekend all.
Sønr Weekly Insight
Sønr Weekly Insight
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