On two occasions this week I sat with innovation heads who said their market strategy is to remain a close follower.
If that is true, the fact they’re in that role is already a paradox :)
The reason it’s particularly poignant is it comes at the time we’re rebranding and relaunching Sønr:
The reason I created Sønr is based on knowledge being a key determinant in building and executing successful strategy.
If your strategy is to copy what’s already in-market, what you’re actually copying is the artefact of past effort.
I get the cost-saving of not investing into R&D but continued innovation will only widen the space between the leaders and the ‘close’ followers. Eventually it’ll reach the point that, when there is sufficient strategic imperative to respond, it is too late.
Either the resources won’t be there or the corporate innovation muscles simply won’t be strong enough to respond appropriately.
More often than not, the recovery can only be met through costly acquisition, often at an expense greater than the original investment into innovation in the first place. Oh, the irony.
The long and short, whichever strategy you take, you still need to know what’s going on.
And to be really clear:
Reading newsletters (including this one)
Rocking up to events (which are now cancelling around the world)
Fielding inbound contact from startups ≠
Knowing what’s going on
Whilst I’m sure you feel like you’re doing lots, the knowledge you’re acquiring is no different to that of your competitor.
In today’s market, it’s imperative you look outside your line of business, if not outside your industry, and take a global view. Opportunity, whether you’re a market leader or close follower, is unlikely to come from around the corner.
Just look at that, a whole load of writing and not one mention of Coronavirus.
And now for a race through a few things that jumped out this past fortnight:
Talking about expensive acquisitions, I’m sure we all read Aon is to buy Willis Towers Watson for a gazillion dollars. Or something like that. Looks like Covéa is also set to acquire PartnerRe. This time a mere $9bn.
And in startup land, the ultimate quick-quote property insurtech Homelyfe was acquired by Freedom Services Group (which also owns Action 365 and Pukka Insure) for an undisclosed amount. Interestingly the original founders of Homelyfe are shedding the brand to focus on their PaaS pivot business, Aventus.
On the partnership front, Zurich has formalised things with Carpe Data to provide the tools to improve claims efficiency and fraud protection. The pair had initially piloted Carpe Data's ClaimsX solution in 2019, and have now agreed to scale it across 2020.
Canada Life has partnered with the telemedicine startup Dialogue to offer its benefit plan customers access to Dialogue's bilingual healthcare platform and integrated health services.
Chaucer has teamed up with Artificial Labs to launch a new underwriting platform that specialises in high-volume specialty products.
And IAA and Snapsheet are working together to integrate their claims solutions and management platforms to create one solution, reducing claims cycle time and automating information exchange.
There’s absolutely tonnes more but there’s a limit to how many synonyms there are for the word ‘partner’ so I might just wrap it up there.
Actually, one that did catch my eye as I might or might not (subject to further announcements from monsieur Macron later) be heading skiing tomorrow…
Insurtech-as-a-Service and travel product specialist Setoo has partnered with Israel's largest travel agency to provide cover against ruined ski holidays. Using the number of open ski lifts in a resort as a defining metric of ski conditions, customers paying for this option are notified in advance if their trip is at risk; choosing to cancel triggers automated claims settlement, with Setoo also enabling personalisation and real-time pricing.
Not sure snow is my major worry this trip but a nice bit of innovation nevertheless.
With the markets in flux it’ll be interesting to see if the crazy money continues to kick around.
Before jumping into investments, a couple of new funding rounds - Kleiner Perkins brought in $700m for their nineteenth fund, KP19, and Anthemis closed $90 million, lined up to invest specifically in Insurtechs.
In no particular order, Instanda the 'no-code business platform' has raised a $19.5m. Omniscience, the data analytics company that helps underwriters understand critical risks, raised $12m. Both Series A and definitely ones to explore a little more.
The Portuguese healthtech SWORD Health raised another €8.1m this week as it seeks to expand its digitised solutions for physical therapy. Based on connected, wearable motion trackers, Sword Health's solution enables in-home therapy sessions, guided by an automated 'Digital Therapist'. With existing partners including insurers and self-insuring employers, this second phase of their Series A is intended to help grow and service their client base.
Somewhat earlier stage, Canada’s Relay announced a $3m raise and Denmark’s Penni.io €2m. Forgive the lack of detail on these but you can just click through into Sønr. It can’t be all served up on a plate, right?
Last but not least, in the UK the self-driving car startup Five has closed a bumper $41m Series B with investment from Direct Line Group as well as a number of previous investors.
Before I close this section, did anyone pick up the story that Sequoia - for the first time in its history - parted ways with a newly funded company? Apparently there was a conflict of interest with one of its current portfolio and so they handed back the board seat, the information rights, the shares and its FULL investment.
What’s that, $21m for nothing? A-mazing.
A couple of new launches.
Verisk, in partnership with SCOR, is launching a new analytics platform for automated underwriting of life insurance.
And Vitality has launched its "At Work" programme to open up preventive healthcare to all employees of their SME customers. Offering easy access to telemedicine, physio and mental health support as well as its discounts for gyms and fitness purchases, employers will be able to track their employees’ health, and claim discounts if their workforce can collectively maintain a healthy lifestyle.
Finally, the opposite to a launch - the UK’s Wrisk is closing its contents insurance app. There’s a lot of words in its announcement (weirdly it reminded me of Trump giving his state of the nation address on Coronavirus) but essentially they’re moving from a direct to a partnership model.
By the way I’m a big fan of Wrisk and now feel the Trump reference was a little mean.
Other insurance good stuff
What to share, what to share. It’s performance announcement season so loads of noise out there.
One that interested me, mainly because we’ve been doing a load of work with auto-switching, was the near 50% fall YoY in profits from GoCo Group’s Chairman. He cited it was due to ‘the investment in its AutoSave service’ which has over 300k customers. Small numbers but good to see the early traction.
Staying close to home for a second and gig-driver Insurtech Zego has secured an insurance broker licence in France. Interesting. The new licence will support the company's continued expansion in Europe regardless of oncoming Brexit regulations.
Out in India and payments giant Paytm is stepping fully into the insurance market. Having dipped a toe as a corporate agent since 2015, when they partnered with a growing list of big domestic players such as ICICI Prudential Life, Paytm will now become a full intermediary with their own broker license, with customers accessing policy admin and claims services at selected merchant points.
How quickly the world changes.
Finally, to wrap up on a high, hopefully you’ll have already seen Lemonade is launching a $20m non-profit foundation. Bloody love it.
By unanimous vote of its board and shareholders, the company has donated shares valued at over $20m to the foundation, which will focus on harnessing AI, data and software to develop socially impactful products and programs.
I can’t quite promise the launch of our social initiative will equate to $20m. Not in year 1 at least, but we’ll get there. Especially if you start to put some of the events money you’re not spending this year to a Sønr license. Just saying.
We’ve worked closely with Rahul for a few years and he’s got a keen eye on how the market is changing, the innovation driving that change and how BGL Group needs to respond.
Have good weekends all. If you need me, I’ll be in the mountains.
Whether I decide to come back is another question.
Sø.Nws is brought to you by Sønr.
Sønr is a world-leading market intelligence platform created specifically for the insurance sector. It is used by small and large insurance companies, around the world, to accelerate corporate innovation.
It provides intelligence on market trends, competitor playbooks and disruptive tech companies globally. It also has a number of features that help you track and manage scouting activity across your organisation.