Insurtech: Opportunities in Consumer Products
How to create new products in a $150 billion dollar market?
👋 I’m Zoe: builder, advisor, ever curious, built 11 MVPs, featured on Lifehacker, Product Hunt #1, and tech blogs in 7 countries. Also a Medium Top Writer & HackerNoon winner in VC topics. I’m part of On Deck Founder, ODF10.
At Venturescale, I unpack new insights on profitable markets—and how you can build and monetize the future of consumer tech. Today, we’ll focus on Insurtech. Read here if you’re interested in online shopping, D2C, Fintech, E-Commerce.
Insurance is one of the oldest industries. It has its root back in 1752. Everyone needs it. It protects the financial downside and provides cash in the long term. The middle and upper class spends on insurance for tax optimization. Companies buy insurance to attract and retain talented employees.
Insurtech companies exist to make buying insurance a delightful process. Today, you can buy insurance online, submit/receive insurance claims, “group-purchase” a policy (peer-to-peer insurance), find your coverage needs, and compare policy pricing. They compete with incumbent insurers which often rely on human brokers, pushy sales agents, and lengthy claim processes to help clients get paid.
We’ll examine companies that provide consumer-facing insurtech products—for home, health, auto, life, small businesses, and more. Then, we’ll reveal exciting whitespace where new players can capitalize and monetize.
1. Key trends
(1) Insurtech is growing exponentially:
The global insurtech market is worth $39.4 billion by 2027, at a 48.9% market growth rate.
In 2021, insurtech funding hit $15 billion, up from $7.5 billion in 2020.
Lemonade, Root Insurance, Hippo, and Clover Health have gone public.
(2) Insurtech companies are getting successful exits:
10 unicorns were born in Q4 2020, including,
Next Insurance - small business insurance
Bright HealthCare - medical insurance for individual and family
Collective Health - employer health benefits
Coalition - cyberinsurance
Hippo - homeowner insurance
(3) Making other life areas insurable:
Pets are insurable— Pet Assure, ManyPets (fka Bought By Many).
Personal security risks are insurable. VisitorsCoverage offers kidnapping, ransom, and terrorism insurance for people doing business in economically unstable countries.
(🔒 Full version) +6 more key trends in the insurtech space. These insights will help you capture specific customer needs:
🔑 (4/9) How to maximize marketing distribution and profits using this insurtech model? (3 company examples)
🔑 (5/9) How to keep 100% of revenue ownership as an online insurer platform? (4 company examples)
🔑 (6/9) Mobile-first insurance drives purchase conversion. How to implement? (2 company examples)
🔑 (7/9) This emerging trend has unlocked untapped market needs (3 company examples)
🔑 (8/9) Crypto industry and insurtech, where’s the trend heading? (2 company examples)
🔑 (9/9) Asia-based insurtech winners and business model that works (3 company examples)
2. Market players, competitors & databases
Find market niches in the Insurtech space, discover competitors, and explore ways to differentiate your new ideas:
🏢 Total 107 company examples across different niches.
🔖 Total 9 positioning categories in Insurtech
🗃 Company databases with key information: value proposition, website link, funding type, total funding raised, year founded, company size, and location.
👌 Filter competitors by categories. Or search by product name, country, funding stage, etc.
3. What problems do they solve?
(1) Slow and complicated claim process:
Home insurance claims may take 48 hours to 12 months. Car insurance claims take between 1 to 2 weeks to settle. Life insurance claims take 30 to 60 days to resolve.
Root allows users to file a car accident claim online in 3 minutes via an app where users can upload car accident photos.
Hippo will assign a Claims Concierge for home damage incidents, gather photos, inspect, pay the claims and provide vetted home repair professionals. Users reported having their home inspected the “next day” and claims were done in a “super quick and timely manner”.
(2) Overpriced insurance:
Traditional insurance is unfair to consumers due to complicated processes and policies.
Bright Healthcare makes health insurance affordable by offering $0 specialist visits, generic prescriptions, and cash rewards.
Metromile helps consumers save 47% on average through pay-per-mile insurance without overpaying auto insurers.
Branch makes insurance less expensive by bundling auto and home insurance at the point of transaction.
(🔒 Full version) +4 more well-defined problems in the insurtech space. Solving the right problems will help you build something people want:
🔑 (3/6) What specific problems do Lemonade and The Zebra solve?
🔑 (4/6) How to solve market problems through verticalization? (3 company examples)
🔑 (5/6) How to make insurance even more affordable other than digitizing the buy/claim process? (2 company examples)
🔑 (6/6) How to identify market gap and provide the right solution? (3 company examples)
4. How to monetize?
(1) Peer-to-peer (P2P) insurance model
Lemonade’s P2P model pools claim money based on small groups of policyholders that pay premiums. If there’s money left in the pool at the end of the policy period, policyholders get a “cashback” in the form of donation.
Lemonade takes a flat fee from customers’ premiums and donates leftover insurance premiums to social impact.
This model allows insurtech companies to offer lower & affordable premium rates than the partner-agent model, and maximize profits through digitized claims processes.
(🔒 Full version) +4 more business models and monetization techniques:
🔑 (2/5) The most common way to de-risk your startup revenue generation without complicated tech & features upfront. (3 company examples)
🔑 (3/5) How to drive purchase conversions in a shorter time period by adding this revenue model? (2 company examples)
🔑 (4/5) Insurtech winners often create highly-differentiated products using this model (4 company examples)
🔑 (5/5) Add this business model to reach more customers (1 company example)
5. What are the next big things?
(1) Insurance for crypto assets:
The future of insurtech is decentralized. As crypto assets are becoming more widespread, new solutions are needed to safeguard cryptocurrency.
Use cases include:
(1) theft and cyberattacks
(2) coverage for loss of funds
(3) loss of private crypto key
(4) account theft and device hacking
(2) On-demand economy:
More and more people are working in the self-employed, gig economy. This group of people doesn't have access to employee benefits.
As the sharing economy is projected to hit $335 billion by 2025, more solutions to protect workers in the sharing economy will rise.
(🔒 Full version) +3 more insights that explore the future of insurance, what new solutions will look like, where’s the market demand, and answers the most important questions for your investors:
🔑 (3/5) What kind of new products are needed to satisfy the growing insurtech market?
🔑 (4/5) Health insurance is worth USD 3.3 Trillion by 2028, where is the untapped market?
🔑 (5/5) These 3 companies are building insurtech for the DeFi space.
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