As the Head of Research & Partner Management of Startupbootcamp InsurTech, for over six months I scouted the world for startups. The objective of my scouting was to find good fits for our Startupbootcamp InsurTech program in London. We specifically looked for startups which could solve one or more of our corporate partners’ pain points.
In addition, I met dozens of investors, mentors, and experts within the insurance industry during this global scouting.
Having made so many touchpoints and considering what I’ve seen in 2016, especially within our 2017 cohort, I’ve compiled a list of 10 trends to watch in the second half of 2017.
If you’re curious to see how entrepreneurs are changing financial services and the insurance industry, we welcome you to our Demo Day on 26th of April in London.
Non-traditional startups entering the InsurTech space
More often, I’m meeting startups who are not coming from within the insurance space, and this is going to continue to grow. The insurance industry is worth upwards of $5 trillion, and startups are beginning to understand how they can use their tech, business model, etc., look through an insurance lens, and apply their solution to the insurance industry.
These new players are realizing that they have great solutions for the insurance market. The advantages of these startups are:
Capabilities: in most cases, these startups have already validated their proposition, and they have a customer base, data, and business cases that can be leveraged.
Stage: these startups probably already have a fully-operating product or service and are generating revenue, which could be crucial for traction when they decided to pivot into the insurance space.
The reasons for these startups to enter into a highly-regulated market:
Investment: as highlighted from recent research made by CB Insights, “deals to insurance tech startups rose 42% on a year-over-year basis in 2016”. These investments are certainly attracting the startups who view this old industry as a new target market.
Focus: is, arguably, shifting from the oversaturated FinTech, to the slower-moving InsurTech and the emerging technologies that can put a dent in this space and, therefore, creating many opportunities for these entrepreneurial minds.
What we’re seeing in Startupbootcamp InsurTech Class of 2017 and in our scouting efforts:
Evolution of the P2P model
During my scouting, I met with various P2P solutions. Some of them they were focusing just on the distribution model, others were trying to differentiate by exploring new models and ways of thinking.
Apart from examples like Lemonade and Friendsurance, we still need to see a real P2P model succeed. And as highlighted in this brilliant article by Rick Huckstep, “So far, no business model has come forward and defined what P2P Insurance is. However, they all have one thing in common, which is to redefine trust in the relationship between insured and insurer.”
This is absolutely a space to watch. Collaborative consumption is empowering consumers to take action and look for better solutions to problems (transportation, travel, housing, etc.), rather than looking to and waiting for governments and corporations to take action. There is a sense of creativity in collaborative consumption/sharing economy solutions, and startups embody this creativity.
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