The world of insurance tech – or ‘InsurTech’ – entered a flurry of excitement this week as British firm Simply Business, which provides online insurance for small and medium-sized businesses, announced it was set to be acquired by US giant Travelers for £400m – more than three times the sum it sold for last year.
Founded in 2005, the firm sells insurance to hairdressers, handymen, and other small traders. It is one of many InsurTech firms that is said to pose a threat of ‘digital disruption’ to bigger, more-established companies.
Indeed, Tuesday’s purchase was seen by some in the insurance industry as a sign of nervousness among larger firms, with better-established outfits like Travelers keen to jump on the rising InsureTech bandwagon.
Here are five other UK tech firms innovating in insurance:
The number of hours we spend driving in the UK is declining year-on-year, but many car insurance firms still rely on long-term agreements, where drivers are expected to sign up for months or even years of coverage. This system is particularly inconvenient for young people, who are shunning the drivers’ seat as insurance premiums rocket.
Enter disruptive firms like Cuvva: founded in Edinburgh by tech entrepreneur Freddy Macnamara, the app offers pay-as-you-go car insurance by the hour, and is particularly targeted at those who rack up fewer than 4,000 miles per year. Cuvva has raised around £2m in investment since its 2014 launch, including a £1.5m sum from London-based venture capital firm Local Globe earlier this year.
When insurance firm Admiral was forced to abandon its plans to analyse customers’ Facebook posts – and set prices based on their personalities – concerns were raised over privacy and data protection, with a privacy lawyer describing the affair as a “tip of a very large iceberg that [insurance] consumers and businesses are increasingly going to encounter”.
The principle of using a customer’s social media activity in insurance was not killed entirely, however. Oxford-founded Digital Fineprint uses machine learning to recommend insurance packages to its users based on their social media data. The service – created in 2015 by students at Oxford University’s Saïd Business School – won ‘Best General Startup’ at the 2015 Grad Factor Awards, and has raised around £400,000 in Seed funding.
Back Me Up
In the world of Snapchat, Uber, and instant information, many twenty-somethings baulk at the prospect of long forms, laden with confusing small-print, that are still often required by longer-established insurance services. That’s why UK insurance firm Ageas launched its ‘Back Me Up’ app in 2016, which offers pay-as-you coverage for valuable personal goods.
Sold only to the under-50s, Back Me Up allows its young users, for £15 per month, to insure their three most valued items – say, a laptop, bike, and mobile – simply by photographing them and uploading the images to the app. They can also swap their items with a simple swipe of their smartphone, in a feature that has brought comparisons with popular dating app Tinder.
With artificially intelligent chatbots now dishing out legal and medical advice, it was only a matter of time before insurance agents became automated too. London-based app Spixii was designed by a trio of insurance experts, and allows users to seek instant insurance advice tailored them.
A user travelling on holiday, for instance, would be asked ‘Do you think you’ll be away for more than three months’, and ‘Do you know when your trip ends?’, before being pointed to the package that is right for them. Spixxi was backed by London’s Startupbootcamp.
It is just not just consumers who are targeted by InsurTech firms – insurance firms are increasingly using tech to insure themselves, in the form of ‘reinsurance’. QuanTemplate, co-founded by former Lloyd’s of London worker Adrian Rands and computer scientist Marek Nelkel, has excited the InsurTech world since its 2009 creation.
The service seeks to help reinsurers process large quantities of data so they can better assess insurance-related risks, and has won several big-name insurer sign-ups. In its largest test, QuanTemplate says it was able to analyse 50 million rows of data in 900 milliseconds. The firm is backed by venture capital firm Anthemis Group, and was named last year by City AM as one of the “hottest” FinTech startups.
Know of any other interesting UK InsurTech companies? Let us know in the comments below.