5 FinTechs To Watch: InsurTech

Insurance is on the verge of momentous change.

Its collision with FinTech has given birth to startups the world over, looking to capitalise on a sleeping giant comprising 8.8% of the worlds GDP. Initially a subsector of FinTech that remained largely in the shadows, ‘Insurtech’ is now hot on the lips of investors and gaining traction amidst a rising influx of venture capital.

It’s also growing fast in Australia. We at YBF are proud to partner with Insurtech Australia – who formally launch next month – to foster the supporting ecosystem and advance innovation within insurance. This week we saw Aon, Suncorp and IAG come together at YBF to discuss how startups and incumbents can collaborate effectively within Insurtech.

Given the openings to improve a multitude of insurance processes, it is no wonder the world is waking up to the value of insurtech investments. Customer-centric approaches are redefining the landscape, with an increased focus on efficiency and ease of navigation in the process.

Similar to our 5 Payment FinTechs article, we’ve highlighted 5 need-to-know startups tackling insurance in a unique way.



One of the first insurance startups and a recent entrant into the Australian market, Friendsurance established base in 2010 in response to an overwhelming amount of insurance damage claims in Germany.

The peer-to-peer insurance pioneer uses a shareconomy model where customers can connect with each other online and form their own 10-person insurance pool. Small claims are then paid out of this pool, with larger claims being handled by the standard insurance company. In the event of insufficient funds, stop-loss insurance covers the rest.

The interesting proposition is the claims-free bonus, which solves the moral hazard problem so frequently seen in insurance. At the end of each year, if a pool of users remains claimless they are rewarded with a cash-back bonus up to 40% of their premiums. On the other hand, any claims made reduce cashback for all. Curiously enough, Friendsurance records a claim frequency below market average.

In reducing claim costs, Friendsurance is seen as an attractive partner to insurance companies while the bonuses increase customer satisfaction and loyalty. For customers, the value lies in never paying more for insurance than they would with the startup.

Value creation on both sides, being the first of its kind and effectively leveraging social media marketing as a part of its business model, have all allowed the startup to grow rapidly. Such has been the success of Friendsurance, more than 15 imitations of its P2P model have cropped up around the world since its inception.

A variety of investors such as Hong Kong billionaire Li Ka Shing’s Horizons Ventures, Australia’s VantageFund and e.ventures of San Francisco have all backed the company. Its newest round of funding in 2016 provided the springboard for international expansion, its first target market being Australia. Given more than half the country is on social media, Friendsurance has chosen well.

Its first offering here, a cash-back bike insurance policy, was released just a few weeks ago. It covers the bicycle, the rider’s loss of income and dental work in the event of an accident, as well as third parties. In a unique move, coverage also extends to 10-17 year olds, who are traditionally not covered by insurers.

Starting with one insurance category in 2011, the startup now has four: electronics, home contents, private liability and legal expenses. It is in plans to further its offerings, with car insurance touted as the next possibility. With an international ambition and a model that can be applied in any market, we look forward to its continued development in Australia and the next country it chooses to target.


2. LEMONADE (United States)

One of the better-known modern insurance start-ups, Lemonade is a property and casualty insurance company using personalised AI to eliminate the difficulty in obtaining insurance. Powered through bots and machine learning rather than brokers and paperwork, it allows customers to purchase customised insurance directly through their smartphones in a matter of seconds.

The chatbot interacts via direct text messaging conversation, asking quick and simple questions often with suggested answers and autofill. This allows the user to build their own risk profile with just a few taps of their finger. Once the personalised policy is in place, claims made are instant and paid to customer accounts within 3 minutes. This is in stark contrast to the usual process of visiting your broker in person, having to work through several steps before receiving payment in a timeframe currently averaging 60 days.

In addition, instead of the traditional industry standard where any excess premium unclaimed is taken as profit by the insurance company, Lemonade gives back the unclaimed money to non-profit causes. These causes are picked by the customers themselves, bringing an element of corporate social responsibility into the mix.

Due to a lack of overhead costs and no employment of brokers, cost savings are passed onto the customer. And by charging a flat fee, Lemonade has positioned itself as the antithesis to the classic insurance company who profits from customers claiming less. The result is a cheaper, faster customised claims process where cover is paid out instantly.


3. TRōV (United States)

Trōv is an on-demand insurance company targeting millennials, again working through a smartphone app. Rather than a blanket cover, it allows users to select various electronic items they would like to purchase cover for and instantly switch on and switch off insurance. This is achieved by swapping out traditional long-length policies in favour of micro-duration policies.

Claims are made by sending a few text messages, allowing the user to protect against accidental damage, loss and theft. As with Lemonade, the claim is processed within minutes. By targeting those electronic items seen as modern necessities, Trov is positioning itself as an insurance policy provider for items actually owned in large swathes by millennials, given declining home and car ownership.

Although based in San Francisco, the start-up’s first real market foray has been in Australia. This was launched through a partnership with Suncorp, who bought a 6.6-million-dollar stake in 2016. In addition, Trov operates in the UK under partnership with Axa. So far, 65% of customers who have switched on their insurance, have not switched off.

Currently available for common electronics such as phones, laptops and cameras, the start-up is looking to expand its boundaries to other items in the near future such as sports equipment and musical instruments.

With a total funding of $85 million, the goal looks reasonable given Trov recently secured investment from one of the world’s largest insurance providers in Munich Re, to help it expand to numerous other countries.



7 seconds. This is the time Neosurance, a personalised virtual insurance agent for carriers, takes to process insurance.

Created as a solution for insurance companies, Neosurance is based on mobile push sales of short-period micro insurance, allowing a customer to become insured in a single swipe. At its core is an AI machine-learning system that works with IoT data and continuously learns through information fed into it. Marketing itself as the first insurance agent able to sell an insurance policy in sub-10 seconds, Neosurance is delivered as-a-service and paid on performance, combining AI and mobile technology to provide context-specific insurance.

For example, if one were to fly into another country, they could receive a push notification upon touch down, proposing cover. The customer could then check the conditions, privacy policy and once satisfied, choose both the number of people and the days to be insured. In such an instance, the customer could tailor their cover to match the exact duration of their travel, before purchasing.

Neosurance possesses its own mobile SDK. Alongside cloud2cloud integrations this allows companies to produce hyper-targeted policies based on a customer’s personal profile, location, context and behaviour. In using a machine learning system, the aim is to deliver a top-notch customer service experience. By using a Segment of One approach designed to discover the preferences of each user, custom interactions are created while generic or bulky messages are avoided. Similarly, push notification frequency is maintained at a ‘moderate’ rate in order to maximise proposal success rate.

Recently selected by arguably the most important startup accelerator in the world, Neosurance are one of the 26 handpicked startups in Plug & Play’s 3-month intensive InsurTech Acceleration program. With access to a network of over 180 VCs and 191 corporate partners, Neosurance is very well placed to define its business model and successfully pitch to what would become, its first real significant investment.

5. CUVVA (Scotland)

‘We were fed up with our poor experiences with slow and self-interested insurance companies’. These were the words of Cuvva’s founders; a few guys who did not know much about insurance, but knew a lot about technology.

Cuvva is an insurance start-up specifically for car insurance. Instead of the traditional full-year cover for cars where people are billed at the same rate regardless of how much they drive their cars, Cuvva breaks insurance down into small segments that are tailored to each individual’s driving habits and thus, insurance needs.

Cuvva provides three categories of insurance via its mobile app: continuous, short-term and learner.

Continuous insurance is for those who drive their cars infrequently. It provides the option to purchase flexible insurance adapting to how much a customer drives. A low monthly subscription is paid for when the car is sitting idle, with a top-up to full cover only during the hours driven. Cancellation is offered at any time with no penalties.

Short-term is insurance by the hour, ideal for those borrowing someone else’s car. Instead of the car owner carefully deciding if they can trust the borrower then arranging insurance via phone calls, ID checks and paperwork, all that is required is the Cuvva app. The vehicle registration number is required, followed by the user’s name & details and the length of time to cover. This prompts a flat fee, which when paid for, starts immediately. The car owner’s policy and no-claims bonus is left unaffected.

Finally, the learner insurance helps those learning to drive. It provides them the chance to buy insurance and cover their practice sessions on a friend or family member’s car, by the hour.

Policy requests are verified using data from the UK’s Driver and Vehicle Licensing Authority, which takes about 10 seconds. So far, Cuvva has sold more than one million hours of car insurance. Despite the founders experiencing trouble in initially selling the idea to underwriters, analysts now say more insurers will have to follow models of micro-duration policies akin to Cuvva as the industry continues to see a tidal wave of change.


York Butter Factory is currently offering Melbourne-based InsurTechs a free 2 months off membership with us. If you would like to get connected to our ecosystem of industry leaders, entrepreneurs, thinkers and community builders, reach out to us via info@yorkbutterfactory.com.