NAVIGATING THE DIGITAL DECADE: 25 EMERGING TECHNOLOGY-LED BUSINESSES WELL PLACED TO HELP INSURERS SUCCEED
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NAVIGATING THE DIGITAL
DECADE: 25 EMERGING
TECHNOLOGY-LED
BUSINESSES WELL PLACED
TO HELP INSURERS SUCCEED
2021
About Oxbow Partners
Oxbow Partners is a management consultancy exclusively serving the European
insurance industry. Our clients include leadership teams at the world’s leading
insurers, reinsurers, brokers and private equity firms.
Senior executives choose Oxbow Partners when they want a fresh perspective
from a high-calibre team of industry specialists that thinks deeply about each
client’s unique situation and has a track record of delivering insight and impact.
Our consulting engagements span growth, operations, technology and M&A.
Our Market Intelligence team offers unique analysis into the UK market.
Magellan™
Magellan™ is Oxbow Partners’ insurance technology navigator, containing
information for over 2,000 technology vendors targeting the insurance industry.
We cover InsurTechs and established vendors and our taxonomy and data are
specifically designed for insurance.
Curated Search allows executives and investors to find technology
solutions perfectly suited to their needs. To find out more, please visit
www.oxbowpartners.com/magellan or contact magellan@oxbowpartners.com
2021
Contents
A: Welcome and 2021 Advisory Board 4
B: InsurTech in 2021 5
2020: An exceptional year for digital acceleration 5
Three themes to watch:
1. Distribution and product - From affinity to embedded insurance
and ecosystems 8
2. The underwriter of the future - Modularity and Machines 10
3. Health insurance - Real disruption on the horizon? 11
Three imperatives for executives in the digital decade 13
C: I nsights from Magellan™, our insurance technology navigator 14
D: T
he InsurTech Impact 25 16
What has happened to previous years’ Members? 17
Impact 25 2021 Member profiles 21
Impartiality and objectivity
Impartial and objective analysis is central to the Oxbow Partners InsurTech Impact 25.
All Members of the Impact 25 were selected on their own merits. No Member has paid a fee
or offered any other financial incentive, directly or indirectly, to be included. The criteria and
methodology that we used to choose Members is described later in the report.
2021
4
Our 2021 Advisory Board
Welcome This year’s report has benefited from the support and insight of our
Advisory Board. These industry leaders have helped us with both the
selection of Members and analysis of 2021 themes. We are grateful
to them for giving their time generously.
We are happy to present the fourth Oxbow Partners their innovation activities. Insurers continue to push
InsurTech Impact 25. digitisation and innovation and are working closely with
InsurTechs. Several Impact 25 companies are emerging
Since 2015 – the year we mark as the start of as ‘reference providers’ in their category. Willis Towers
this incarnation of InsurTech – there has been a Watson’s data shows that investment in InsurTech
proliferation of insurance technology startups and hit an all-time high of US$7.1bn in 2020.1 And, of
broad experimentation by insurers. The market is now course, several InsurTechs have completed IPOs,
maturing, and we are calling the end of the beginning. demonstrating an appetite from public markets.
Winning themes are emerging and corporates are
able to be more strategic in their investment choices. But change in insurance is slow. Even Lemonade – the
posterchild InsurTech – had only US$213m of in-force
In last year’s InsurTech Impact 25 we predicted premiums at the end of 2020 despite having raised Mark Allan Paolo Cuomo Stefaan de Kezel Anna Maria D’Hulster Gary Duggan
that the 2020s would be the “digital decade”. We US$480m of investment. And this is exactly what Commercial Director, Director of Operations, Director of Innovation and Non-Executive Director, Senior Advisor, Oxbow
speculated that the winners in 2030 would be “those should worry shareholders and management teams Bupa UK Insurance Brit Insurance Business Development, UNIQA, CNA Europe & Hardy, Partners. Former CEO
companies who were able to build digital propositions with a 5+ year horizon: change will creep up on the Ageas Group and Athora Holdings Ltd. of Saga
that attracted the millions of millennials who became industry.
first-time insurance buyers in the 2020s, who
innovated their use of data and applications, and who President Eisenhower noted that “urgent [issues] are
built the scalable infrastructure that enabled the next not important, and important [ones] are never urgent.”
wave of consolidation.” As the Covid crisis passes into history, the imperative
for change might become weaker, but preparing for the
One could be forgiven for thinking that the digital future of insurance has never been more important.
decade is off to a flying start. Covid has transformed
companies into virtual enterprises overnight, invisible We have once again spent the best part of six months
digital webs connecting people through technology. analysing the InsurTech landscape to identify 25
technology-led businesses that we believe are well Kamran Hossain Matt Jones Debbie O’Hare Andy Rear
But whilst 2020 undoubtedly represents a great leap placed to have an impact on the industry and help Director, Equity Research, Managing Director, Managing Director, Hannover Former CEO, Munich Re
forward, our view (explained in Section 1) is that it insurers succeed. We hope that you find the report Insurance, RBC Capital Anthemis Re UK Life Branch and L&H Digital Partners
was an exceptional year where the relative risk of not valuable. Markets Digital Business Accelerator
changing and the risk of moving fast and making some
mistakes reversed temporarily. Furthermore, we
argue that change has been focused on the current
business model but has not challenged it. Read-across
from 2020 to the industry’s ability to adapt and thrive
in the “digital decade” is, in our view, limited. Christopher Sandilands Greg Brown
Partner Partner Additional thanks
Innovation in the industry continues at pace. The Oxbow Partners would like to thank the InsurTechs who applied for inclusion in the Impact 25,
‘big 4’ reinsurers’ 2020 investor days showcased 1 https://www.willistowerswatson.com/en-GB/Insights/2021/01/quarterly-insurtech-briefing-q4-2020 successfully or not, for their considerable efforts providing information about their businesses.
2021
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Fig. 01
Ecommerce sales as % of total retail sales
2020: An exceptional 35%
year for digital acceleration
31.9
UK Germany France
30% Up 11ppt in 1 year
25% Up 12ppt over 10 years
20.8
2020 was the year of many things, including the lead its technology and digital initiatives. 20%
cliché. One that turned out not too far from the
truth was “five years of digitisation in five weeks”. Willis Towers Watson found that InsurTech 15%
Executives swapped the board room for Zoom - investment hit record highs in 2020, reaching 8.5
catapulting a previously obscure company from a US$7.1bn raised in 377 deals.4 Lemonade led a wave 10%
steady $200m of quarterly revenue in Q4 2019 to of listings with Root, Metromile and Oscar following
nearly $700m in Q2 2020. Restaurants swapped and several more slated for 2021 demonstrating 5%
tables for delivery services and retailers had to move investor appetite for “disruptive” insurance
to digital platforms. propositions. 0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Data in the UK shows that ecommerce jumped 11 So was Covid the spark that catalysed the re-
Sources: For UK - Office for National Statistics: http://bit.ly/3s4fdSv; For France 2014-2020 - Statista: http://bit.ly/2OCDYH7; For Germany 2014-2020 - Statista: http://bit.ly/38RuFK;
percentage points in 2020 to 32% of overall retail invention of insurance? We believe not, for two For France and Germany, 2010-2014: Marketplace Pulse: http://bit.ly/3ls0dLC
sales, having grown 12ppts in the previous 10 years. reasons.
Similar spikes were visible in France and Germany.
First, 2020 experienced an exceptional risk profile,
Insurance innovation has continued to gather pace. where the risk of not changing exceeded the Fig. 02
Zoom quarterly sales revenue
Swiss Re’s B2B2C platform, iptiQ, broadened its risk of moving fast and making some mistakes.
strategy to offer both capacity and investment to Management teams had to race to implement new
InsurTechs and led Getsafe’s Series B round in ways of working and technologies just so that they
Germany2. Munich Re in the meantime moved its could continue to meet their regulatory obligations
Digital Partners busines into Swiss Re’s backyard by and customer promises. These risks have now
1000
taking on the John Lewis partnership with a promise reverted to their long-term norm and the pace and
to “re-imagine” the home insurance proposition urgency of transformation has followed 800
US$ million
for the UK department store.3 Allianz launched its
new Open Banking proposition called Heymoney in Second, we question to what extent real change has
600
Germany and Zurich poached a Ping An executive to occurred in 2020. Steve Hearn, CEO of broker Corant
400
Data in the UK suggests that ecommerce jumped
11 percentage points in FY 2020 to 32% of overall retail 200
sales, having grown 12ppts in the previous 10 years 0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2 https://www.reinsurancene.ws/swiss-res-iptiq-leads-investment-round-for-insurtech-getsafe/ 2019 2020 2021
3 https://www.insurancebusinessmag.com/uk/news/home-property/john-lewis-creates-home-insurance-partnership-236504.aspx
4 https://www.willistowerswatson.com/en-GB/Insights/2021/01/quarterly-insurtech-briefing-q4-2020
Sources: https://www.macrotrends.net/stocks/charts/SHOP/shopify/revenue
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Fig. 04
InsurTech funding data
“It’s amazing how much money has gone into
preventing serious injury on car crashes compared 8,000
to preventing fires and leaks in the home.” 7,000
7,108
6,357
Global, maybe put it best recently when he said than in an office. In Europe, where agents 6,000
that the insurance industry has so far “digitised its continue to dominate, the change is likely to be
existing business model”, but not challenged it. 5 more significant based on our interviews with 5,000
management teams. An executive in Germany told
US$ million
4,168
He was speaking more broadly than Covid but the us it was too early for data to tell a true and rounded
4,000
point was certainly true for 2020. Back in March, story, but that it seemed clear that companies would
digitisation was often as simple as COOs racing out need to accelerate their digital distribution initiatives.
to local shops to buy as many laptops for their staff In Austria, a digital broker reported that their 3,000 2,688
2,274
as possible. CIOs implemented software to facilitate “ambitious targets” were all achieved in 2020. 1,431*
remote working. Operating models and processes 2,000 1, 741
were updated and polices rethought. The same observations can be made about products.
An innovation optimist might say that it is too early 868
1,000 1,257
But the business model did not change. In the UK, for Covid-driven product trends to have played out, 348 276
product sourcing has remained largely unaffected but it is certainly true that little has changed for the
as price comparison websites already accounted customer. Propositions like usage-based motor and 0
for around 60% of home new business and 80% of smart home for the work-from-home era, remain 2012 2013 2014 2015 2016 2017 2018 2019 2020
motor. Most brokers operate remotely from their niche.
*2015 is distorted by Zhong An and Zenefits rounds ($931m and $500m respectively, light green portion)
clients meaning that nobody noticed that they Sources: Time series of insurtech funding from Willis Towers Watson and Oxbow Partners analysis.
were now speaking to someone at home rather As Gary Duggan, Senior Advisor at Oxbow Partners,
noted: “it’s amazing how much money has gone into
preventing serious injury on car crashes compared to
preventing fires and leaks in the home.”
Fig. 03 Relative risk of continuity
vs. rapid change for insurers So what does this mean for the industry?
But whilst 2020 undoubtedly represents a great leap
Lemonade: Challenging the business model
forward, our view is that it was an exceptional year.
Whilst there is a lot of hype around Lemonade’s challenging this consensus: the proof point will be Executives should challenge themselves about
Rapid change Read-across from 2020 to the industry’s ability to
strategy and proposition, it is their global operating if it manages to scale into core products (e.g. home, what their global target operating model looks
adapt and thrive in the “digital decade” is, in our view,
model that, in our opinion, should be watched motor) in multiple countries without building large like. Are end-to-end operations in each country
Risk
limited.
most closely (a theme we discussed in our 2019 operations in each of them. In that case it is likely really needed? Is a single technology core feasible
Continuity
Impact 25 report and on our blog). to have huge cost ratio advantage over traditional and efficient? Should the global target cost ratio
Indeed, as the Covid crisis passes into history, the
global carriers. be a fraction of what it is today? The clock could be
imperative for change might become weaker for
The current industry consensus is that markets ticking on the traditional business model.
corporates. After all, if the pandemic has proven
1990 March July are sufficiently diverse that they merit functions Arguably reinsurers agree given the strategies of
2020 2020 one thing it is the insurance industry’s resilience to
like distribution, product and compliance being their ‘direct’ businesses like Munich Re’s Digital
replicated in each country. But Lemonade is Partners and Swiss Re’s iptiQ.
5 https://thevoiceofinsurance.podbean.com/e/ep-68-steve-hearn-ceo-corant-global-one-broker-many-brands/
2021
7
extreme pressures: one would have preferred to be change, and this is something that should worry Injecting some Vitality into motor insurance
the CEO of an insurer than of a retailer in 2020. shareholders and management teams. The arrival of
price comparison websites in the UK motor market Vitality has partnered with Covéa to launch a new motor insurance product
This would be extremely dangerous. Change is slow shows why. in the UK. We believe that this is a proposition that the industry should be
in the insurance industry. Even Lemonade – the watching closely.
posterchild InsurTech – had only US$213m of in- In 2001, a website called Confused.com was launched
force premiums at the end of 2020 despite having by Admiral, then a challenger motor insurer. In the
What is the proposition? servicing. This scheme acts as a be short-sighted. Vitality has a
raised US$480m of investment in four rounds from mid-2000s the comparison proposition captured the
The company has not yet revealed useful hook for attracting new proven track record of proposition
December 2015 to April 2019. public’s imagination and the model grew rapidly. It
the details of its proposition other business and getting customers innovation, and of partnering at
took several years before insurers realised what was than that it will be telematics-based actively engaged with their scale (several of its international
But the forces for change are strong. Covid has happening: they were winning business only where and will provide rewards for things insurance product. The added health businesses are franchises
undoubtedly created some vectors which innovative they were cheapest but lacked the data or capabilities like “car free days”. benefit for the insurer is customer with local incumbents, like the UK
players – old and new – will exploit. For example, in to control where they wanted to be cheapest. It took self-selection, as only those who motor proposition).
the UK we see Vitality’s entry into the motor market them years to get on top of the situation. Industry However, Vitality’s parent, think they are good drivers are
as a landmark move given the South African insurer’s losses during this period accounted to many billions. Discovery, already has a motor likely to apply. If the UK proposition takes off,
proposition in South Africa and Vitality could soon challenge the
track record of product innovation and partnership
this likely provides more clues. Should incumbents be worried? status quo in other international
at scale (see box). Continental Europe might In the next chapter we outline three trends that are
Customers can collect “Miles” It is easy to find reasons to dismiss motor markets. Incumbents will
soon start to feel the impact of Lemonade’s next- shaping in the industry. In Chapter 3 we outline three which can be spent on things the potential impact of Vitality then need to decide whether to
generation business model (see box). actions that executives should take to prevent the like 50% cash back on fuel, 25% entering the UK motor market. partner or go head-to-head with
same predicament as UK motor insurers. off Uber trips and 20% off car However, we believe that this would this increasingly meaningful brand..
In other words, we predict slow but sustained
Fig. 05 Impact of price comparison website growth on UK motor market profitability Fig. 06
70%
Vitality Drive rewards proposition
-1.5
60%
-1.0 PERSONALISED WEEKLY GOALS USERS EARN DISCOVERY MILES USERS CAN SPEND THESE ON REWARDS
50%
-0.5 40%
£ billion
30%
0
Points earned for car-free days
20%
0.5 Cashback on fuel
10%
1.0 0% Points earned by daily good driving
2012 2013 2014 2015 2016 2017 2018
Pre-tax profit (excl. PYD) Aggregator share of motor
Sources: Milliman, Driving For Profit 2016; RBC Capital Markets, UK price comparison websites Feb 2018, Oxbow Partners analysis Points accumulate toward goals Targeted discounts
2021
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Fig. 07
Zhong An is a leading embedded insurer in China
$2,266m
2,250
Low premium,
2,000 high-volume business
$1,743m
1,750
Three themes to watch
CAGR = 60%
1,500
US$ million
1,250 10bn+
$922m
1,000 policies underwritten
1. Distribution and product: literally millions (if not billions) of customers. These 750 $528m
From affinity to embedded companies are always considering how to further
monetise their customer base or enhance their
500 $354m
insurance and ecosystems proposition. For example, Samsung has developed 250 486m
a health management proposition with Hannover
users
Embedded insurance was one of the first themes to Re to enable users to benefit from the data being 0
emerge in InsurTech. In 2018 we covered Qover , generated by Samsung wearables, and Intuit has 2015 2016 2017 2018 2019
Sources: Zhong An Interim Report 2020: https://bit.ly/3qX4E2d
which now covers nearly one million people through recently embedded an earthquake insurance product
partnerships with companies like Deliveroo and delivered by CoverGenius , underwritten by $0.28
Revolut, and Zego , which recently became the first Swiss Re.
Over 300 partners with Average premium
UK InsurTech “unicorn” when it raised its Series C
5 distribution ecosystems, e.g. per policy sold
round. Third, embedded insurance is often required to
enable innovation in other areas. This is the case
We are bullish on this model for three in most mobility propositions: Drover (“flexible car
Fig. 08
main reasons. subscriptions”), Outdoorsy (a “trusted motorhome
First, societal trends such as the gig and sharing
rental marketplace”) and Car & Away (“AirBnB for
your car”) only work because insurance providers
Evolution of affinity distribution to ecosystems
economies and ecommerce are creating huge take the liabilities – in these cases Munich Re, Aviva,
demand for embedded products at scale. Sometimes and QBE. Sometimes the insurance is offered
AFFINITY DIGITAL AFFINITY EMBEDDED ECOSYTEMS
these products are microscopically small, for as an ancillary sale on the platform (B2B2C) and
example the product return insurance sold by sometimes it is embedded into the proposition
Chinese insurer Zhong An which has an average (B2B). Embedded insurance could be the future Selling insurance through Selling insurance through Selling insurance that Selling insurance through
premium of $0.28. But even higher premium of motor insurance. traditional partners, e.g. partners’ digital sales channels, is embedded into other a network of digitally
products such as the insurance-backed B2B ‘buy now associations and banks e.g. white-labelled products companies’ business models interconnected entities
pay later’ product sold by Hokodo is only viable So when will ecosystems become a reality
when embedded, as distribution costs are otherwise for insurers?
too high.
In our opinion, they already have. We define
Second, embedded insurance is critical to accessing ecosystems as a “network of digitally interconnected
new customer pools. We introduced last year the entities which, through one or two way data sharing,
concept of ‘super gatekeepers’ – a new generation of conveniently provides a range of products and
companies like Samsung, cloud accounting platform services to customers, allowing each ecosystem
Intuit Quickbooks, and Apple that control access to participant to generate value they would not
2021
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Magellan™ Collection:
Embedded insurance and ecosystems
CLICK HERE TO
have been able to realise outside the ecosystem.” Fig. 09 Example Open Banking ecosystem FIND OUT MORE
Ecosystems are enabled by digital platforms which orchestrated by an insurer
allow the orchestrator to hold and share data, and
connect to the systems of ecosystem participants.
We see ecosystems as a small evolutionary step Customer
from embedded insurance. Indeed, whilst many 3 1
insurers continue to talk about ecosystems, many of
the companies mentioned in this report – and many
more – are already playing in them.
Insurer Retailer
Indeed, there are also examples of insurers playing
the role of ecosystem orchestrator – the holy grail 2
to many strategy and innovation leaders. HDI, the
German insurer, has achieved just this through its
1. Retailers can 2. Sometimes 3. The insurer
partnership with Impact 25 Member OptioPay . make bespoke the insurer offers customers
The Berlin-based scale-up provides its B2B partners offers to target has a strategic the platform
with a white label Open Banking platform. Partners customers relationship as part of the
This can even with a retailer, proposition
(in this case HDI) ask their own customers to
be SME retailers for example The customer
permission the platform to access their banking in the insurer’s an affinity or a values the
information in return for customised offers. These portfolio – turning bancassurance insurer’s
the cost of deal proposition and
can be simple retail vouchers (e.g. “10% off at
insurance into a permissions their
Amazon because you love buying gadgets”) or revenue stream The insurer can banking data
tailored offers from partners (e.g. “because you buy offer their partner Insurers can
baby milk, perhaps it’s time to access to their provide tailored
customer base to offers
buy life insurance”).
strengthen the
relationship
What does this mean for insurers?
Embedded insurance is no longer an innovation
experiment but, in our opinion, a necessary
investment to stay relevant for a large part of the
future insurance premium pool. Equally, it turns
out that ecosystems are not like teenage sex – “lots
of people talking about it, but nobody doing it” –
because, just like in life, the cool kids are already at it. distribution partners, rapid product development
often with little or no historic data for pricing,
Embedded insurance and ecosystem participation and claims settlement at unprecedented scale
require insurers to develop a whole new set of for example. Some of these are well outside the
capabilities to succeed – digital connectivity to traditional skill set of an insurer.
2021
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Fig. 10
Data maturity framework and examples of Impact 25 companies
We believe that insurers will need to develop medical device risk. Cytora uses AI to “stream
new go-to-market strategies and Munich Re’s profitable risks to your underwriters” – a workflow DESCRIPTIVE DIAGNOSTIC PREDICTIVE PRESCRIPTIVE COGNITIVE
2020 partnership with John Lewis, a large British platform that blurs the distinction between
department store, might be a window to the underwriting insight and process optimisation. What happened? Why it happened? What could happen? What should be done? How do we adapt to change?
Describe, summarise and Identify causes of trends Predict future outcomes based Recommend right or optimal Monitor, decide, and act
future.6 The reinsurer created an ‘ecosystem’ of Omni:us is helping insurers underst and claims
analyse historical data and outcomes on facts from the past and actions or decisions autonomously or semi-
capabilities by partnering with three other providers and improve the handling process. simulations of the future autonomously
to win the deal. Not only does this require a clear Many lines of business still Significant research into large risk Real time analysis of markets
based on basic GLMs classes like motor and home Modelling of US hurricanes enabling improved insight and a Still emerging
understanding of the ‘best of breed’ players around The direction of travel is from data that describes
provides highly sophisticated faster, more flexible response to
the market – something our insurance technology particular risks (“what happened?”) through to Example Percayso ’s base Pharm3r provides granular view of exposure market trends Avantia is a UK home
navigator, Magellan™ can help with – but it also better predictive insight (“what could happen?”) and module allows insurers to enrich analytics about pharmaceutical insurance MGA which prices risks
their data by tapping into third and medical device risks to Concirrus is a platform that Sophisticated exposure using a series of “live” machine
requires a new operating model whereby colleagues ultimately cognitive insight (“work it out for me”).
party sources (re)insurers allows underwriters to combine modelling provides risk limits for learning models looking at
from different parts of the business quickly ‘swarm’ their historic data with real-time different types of risk different elements of the risk,
around an opportunity. Insurers need to develop their capabilities at all levels and behavioural data to provide including anticipated market
of this maturity framework. predictive insights to marine Cytora reviews underwriting behaviour
insurers submissions and prioritises them
for underwriters based on their
2. The Underwriter of the Future: What does this mean for insurers? predicted attractiveness
Modularity and Machines Companies need to rethink how they make use of Sophistication
these new sources and techniques and succeed in
The maturity of data and analytics in insurance the digital decade. They will move from large internal
is hard to describe. Insurers have world-class databases to ecosystems of interconnected data
expertise in some areas such as motor and hurricane sources and analytics platforms. The impact will be Fig. 11
Structuring the underwriting and claims process of the future
risk modelling; in other areas such as specialty a transformation in the underwriting and claims
underwriting or casualty aggregation capabilities functions.
are still evolving. When it comes to optimising
underwriting and claims processes many corporate First, companies will need to rethink their
Underwriters should push themselves to automate
and specialty underwriters are flying on instinct. underwriting submission and claims notification
as much of the underwriting and claims process as
triage process. The level of maturity varies across
possible using data & analytics
Data and analytics has been the most popular the industry with volume lines underwriting being
category in our last four InsurTech Impact 25 reports: relatively advanced but specialty underwriting Bin/
around one quarter of Members have been in this and all claims lagging behind. For example, many
category. Many of these companies are getting real claims triage processes are still a basic queuing
traction, and some are even becoming the ‘reference system. Technologies like AI and Natural Language Triage Referral Data &
provider’ in their niches – for example CyberCube Processing can create transformational change here. analysis
for cyber risk in the US and Concirrus for marine
in the London Market. Second, companies need to automate as much
of the underwriting and claims handling process Machine
Propositions are varied. Percayso helps insurers as possible. The ambition should be a no-touch review
access third party data sources, a kind of data model across the business – recognising that for Process data, e.g. where do we have inefficient
supermarket. Pharm3r is going deep in one some risk classes or types this is likely to remain an referrals (e.g. 100% acceptance)?
industry and transforming insight into drug and unattainable goal.
Accept Performance data, e.g. where is automatic
underwriting as effective as manual investigation?
6 https://www.insurancebusinessmag.com/uk/news/home-property/john-lewis-creates-home-insurance-partnership-236504.aspx2021
11
Magellan™ Collection:
Advanced modelling and parametric insurance
For complex risks and claims the starting point
is collecting robust data about the process and
3. Private health insurance: INFORMATION PERIL & INDUSTRY ANALYTICS EFFICIENCY NEXT GENERATION
outcomes. For example: how are we applying Disruption ahead? COLLECTORS INSIGHTS PLATFORMS GENERATORS CLAIMS
discounts, how does our conversion rate vary
depending on which policy sections are included; Commentary about insurance innovation and
where are our claims handling costs high? InsurTech frequently uses the word disruption. We
Companies like Optalitix help in this area by have always argued that this is overused and have
moving the underwriting and pricing process from pointed out in previous articles that the insurance
Excel spreadsheets to web-based models, allowing a industry has some formidable barriers to disruption.
wide range of data to be collected for future analysis. These include the fact that customers buy insurance
reluctantly only once a year, and that the industry is
Over time this should lead to a higher rate of unique in always requiring an institutional balance
automation. This will bring with it a shift of power sheet to sit behind any product.
from experienced underwriters or claims handlers
to data-driven portfolio managers and technologists. But the private health insurance market is different
And rightly so – it is surprising how many – largely because private health insurance is (in
underwriters and claims handlers have escalation Europe, at least) not really an insurance product
processes with near 100% acceptance rates – the sort so much as a voluntary financing solution for a
of finding where a data-driven manager will quickly premium service. The product is not compulsory and
spot and eliminate. uninsured people can generally access treatment via
public systems.
Finally, insurers need to determine which capabilities
they build in-house and what they outsource. For Insurers therefore need to prove value through pharm3r
example, data-driven MGAs are well placed to their propositions. Historically they have invested in
develop underwriting and claims processes in niches everything from hospitals to local dental practices,
requiring only portfolio oversight by the carrier. but digital trends broaden the opportunities open to
Hokodo allows merchants to offer a ‘buy now – them.
pay later’ payment terms to SMEs. It conducts its
own credit risk assessment and is backed by a credit Covid has been a genuine catalyst of lasting change.
insurance policy from SCOR. Flock develops Most obviously, insurers have had to accelerate
rating schemes for novel risk classes and is currently their adoption of telemedicine during the pandemic.
focused on drone and fleet risk. This has quickly gone from peripheral proposition
to the primary access route for consultations for CLICK HERE TO
Whilst delegating underwriting is nothing new to the many people: in the UK, 75% of general practice FIND OUT MORE
market, the landscape is evolving fast and insurers consultations were done remotely at the peak of
are faced with a complex array of decisions to the pandemic.7 In the US consumer adoption of
become the underwriters of the future. telemedicine shot up from 11% in 2019 to 46% in
May 2020.8
7Royal College of General Practitioners
8 https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/telehealth-a-quarter-trillion-dollar-post-covid-19-reality2021
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Magellan™ Collection: Health CLICK HERE TO
FIND OUT MORE
The Impact 25 reports have focused on tech-led businesses whose primary
But what is telemedicine? A broader definition might What does this mean for insurers?
focus is insurance. Many other relevant businesses can be found in Magellan™.
include preventative propositions. Mental health A market in flux, with untapped technological and
is topical and being addressed by apps such as data opportunities, and well-funded players with
Headspace and Calm which had a combined 2019 customer access is ripe for change, perhaps even
RISK ANALYSIS PROPOSITIONS DIGITAL PROVIDERS
revenue of US$250m.9 Whilst insurers must innovate disruption. Executives in this market should feel the
their propositions, they are competing against many classic capitalist emotions of both fear and greed.
big beasts with narrow focuses. What is the role of The opportunity is huge, especially post-Covid. pharm3r
the insurer in prevention? Populations are engaged with their health and,
almost uniquely in insurance, are prepared to
Diagnostics are also developing fast. For example, engage with their insurer for the right rewards
some blood tests can now be conducted by as Vitality has demonstrated. Public systems
individuals at home with cheap single-use kits. will feel the strain for years in many countries.
Insurers must establish whether their customers
want to interact with their healthcare provider in
Fig. 12
But equally the threat is huge too. Digital
person or remotely – a new layer of complexity – and
deliver tailored propositions. How is the difference in
players like telemedicine could bundle an
insurance product into their offering which they
Example health insurance ecosystem
the cost to serve treated in pricing? The complexity source directly from the reinsurance market.
quickly builds up. Amazon could completely transform the drugs
supply chain. A leading insurer or MGA could Corporate
Finally, data provides huge opportunities for find transformational insight in better use Reinsurers Schemes
innovation in the health market. HumanAP of data and outperform in terms of both
aggregates US consumers’ health data from growth and profitability. Last year we profiled
thousands of sources and allows them to permission Dansk Sundhedssikring , a Danish data-driven
insurers to access this data. This avoids the hassle health insurance MGA, which became the market
of long questionnaires and allows (re)insurers to leader in under ten years and also claims the
increase their rate of digital underwriting. Queath lowest loss ratio in the market. Government Wellness
has a partnership with RGA to help integrate lifestyle Solutions Providers
factors into health underwriting. Executives must take a broad view of their Customer
marketplace – which goes much beyond the confines
We think this market will radically evolve in the of insurance – and develop hypotheses about how
digital decade. it will evolve over the next decade. They must then
make complex decisions concerning their distribution,
proposition, technology, operations and supply chain.
Healthcare Private Medical
Providers Insurers
Data
Providers
9https://www.businessofapps.com/data/calm-statistics/2021
13
Three imperatives for
executives in the digital decade
1. Being data-led is table stakes The distinction between what is a department and
what is a project must disappear. Companies must
Digital and data are often mentioned in the
create the ability to ‘swarm’ around promising
same breath, and often interchangeably. This is
opportunities, which implies having an effective
unfortunate because they are two distinct topics.
process for identifying and triaging them in the
Without a robust data foundation, digitalisation
first place. For short-term opportunities the
Find the tech vendors your market scan
cannot occur.
established concept of “popup teams” or
“multi-functional teams” might be sufficient; for
Most insurers still have a long way to go to become
missed with Oxbow Partners Curated Search
longer-term opportunities companies must be
truly data-led. All too often we still hear executive
willing to commit funding to a larger team for a
discussions being supported by anecdotal evidence
reasonable amount of time.
or disputed data. Most companies still require
finance teams to conduct bespoke analysis to
understand drivers of value such as retention by
segment or cohort, or margin by channel. 3. Think of technology vendors as
Data needs to be at the heart of the organisation,
culturally and operationally. Meetings must be
accelerators and enhancers in any
function, not just innovation
UNDERSTAND DISCOVER ASSESS
supported by dashboards with real data.
InsurTech has been met with both scepticism
Every search opens Our team analyses our Get access to full profiles
and enthusiasm by industry executives. We have
always had a balanced view; InsurTech will not with a call to precisely proprietary data to create for each shortlisted
2. Traditional operating model turn the insurance industry on its head, but it
understand your tech your bespoke shortlist of vendor, powered by our
structures must be broken down could fundamentally change the fortunes of any
one company. needs and goals suitable companies Magellan platform
Opportunities will present themselves in the “digital
decade” that no longer fall neatly into the structures Industry executives should consider how
of a traditional insurance company. Partner InsurTech could accelerate and enhance their
distribution deals no longer require just a tweak of corporate objectives and pick ‘best of breed’
the product and a negotiation of the commission. partners where possible. This is true not only Whether you’re running a policy admin system selection, looking for a new source of UW data, or conducting an
Perhaps an entirely new product needs to be for innovation projects, but also for back office
developed for which there is no historic claims activities such as regulatory compliance.
InsurTech landscape review, a Magellan Curated Search finds you the best solutions for your needs. TELL ME
data, perhaps partners are required to deliver To find out more go to oxbowpartners.com/magellan or get in touch at magellan@oxbowpartners.com MORE
some of the capability.2021
14
Fig. 14
Number of companies as a percentage of the total in Magellan™
DISTRIBUTION, DATA & OPERATIONS
UNDERWRITING POLICY ADMIN ANALYTICS & CLAIMS
Insights from Magellan™, our
& PRICING
insurance technology navigator P&C – 576 17% 10% 42% 31%
L&H – 212 44% 9% 31% 16%
Magellan™, Oxbow Partners’ insurance technology
navigator, is designed to help insurance executives
Fig. 13 Class of business targeted
and investors find suitable vendors in a highly
fragmented and complex landscape. 2% TOTAL* – 2,000+ 27% 13% 31% 29%
Our platform contains in-depth information *Total company count includes vendors that
about more than 2,000 insurance technology have solutions across classes < 20% 20-30% 30% + Source: Magellan™
11%
vendors. These span startups through to
established companies, distributors as well as
service providers, and draws companies from Fig. 15
17%
Share of vendors that are distributors vs suppliers split by year founded
64 countries. We believe that our data is some
of the deepest available in the market. 46%
Almost half of the vendors on Magellan™ have
100%
built solutions and products for the Property 24% 90%
& Casualty market specifically. This dominant
share is expected given Willis Towers Watson’s 80%
InsurTech investment data and the activity we
70%
observe in the market. Vendors in this category
are a near-even split between suppliers (55%) 60%
and distributors (45%), but there is a strong Property & Casualty Across all classes
skew to North America. 50%
Life & Health Property & Casualty and Specialty
40%
Whilst Life & Health represents just 17% of Specialty
Magellan™ vendors, it has seen a large uptake 30%
in recent years. 63% of all L&H vendors on
Magellan™ have been founded since 2015,
20%
10%
Our platform contains in-depth information about more 0
than 2,000 insurance technology vendors. We believe that 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
our data is some of the deepest available in the market. Supplier Distributors Source: Magellan™2021
16
15
Fig. 16
Average investment raised and FTE of members when selected
£20m 76
£18m
Whilst 64% of all Magellan™ vendors are suppliers, distributors £16m 59
£14m 54
have slowly been increasing their share, representing 47% of all
£12m
Magellan™ vendors founded in 2020 43
£10m
£18m
£8m £16m
possibly encouraged by the growth in wellness 2021 is the fourth edition of the Oxbow Partners
£6m
and rehabilitation propositions. Having been Impact 25, and in this edition we welcome our
dominated by P&C, L&H now represents 32% of hundredth member. As figure 16 shows, the average £4m £8m £9m
global InsurTech funding and we have argued in this total investment raised for each member has been
£2m
report that health could be the next big frontier for rising since the first edition showing how the market
insurance innovation. is maturing. In 2021 our members have on average 0
received £18m in funding, more than double the 2018 2019 2020 2021
Across all classes, Data & Analytics is the dominant average of £8m in 2018.
Average investment raised Average FTE
primary function amongst Magellan™ vendors, which
is no surprise given that it provides (re)insurers the Readers of this report can see information about this
basis for understanding their current and future year’s and previous years’ Impact 25 Members on
customers. P&C vendors on Magellan™ are also Magellan™ by clicking on the plus symbols next to
heavily focused on Operations & Claims. Magellan™
Fig. 17
the company names, throughout this report.
L&H vendors instead have a greater concentration on
Distribution, Underwriting and Pricing.
Impact 25 Members by revenue brands when selected
4% 4% 6%
Whilst 64% of all Magellan™ vendors are suppliers, 100%
distributors have slowly been increasing their share, 9%
90% 9% 17%
representing 47% of all Magellan™ vendors founded 18%
in 2020. 80%
35%
70%
43%
60% 35%
50% 47%
40%
30% 57%
20% 43% 43%
29%
10%
0
2018 2019 2020 2021
£100k – £1m £1m – £5m £5m – £10m £10m+2021
16
Fig. 18
Mapping of InsurTech Impact 25 2021 companies based on
part of value chain and class of insurance addressed
The InsurTech Impact 25 DISTRIBUTION PRODUCT DATA & ANALYTICS OPERATIONS
Along with our Advisory Board, we spent six months These players are at different levels of maturity
reviewing over 150 companies to select this year’s but we are excited about all of them. Some have
Impact 25 Members. Members span the value highly ‘visible’ propositions, whilst others are
chain and cover non-life, health and life insurance, deeply technical. All have the potential to drive
personal lines and commercial. We believe that our significant value in the industry.
rigorous review process – along with the fact that P&C
there is no direct or indirect fee for Membership – Detailed profiles are provided in the next section as RETAIL
distinguishes the InsurTech Impact 25 from other well as on Magellan™ .
InsurTech lists.
We have deliberately chosen companies at different
stages of their life and some have proven business
models whilst others are still exploring.
A note on the selection of Members P&C
COMMERCIAL
As the InsurTech landscape and revenue growth, business from insurance clients in 2021
matures, we hope to move to model and strategy, clients and • The company should not
an objective measure such as investors. A high weighting was have a single, large corporate
a measure of traction on our placed on revenue and the small shareholder with more than
Magellan™ platform. However, number of Members who did not 50% of its shares
we do not feel like this is the best disclose it had to meet a much
selection criterion at present: higher bar on the other criteria The objective of our report is
should we favour a company with than companies that did. to highlight companies that LIFE &
£1m of revenue and 1,000% y-o-y have traction and potential HEALTH
growth or a company with £5m To be eligible as a Member, for incumbents, but are not
of revenue and 300% growth? companies needed to meet most household names. We also
Who is performing better: a of the following criteria: seek to get a broad spread of
Distribution InsurTech with • A proposition that is businesses, covering all elements
100,000 £10 policies or a Supplier technology-led and somehow of the value chain, customer
InsurTech with two £500k clients? innovative types and products. There is no ALL
Instead, we have assessed eligible • Min £100k annual revenue from fee or other financial incentive
companies based on detailed insurance clients in 2020 for Membership: all Members are
submissions covering revenue • Max £20m forecast revenue selected on their own merits.2021
17
What has happened to Atidot is a cloud-based provider of AI, machine
learning, and predictive analytics for life insurers
Bought By Many creates and distributes insurance
policies designed around customer needs
previous years’ Members? Grew its customer base significantly, including industry leaders,
Pacific Life and Guardian Life
Expanding its partnerships with Unqork, Sapiens, Infosys, and
Doubled the number of pets insured to over 300,000 while
maintaining average review score of 4.7 out of 5
Recruited 100 people since March 2020
Atos strengthening its EU presence
Broker Insights combines broker customer data and
360Globalnet helps insurers deliver an optimal
Avantia is a UK-based non-standard home insurer risk appetite data to better connect insurers
claims experience
insurance MGA and brokers
Helped several new major clients respond to lockdown by
Used its Cortex machine learning platform to start pricing risk, Grew revenues by 100% in 2020 as platform and capability
deploying state of the art digital claims processes
increasing EBITDA by more than 40% and base revenue by c.20% gained traction with business partners in second year of trading
Partnered with HUGHUB to deliver full end-to-end policy
Will integrate Cortex into its freshly insourced claims operation to £1bn of commercial GWP visible in the platform during 2021 with
administration capability
enable instant claims decisioning additional products and services also being launched
Akur8 is transforming insurance pricing with bsurance enables companies to embed insurance
battleface uses experience, innovation, data science
Transparent AI, automating the rating process products into their point of sale
and technology to create the first end-to-end global
while retaining control over the models created
travel insurance platform Raised a convertible finance round in the middle of the covid-19
Increased its revenues 5x by signing over 20 clients globally crisis, giving them room for expansion right after the reopening
battleface raised US$12m in a Series A Round with Drive Capital
Raising a Series B round in H2 2021 to sustain to fund growth, invest in market expansion and establish global Continued growth in 2021
geographicalexpansion and product development HQ in Columbus, Ohio
Launching global products for travellers worldwide through its
digital distribution platform and new partnerships
Cape Analytics uses advanced computer vision to
analyse geospatial imagery at scale and identify
property features that are predictive of loss
Anorak enables financial services companies to Bdeo is a visual intelligence InsurTech active in Grew to over 40 customers in production
offer personalised life insurance advice and product central and southern Europe and Latin America Proprietary geospatial property attributes such as Roof Condition
recommendations
Grew its customer base up to 35 insurers in 20 different Rating have been filed and approved for rate in 15 states
Grew its revenue 5x by the integration of new distribution countries, tripling its revenue in 2020
partners such as Clearscore, Snoop and Trussle
Expanding to the main European markets with local sales team
Doubled the team size in 2020 with an accelerated hiring plan after having closed a €5m round of funding in 2020
in 2021 Carpe Data unlocks automation and drives
operational efficiency across the policy lifecycle
through unique and predictive data
Bikmo is a digital insurance broker for European Launched the Minerva business data suite, which now provides
artificialOS is a platform of modular applications cyclists and adventure sports enthusiasts small commercial insurers like The Hartford and Farmers with
that empower brokers and insurers to quote, bind advanced classification, risk characteristics, and predictive scores
Grew new customers by 90% in European territories following the
and issue policies Series A investment round of £1.8m in May 2020 for more than 40 million business records across the US
Onboarded several new clients onto the artificialOS platform Expanding their consumer-focused technology platform ready for Garnered industry-wide recognition for technology
Developing solutions for commercial insurers, brokers and MGAs commercial launch in late 2021 and leadership2021
18
Concirrus’ Quest platform provides proprietary DIG helps insurers and banks to build digital FINABRO is the distribution platform for
behavioural data and predictive models for insurance propositions, either independently of occupational pension
underwriting legacy systems or on top of them Started collaborations with 4 of Austria’s top 5 insurances
Raised a Series B round in H1 2020 to fund expansion into new Launched a Life & Health insurance wellbeing ecosystem (Allianz, Zurich, Vienna Insurance Group, UNIQA) and Austria’s
product lines and geographies together with a top-3 US insurer and Vitality top broker (GrECo)
Expanded commercial offering into Europe, US and Asia Pacific Launched a fully digital bancassurance solution for a Deutsche Entered the German market
Bank subsidiary including a data-driven advisory tool
CyberCube provides analytics to (re)insurers to Flock helps insurers instantly understand and
understand and manage the cyber threat landscape DQPro helps specialty insurers to monitor, control insure against specialty risks, such as drone cover,
Developed its suite of products including the launch of Broking
and improve their data in real-time
Manager to provide deeper insights on cyber risk transfers Increased revenue by 40% with both new and existing customers Launched its commercial motor division using real-time data to
Developed its suite of products including the launch of Broking and enjoyed 100% customer retention accurately insure fleets of connected vehicles
Manager to provide deeper insights on cyber risk transfers Launched DQPro Market Standard for data confidence, Grew revenues by 5x in 2020 and is raising a Series A to fuel rapid
collaborating with 10 global specialty carriers global expansion
Cytora transforms commercial insurance to improve
underwriting productivity, reduce frictional costs and ELEMENT is a ‘full-stack’ InsurTech distributing FloodFlash uses computer models and IoT tech
drive strategy-aligned growth through partners to bring parametric catastrophe insurance to the
Launched Underwriting Productivity Suite Increased from 12 to 19 product lines with c.25 partners mass market
Growing customer base of commercial insurers focused on Emphasising pet protection, bike insurance and leasing covers Paid its fastest claim ever with just 9 hours and 44 mins between
digitising risk and closing the gap between underwriting strategy the flood and the full payout
and execution Expanded its distribution network to include partnerships with
Marsh, Aon, Willis, Lockton and Gallagher
Energetic Insurance has developed a first-of-its-
kind credit insurance product for the renewable
Dansk Sundhedssikring is a data-driven Danish health energy sector
insurance MGA Maintained 0% loss ratio in 2020 with no claims despite multiple
FRISS is an AI-powered solution for P&C insurers to
Entered Swedish market small business lockdowns detect and prevent fraud
Raising a Series A round in H2 2021 to fund expansion into new Realised 58% revenue growth
project structures and geographies 16 new carriers added to the FRISS family
Descartes Underwriting builds innovative parametric
insurance products for extreme weather events and
natural catastrophes Enterprise Bot provides multilingual chatbots Getsafe allows European millennials to purchase and
Raised US$18.5m Series A round with support from Serena, Revolutionised the AI industry with the launch of an end-to-end manage insurance on their smartphones
Cathay Innovation, and Blackfin Capital Partners Hyperautomtion platform Secured a US$30m funding round led by Swiss Re, making it one
Launching offices in the US and APAC to foster collaboration with Crossed US$2m ARR of Europe’s best funded insurance startups
brokers and clients internationally Expanding to another European market besides the UK2021
19
Global AI-driven insurance, trust and safety INSTANDA is a digital end-to end insurance platform McKenzie Intelligence Services provides time-critical
marketplace for the short-term rentals sector enabling clients to design, build and distribute any geospatial intelligence for claims and exposure
Expanded to 12 new markets including the US, Canada, South type of insurance product to multiple audiences management and validation
Africa and Israel Launched first cyber insurance product with Standard Bank Completed the £2m European Space Agency backed Global
Exploring raising a Series A round in H2 2021 (South Africa) within weeks Events Observer, an exposure and claims management system
Global launch of digital group health and digital claims by for insurers
Q2 2021 Added 53 new insurers and scaled the business to accommodate
clients in Asia Pacific, Latin America and North America;
Hokodo modernises the B2B payment experience currently fundraising
and enables merchants to extend credit terms to
their business customers instantly KASKO allows insurers to design, distribute, manage
Launched Trade Credit as a Service solution and expanded and scale digital insurance products
Metabiota provides analytics tools and advisory
European footprint, partnering with 9 clients including German Continued its client growth to now over 40 insurers on more than
Bank Sparkasse Bremen, marketplaces ManoMano, Ankorstore
solutions to mitigate and transfer epidemic risk
100 products, with over 290k policies bound over the platform
and Hectare Will soon engage with investors for its Series A funding round Won catastrophe risk modelling solution of the year from
Raising a Series A in 2021 to fund growth into the rest of the Insurance ERM and selected for Lloyd’s Lab to support the
EU and continue developing the next generation of B2B response to COVID-19 and future pandemics
payment solutions Fundraising to meet market demand and build a new early
Konsileo is a technology-driven broker focused on the warning surveillance system for pandemics
UK SME market
Grew premium by 174%, doubled clients and increased premium
hx has developed a platform for insurers to build and
per client by 62% during 2020 whilst adding advisors through OnSiteIQ provides 360° photo documentation
deploy web-hosted pricing models
lockdown
services to property owners and developers
Tripled revenue again, signing some of the largest insurers in Continuing growth in 2021 and raising a Series A round mid-year
the world as well as some of the ‘Class of 2020’ Grew its revenues by threefold in 2020 in the US and expanded
Seeking InsurTech partners to join its growing Renew to Canada
Connect ecosystem Trained the AI engine on over 50 objects with 91% confidence
Kovrr enables insurers to understand, quantify and level across the board
manage cyber risk
Grew its revenues by more than 400%
Inforcehub enables scalable customer activity for
insurers to support growth and retention of the Offering clients the ability to independently adjust simulation ottonova is a German ‘full stack’ digital private
parameters to quickly validate their loss assumptions health insurer
existing customer base, using a combination of
advanced analytics and a platform of dedicated Grew its number of clients significantly despite the pandemic
technology solutions Will focus on expanding partnerships throughout the market
Embedded core solutions with key clients, creating client and Laka is a ‘digital mutual’ that provides collective-led
commercial value from campaigns using our CAFE software insurance with a focus on personal mobility
Drive the growth of a new AI-driven IDP proposition for insurance Secured a European license and launched in The Netherlands Pharm3r is an AI-driven risk assessment company
pharm3r
customer process optimisation beyond robotics Expanded from bike enthusiasts to serve the wider personal
Continued its high double-digit growth for the sixth straight year
mobility segment
New clients include CNA, asset managers and law firms; new
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