The numbers behind the challenger banks and partnering to innovation success

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What a couple of weeks. Coronavirus is declared a global health emergency and Australia continues to burn. And whilst the world is imploding, tonight the UK leaves the EU.
 
As the snail said to the whale, “I feel so small”.

Or, for those who aren’t endlessly reading Julia Donaldson books to small humans, a more hopeful and relatable quote from the late Kobe Bryant:
 
‘Everything negative - pressure, challenges - is all an opportunity for me to rise.’
 
Inspired by a chat with Dan White from Ninety Consulting and reading Behind the Cloud by Marc Benioff, I’ve decided it’s time to do a little more for the world [than be the world-leading market intelligence platform for the insurance sector :) ].
 
And so, next week I’ve lined up a Finding Our Purpose session at Sønr HQ.
 
I’ll keep you in the loop on where we get to there.
 
As for the ‘being the world-leading market intel platform’ we’ve just taken on a number of new clients who have moved from CB Insights to Sønr. Huge news for us and I’m sure the timing is no coincidence as we’ve recently launched Sønr’s new enterprise collaboration features.
 
I’ve a tonne of respect for what CB have built and equally have all the confidence in the world that Sønr is, and will continue to be, a better product for the corporate innovator.
 
If you haven’t checked out Sønr, drop me a line and I’ll sort you and your team with a free trial.
 
Time to jump into some market news.
 
The banks are finally giving challengers the credit they deserve
Over the past few years we’ve heard a lot about Insurtech following the footsteps of Fintech, so how about we kick off with some banking activity?
 
Off the back of last week’s Nimbla partnership, Barclays has taken a minority stake in Flux, the startup which issues digital receipts directly within banking apps. To date, Flux has issued over a million receipts in this way through partnerships with retailers.

And BNP Paribas have been busy. They chipped in to UK-based money transfer company Currencycloud’s Series E this week, and announced an expansion of their partnership with data aggregator Tink.
 
Tink, the Swedish fintech is currently used by 4,000 businesses including PayPal and several large consumer banks, and plans to push further into Europe with its Open Banking data platform.
 
But it’s not all rosy for the fintechs.... Oh wait, it is.
 
Word on the UK’s street is that challenger bank Monese is preparing for a £100m raise at a valuation of £1bn+. Nice. With over 2 million people signed up, its current growth rate will the company reach 5 million before 2021.
 
Australian fintech Judo has also just published some numbers; its SME customer deposit totals a whopping $1bn to date, and Germany’s N26 has hit 5 million customers (not literally), half of which were added in 2019 alone. Interestingly, a good chunk of these came from its recent-ish step into the US market.

With such huge adoption it’s probably not that surprising that both the big banks and insurers are pouring money into this space.
 
Allianz has just pumped in $10m and launched its own fintech HeyMoney, promising to help customers manage their bank accounts, utility contracts and, of course, insurance.
 
And 23 of the top 100 US banks have just put cash into Canapi Ventures, a VC which has closed its inaugural fund at $545m. Its focus is to invest in the early and growth-stage companies which are transforming outdated business models.
 
Finally, because sometimes it’s not all about the gazillions, Dutch challenger bank Bunq has planted over 40,000 trees in the last two months, the equivalent to 13,000 flights from Paris to New York. Good work Bunq.
 
--
If you want to go fast, go alone. If you want to go far, go together
 
There’s been a huge amount of focus on the failing of corporate innovation labs recently. Personally labs are something I’ve never given much time to, hence building a platform explicitly focussed on helping companies identify external innovation opportunities.
 
A good read I came across earlier this week was this: Is your innovation process a corporate illusion. Worth a 2-min read.
 
Recognising the ability to expedite strategy through partnership, Berkshire Hathaway has partnered with AI solution developer CLARA Analytics to help improve its compensation claims operations, and with Bold Penguin to enable agents and brokers to triage, quote, and bind commercial insurance coverage.
 
Also, out in the US, Nationwide has announced partnerships with 2 telematics startups to provide a suite of functions to fleet managers. Whilst on telematics, it was good to see IMS, a subsidiary of UK’s Trak Global Group, has announced the availability of its usage-based insurance (UBI) platform in North America.
 
Using this platform, IMS will enable US and Canadian insurers to rapidly scale next-generation UBI programs that go beyond the common approach of offering motorists discounts in exchange for sharing limited driving data.
 
It was also good to see that travel Insurtech Pluto has announced a partnership with Yolt, the money management app, this week. Pluto's services will be available to over a million new customers as it is integrated into Yolt's Connect Marketplace. Well done team Pluto.
 
 
“Sometimes your best investments are the ones you don’t make”
Ah the words of good ol’ Donald Trump. And you know, maybe if you’re born into billions and you’re a bit of an idiot, it might just be pretty good advice.
 
Back to business.
 
Whilst partnerships are very much on the rise, there’s still plenty of money sloshing around in the insurance/tech/innovation space.
 
US-based Slope Software, which aims to modernise actuarial software, has raised a $1m seed round.
 
Also Socotra, the cloud platform that enables insurance companies to rapidly develop and deploy new products, has raised a $15.2m Series B. As has Zipari, a consumer experience platform for health insurance customers, albeit Zipari’s is to the tune of $22.5m.
Finally Cape Analytics, the geospatial imagery startup secured an undisclosed Series C round.
 
Other interesting M&A activity we picked up on this week was Hyperion, the London-based, international intermediary group, announced they’re sitting on a £300m war chest for growth and M&A. And health insurers Centene and WellCare have finalised their merger, becoming the biggest health insurer by membership (23.4m people). Wow.
 
 
My boss asked me to roundup 17 employees pronto. So I said, “20.”
As always, plenty of new innovation hitting the market.
 
Currently in stealth mode, UK price comparison insurtech Rnwl has received FCA approval and plans to launch in Q1 2020. It promises an "insanely simple insurance switching service".
 
Staying with FCA news and By Miles, the UK-based pay-by-the-mile auto Insurtech is now authorised under Open Banking regulations. It’s the first insurance startup to have achieved this making all manner of new payment-related services a possibility. Super exciting.
 
Keeping local a little longer and Buzzvault has rolled out monthly payments for home insurance designed to make premiums more flexible and Babylon Health has inked a 10-year deal with the UK's city of Wolverhampton, providing its 300,000 residents with an integrated health app. A 10-year deal you say? Who signs 10-year deals any more?
 
We also saw Trōv is now hiring in the UK. Interesting. And over on the European mainland Generali has launched its Innovation Fund to stimulate and accelerate innovation by triggering and feeding local and global innovative ideas.
 
And out in the US and Slice Labs has announced the launch of four new AI-powered services to help insurers protect their clients from risk. The products include a data prediction tool that classifies client business activity to help evaluate potential risk, a cyber risk modelling service, geographic scoring and claims fraud prevention tools.
 
And now for something even more interesting. Whilst, there’s naturally tonnes of stuff taking place in the UK and US there’s an absolute mountain of interesting activity further afield.
 
India’s Digit Insurance which offers consumers auto, travel, health and mobile insurance has raised  $84m, which it intends to spend on new customer acquisition (it already has 5m customers!) and scaling the business.
 
Stepping a little further east and MassMutual Ventures has launched a $100 million fund, aiming to invest in digital health-care, fintech and enterprise software startups in SE Asia. Personally I find this so freaking exciting. There’s so much opportunity for business growth out there.
 
Out in Kenya and Lami Technologies (run by Oxford Uni alumni Jihan Abass) has launched Kenya's first digital car insurance. Griffin Insurance is entirely smartphone-based and includes features such as instant ambulance dispatch and towing call-outs in the event of an accident.
 
Keeping with Africa and Solvency in South Africa has just launched. Its ambition is to bring ‘fairness’ for customers who pay more in premiums than they claim for by offsetting premiums paid against a savings account.
 
And finally, we noticed that Amazon has just filed a series of international trademarks for ‘Amazon Pharmacy’. In particular for Australia, UK, Canada and the US.
 
 
The rearview mirror is always clearer than the windshield
I’ve been doing a load of reading recently. A few gems I thought I’d share:
 
Why Entrepreneurs Don’t Learn From Their Mistakes
An interesting piece of research breaking the myth surrounding the ‘value’ of failing fast, failing hard.
 
How to Invest in Startups
In a world where “it’s much easier to get LPs to give you money for your seed fund than it is to get a meaningful allocation in a ‘hot deal’”, Sam Altman talks through how to be a good startup investor.
 
One to listen to is WeCrashed. You probably don’t need much of an explanation on what that one’s about. Actually, whilst you’re there, make you sure you tune into to The Drop Out also. Just. Incredible.
 
Right, that’s me. I’m done. Out with pals this evening and ‘trampolining’ with the little one in the morning. Writing that I realise I should have definitely planned those two activities the opposite way around.  
 
Before I shoot, congrats to all the winners and finalists in the Insurance Post Creative & Innovation Awards. It was good fun judging but definitely better fun catching up over a beer with you all last week.
 
And last thing. I’ve made a pledge (to myself) to write more, speak at more events and generally be a little more social. If you’d like to grab a coffee, chat, or simply connect, my contact details are below.
 
Have good weekends all.
 
Matt


MATT CONNOLLY
Founder & CEO 

+44 7788 711 104 
linkedin.com/in/wearematt
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.
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