{"id":1424,"date":"2020-01-02T15:57:34","date_gmt":"2020-01-02T20:57:34","guid":{"rendered":"http:\/\/insurtechadvisors.com\/?p=1424"},"modified":"2020-01-02T16:02:25","modified_gmt":"2020-01-02T21:02:25","slug":"2019-insurtech-in-review","status":"publish","type":"post","link":"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/","title":{"rendered":"2019: Insurtech in Review"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Happy \u201c<a href=\"https:\/\/en.wikipedia.org\/wiki\/National_Science_Fiction_Day\">National Science Fiction Day<\/a>\u201d to all of you that enjoy reading a great SciFi book or had a chance to see the latest Star Wars entrant.&nbsp; I hope you had a great holiday season with family and friends.&nbsp; As I reflect on 2019, I\u2019ve been blessed to work and interact with amazing people like yourself.&nbsp; I am forever grateful for this.&nbsp;&nbsp;<strong>Here\u2019s to the next year and decade together<\/strong>.&nbsp; May it be filled with only great things, health, success, and happiness for you and your family.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e94c20162b9\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e94c20162b9\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#2019_Insurtechs_take_hold_but_will_they_hold\" >2019:&nbsp; Insurtechs take hold (but will they hold?)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#Personal_Auto\" >Personal Auto<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#Renters_and_Home\" >Renters and Home<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#Small_Commercial\" >Small Commercial<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#A_Natural_and_low_Ceiling\" >A Natural (and low) Ceiling<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/#2020_To_Enable_or_Not\" >2020: To Enable or Not?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2019_Insurtechs_take_hold_but_will_they_hold\"><\/span><strong>2019:&nbsp; Insurtechs take hold (but will they hold?)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In last year\u2019s email, I started off with the fact the&nbsp;<a href=\"https:\/\/www.everquote.com\/\">Everquote<\/a>&nbsp;had gone public in 2018 and was down 80% since its IPO.&nbsp; What a difference a year makes.&nbsp; As of the end of 2019, Everquote was up 700% YTD.&nbsp; Too bad I didn\u2019t invest Jan 1<sup>st<\/sup>&nbsp;2019!&nbsp; They are just one example of where Insurtechs and start-ups have started to gain traction.<\/p>\n\n\n\n<figure><iframe width=\"500\" height=\"281\" data-src=\"https:\/\/www.youtube.com\/embed\/MeLCuIZ9bLg?feature=oembed\" allowfullscreen=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" data-load-mode=\"1\"><\/iframe><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Personal_Auto\"><\/span><strong>Personal Auto<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s much easier to track the growth of the Insurtechs within the personal auto sector.&nbsp; Four Insurtechs:&nbsp;<a href=\"https:\/\/www.metromile.com\/\">Metromile<\/a>,&nbsp;<a href=\"https:\/\/www.joinroot.com\/\">Root<\/a>,&nbsp;<a href=\"https:\/\/clearcover.com\/\">Clearcover<\/a>, and&nbsp;<a href=\"https:\/\/www.noblr.com\/\">Noblr<\/a>&nbsp;have collectively raised $875M and they have created traditional full-stack insurance carriers as compared to acting as an MGA.&nbsp; Thru the 3<sup>rd<\/sup>&nbsp;quarter in 2019, they had written over $450M in combined premium.&nbsp; Root itself, in 2018, was the 107<sup>th<\/sup>&nbsp;largest private auto writer in the country.&nbsp; Not bad for a few years in business!&nbsp; One entrant,&nbsp;<a href=\"https:\/\/hiroad.com\/\">HiRoad<\/a>&nbsp;which was founded by Statefarm and only writes in Rhode Island has written just under $20M in their first year.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>An interesting fact: in 2018, HiRoad wrote $12M in coverage while their parent Statefarm only wrote $18M in Rhode Island<\/p><\/blockquote>\n\n\n\n<p class=\"wp-block-paragraph\">While these carriers have seen significant premium growth, they all struggle when looking at their combined ratio (and especially their loss ratio).&nbsp; I found it ironic that HiRoad had the highest combined ratio, given its roots in Statefarm.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/coverager.com\/wp-content\/uploads\/2020\/01\/auto.jpg\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Renters_and_Home\"><\/span><strong>Renters and Home<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In the&nbsp;<strong>Renters\/Home-owner space<\/strong>,&nbsp;<a href=\"https:\/\/www.lemonade.com\/\">Lemonade<\/a>&nbsp;wrote $97M in premium in the first 9 months of 2019.&nbsp;&nbsp;<a href=\"https:\/\/myhippo.com\/\">Hippo Insurance<\/a>&nbsp;(which is an MGA and doesn\u2019t report directly) wrote close to $170M in premium.&nbsp; Lemonade has certainly tamed their loss ratio however; they are still just above a 100 combined ratio.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another niche Insurtech is&nbsp;<a href=\"https:\/\/typtap.com\/\">TypTap<\/a>&nbsp;which sells flood insurance online.&nbsp; In the first 9 months of 2019, they wrote about $37M in premium with a combined ratio of 96%.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Small_Commercial\"><\/span><strong>Small Commercial<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">In the&nbsp;<strong>small commercial space<\/strong>,&nbsp;<a href=\"https:\/\/www.next-insurance.com\/\">Next Insurance<\/a>&nbsp;continues to expand and has formally created a full-stack insurance carrier.&nbsp; While it has only reported $1k in premium through 3Q19, they have probably written over $40M YTD.&nbsp;&nbsp;<a href=\"https:\/\/www.intrepiddirect.com\/\">Intrepid Insurance<\/a>&nbsp;(which is part of WR Berkley) is a startup focused on selling directly to niche small business categories such as franchises and auto repair shops.&nbsp; They have written $13.7M through 3Q19.&nbsp;&nbsp;<a href=\"https:\/\/pieinsurance.com\/\">Pie Insurance<\/a>, which sells workers compensation insurance online as written about $27 (through Sirius America Insurance).&nbsp; This doesn\u2019t include the likes of&nbsp;<a href=\"https:\/\/www.hiscox.com\/small-business-insurance-lp\">Hiscox<\/a>,&nbsp;<a href=\"https:\/\/www.biberk.com\/\">biBerk<\/a>, and&nbsp;<a href=\"https:\/\/www.chubbsmallbusiness.com\/\">Chubb\u2019s<\/a>&nbsp;small business marketplace to name a few of the legacy carriers upping their focus on small business.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/coverager.com\/wp-content\/uploads\/2020\/01\/PLSC.jpg\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Natural_and_low_Ceiling\"><\/span><strong>A Natural (and low) Ceiling<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">We all read and followed the collapse of the WeWork dream.&nbsp; It was a dream.&nbsp; Billions of dollars poured in with little evidence of a workable business model.&nbsp; The Insurtech world suffered much of the same.&nbsp; Many companies were funded without a clear vision for profitability.&nbsp;&nbsp;<a href=\"https:\/\/coverager.com\/inactive-in-review\/\">Coverager<\/a>&nbsp;just published a report on ~175 of these inactive startups.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Will this change.&nbsp; Not a chance.&nbsp; There is too much investable money out there.&nbsp; With T-bills at historic lows and some European countries with negative interest rates, Investors are chasing any potential return.&nbsp; What will change though is the exit strategy for the Insurtechs.&nbsp; They will have to have a profitable product or provide something of value to a Carrier (who would then acquire them).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Another barrier to growth is brand recognition.&nbsp; Whether you are B2B or B2C, you need brand recognition to grow.&nbsp; For the Insurtech carriers (and MGAs) to truly grow they will have to start to spend advertising dollars that most likely exceed their raised capital.&nbsp; The top 10 Insurance advertisers spend just under $5B annually.&nbsp; Will Hippo, Lemonade, or Next spend 10s of millions on advertising?&nbsp; Unlikely, but it\u2019s anyone\u2019s guess.&nbsp; WeWork did some crazy illogical things.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/coverager.com\/wp-content\/uploads\/2020\/01\/top-insurance-advertisers-small.png\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Source AdAge 2019<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"2020_To_Enable_or_Not\"><\/span><strong>2020: To Enable or Not?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Perhaps the area that I see of greatest potential is around Insurtechs providing a service to the legacy Carrier community.&nbsp; Rather than treat Insurtechs as just a&nbsp;<strong>new type of vendor<\/strong>, successful Carriers&nbsp;<strong>collaborate<\/strong>&nbsp;with or even acquire the Insurtechs.&nbsp; This allows the legacy carrier to quickly benefit from the entrepreneurial culture and technical creativity of Insurtechs, while the founders at the Insurtechs benefit from the industry\u2019s market expertise, capital, and brand recognition.&nbsp;&nbsp;<strong>It\u2019s a win-win!<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">We surveyed Insurance Carrier CEOs this past summer as to what Insurtech areas they were exploring, and what POCs they ran and what was successful.&nbsp; The highlights are below.&nbsp; If you want to learn more, please reach out!<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/coverager.com\/wp-content\/uploads\/2020\/01\/highlights.png\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" data-src=\"https:\/\/coverager.com\/wp-content\/uploads\/2020\/01\/top3.png\" alt=\"\" src=\"data:image\/svg+xml;base64,PHN2ZyB3aWR0aD0iMSIgaGVpZ2h0PSIxIiB4bWxucz0iaHR0cDovL3d3dy53My5vcmcvMjAwMC9zdmciPjwvc3ZnPg==\" class=\"lazyload\" \/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">There are plenty of enabling Insurtechs to discuss, but I\u2019ll leave that for another post.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Happy New Years and I very much look forward to staying in touch.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/insurtechadvisors.com\/old\/\"><strong>About Insurtech Advisors<\/strong><\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Insurtech Advisors is dedicated to helping regional insurance carriers plan for the future today.&nbsp; We help you identify and partner with Insurtechs.&nbsp; This enables you to thrive and continue to meet the needs of your members, employees, and independent agents.<\/p>\n","protected":false},"excerpt":{"rendered":"<p class=\"card-text\">Happy \u201cNational Science Fiction Day\u201d to all of you that enjoy reading a great SciFi book or had a chance to see the latest Star Wars entrant.&nbsp; I hope you had a great holiday season with family and friends.&nbsp; As I reflect on 2019, I\u2019ve been blessed to work and interact with amazing people like [&#8230;]<\/p>\n<p class=\"m-0\"><a class=\"btn btn-outline-secondary btn-read-more\" href=\"https:\/\/insurtechadvisors.com\/old\/2020\/01\/02\/2019-insurtech-in-review\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","content-type":"","wds_primary_category":0,"footnotes":""},"categories":[1],"tags":[57,59,15,60,58],"class_list":["post-1424","post","type-post","status-publish","format-standard","hentry","category-uncategorized","tag-auto","tag-home","tag-insurtech","tag-renters","tag-small-business"],"_links":{"self":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts\/1424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/comments?post=1424"}],"version-history":[{"count":0,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/posts\/1424\/revisions"}],"wp:attachment":[{"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/media?parent=1424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/categories?post=1424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurtechadvisors.com\/old\/wp-json\/wp\/v2\/tags?post=1424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}