A market map of insurance startups
Last night, Sarah Tavel and I hosted a small dinner for founders and builders of insurance startups, and I was fascinated by this market. I wanted to dive deeper into this space and share some market observations.
Some caveats before we dive into the analysis.
This ecosystem map is not designed to be 100% comprehensive. It’s to understand all the different startups within the insurance space
If I am missing something, tweet me @mccannatron.
This space is developing quickly so take this into consideration.
Market Map
- Graphic is above and a full list of all of the companies on the market map is below.
Reflections on the insurance market
- The insurance market is huge — insurance premiums are $1.2 trillion dollars per year in the U.S. alone.
- Of this total spend: 56% goes into life and health insurance and 44% goes into property/casualty insurance (which includes auto, home, and commercial).
- Insurance today is typically sold through agents, which creates a steep customer acquisition cost for carriers — ~90% of premiums were sold through independent agents or affiliated agents of the insurer.
- Two of the largest forms of insurance are conscripted: you must have auto insurance if you drive a vehicle and under Obamacare you must have health insurance. Getting consumers to care about other forms of insurance is no easy task.
What is changing in the insurance space (why now)
Most of the startups in the ecosystem are taking advantage of one or more of the major forces in the market today.
- New channels (web/mobile) — Today the bulk of insurance is sold through agents in-person or over the phone. We now have the ability to sell insurance directly at the point of need in shorter durations.
- New sources of data (big data, machine intelligence, wearables, connected cars) — We now have the ability to collect more data which potentially could better inform the insurance risk models we use today.
- Potential for new types of insurance (ie. sharing economy, self driving cars) — Because people can now be providers and users of services (ie. Airbnb renting homes and renting out your own home) there is a potential for new types of insurance.
- Potential for new structures of insurance (P2P, lowering the barriers of self insurance) — Some startups are trying to reinvent the entire model of insurance and apply new models to the business of insurance.
Key Question
If you are building a startup in the insurance space, a key question you should ask is:
- Are you innovating on the sales channel of insurance or are you innovating on the product level (aka. trying to create a next-gen carrier)?
Both are viable but depending on your end goal, you will have very different considerations on how you enter and compete in the market.
Additional resources
If you are looking to learn more about the insurance space, I highly recommend you check out this four part series written by Kyle Nakatsuji:
- https://www.cbinsights.com/blog/transforming-insurance-distribution/ — intent vs. opportunistic types of insurance products.
- https://medium.com/@kylenakatsuji/insurance-2-0-new-products-and-combined-approaches-4e75d333892d#.g7k18oey4 — how to rethink the product level of insurance.
- https://medium.com/@kylenakatsuji/insurance-2-0-p2p-and-structural-innovation-94ee6bf5643c#.8gxx89cjz — how to rethink the structural level of insurance.
- https://medium.com/@kylenakatsuji/so-your-startup-wants-to-sell-insurance-a0167581f7b1#.6jraw5xwe — breakdown of sales channels for insurance products.
Breakdown of all of the companies on the market map
Comparison Insurance
- PolicyGenius — Raised $20M, online price comparison for insurance. All types of insurance.
- Coverfox — Raised $12M, creating a comparison site for largely auto insurance.
- Coverhound — Raised $56M, creating a insurance comparison site — also offering fulfillment services during the insuring process.
- Insurify — Raised $2M, creating a virtual insurance agent to compare and recommend auto insurance options.
- Goji — Raised $70M. Creating an online auto insurance comparison site.
- Insureon — Raised $31M, comparison site for business insurance.
- Next Insurance — Raised $13M, building a product to compare and purchase business insurance.
- Zebra — Raised $20M, comparison site for car insurance.
- Credit Karma — A platform for credit scores, also offers a insurance comparison site.
- NerdWallet — Credit card comparison site, also offers an insurance comparison site.
Life
- Ladder — Still in stealth, in the health insurance space.
- Abaris — Raised $720K, creating a new type of annuity insurance for retirement.
- Sure — Raised $2.5M Micro-duration life insurance coverage during travel.
- Sureify — Engagement platform between clients and the insurance carriers. Creates potential upsell opportunities.
Auto
- Metromile — Raised $14M. Creating a new type of auto insurance — pay-per-mile car insurance. Policies are underwritten by National General Insurance.
- TrueMotion (Censio) — Raised $10M, Creating behavior based car insurance.
- Cuvva — Raised $750K, Creating a per hour auto insurance product, focused for the UK.
- Snapsheet — Raised $11M, greatly improves the claims process for carriers.
- Auto/Telematics
- Driveway Software — Raised $11M. Collects telematics data to rank how well you drive, potentially to sell this information to insurance companies. Doesn’t sell insurance directly.
- Automatic — Raised $24M. Collects telematics data through both hardware adapter and mobile app. Provides data to insurance companies but doesn’t sell insurance directly.
Health
- Oscar — Raised $727M, trying to build next gen health insurance from the ground up. They are attempting to be a next gen insurance carrier, not just a broker.
- Clover Health — Raised $135M, creating a new type of health insurance that uses data to be proactive about improving their clients health outcomes. I believe they act as the carrier as well.
- Collective Health — Raised $125M, creating a platform to make it easier for SMB’s to self insure, rather than using standard plans from traditional carriers.
- Melody Health Insurance — stealth, trying to create a new type of lower cost health insurance.
- Sherpaa — Raised $8M. Connects employees directly with doctors (telemedicine) and also offers guides to help in the insurance selection process.
- Limelight Health — Raised $3M. Building a white labeled insurance quoting app for brokers and agencies.
SMB/HR
- Zenefits — Raised $583M. Creating a cloud HR platform which also sells- insurance to SMB’s — however they have been in a bit of trouble recently
- Gusto — Raised $161M. Platform from SMB’s to manage payroll, benefits, and workers comp — including insurance.
- Namely — Raised $107M. HR and benefits platform, also offers insurance through the platform.
- JustWorks Raised $53M. Building a platform for payroll, benefits, and compliance — including insurance.
- MaxwellHealth — Raised $56M. Software platform for SMB’s to manage health plans, benefits, and payroll.
- SimplyInsured — Raised $8.4M. Creating a health insurance platform for SMBs — to find and administer health insurance. Was part of YC.
- Embroker — Raised $14M. Platform for purchasing and managing business insurance — including property and casualty insurance.
- Coverwallet — Raised $2M.Platform for purchasing and managing business insurance.
Sharing economy
- Stride Health — Raised $15M, Health insurance broker for freelancers and independent contractors, most notably used by Uber drivers.
- Slice Labs — Raised $3.9M. On-demand insurance for on-demand workers, still in stealth.
Home Insurance
- Quilt — Next-gen home insurance, still in stealth.
P2P
- Lemonade — Raised $13M, P2P insurance company, still in stealth.
- Gather — Building a P2P insurance model for SMB insurance.
- Friendsurance — Raised $15M, P2P insurance, based in Berlin.
- Guevara — P2P auto insurance, not launched yet.
- Inspool — P2P auto insurance, not launched yet.
- Jointly — P2P auto insurance, not launched yet.
- BoughtByMany — P2P health insurance.
- WorldCover — Was part of YC, building a P2P insurance product for crop insurance in emerging economies.
Product Insurance
- Trov — On demand insurance for individual products. Creating a new type of insurance.
- SimpleSurance — Raised $11.5M, provides product insurance (electronics, bikes, appliances etc) — based in Berlin.
- Gaggel — Smartphone insurance.
- Asurion — Not a startup, but Asurion dominates the $7.8B protection plan market for cell phones.
I hope this landscape sparks a conversation and if you have any feedback feel free to tweet @mccannatron or email me — especially if you feel I am missing any other categories of companies. I’m still learning about the space so would welcome any feedback. I’m also happy to connect with anyone working on a new insurance company — feel free to reach out anytime.
[linkedinbadge URL=”https://www.linkedin.com/in/mccannatron” connections=”off” mode=”icon” liname=”Chris McCann”] is Community @ Greylock Partners, founded StartupDigest, and Photographer. This article was originally published on linkedin.
Released earlier this month, CFA Institute&
A friend who recently started his own business couldn&
Reply