No hesitation: Insurtechs plow forward with 2021 plans

March 30, 2021 3:26 PM

di-subway-stock-pedestrians-masks-033021 — Pedestrians wearing protective masks walk along Wall Street in the Financial District of New York, U.S., on Friday, March 5, 2021. Stocks climbed as technology shares rebounded from an earlier selloff. Photographer: Michael Nagle/Bloomberg

After a hiccup of uncertainty and sluggishness during the height of the COVID-19 pandemic, the insurtech sector has come roaring back. In the third quarter of 2020, there were 84 insurtech funding deals in the U.S., Canada, and Europe, according to Crunchbase data. That was the low point among quarters that eclipsed 100, including 113 in the following quarter and 108 as of this writing in the first quarter of 2020. (The first two quarters of 2020 saw 114 and 117 funding deals respectively).

Now, startups at all stages of development are ramping back up in a new environment where the need for digital transformation at insurance carriers has never been more acute. “There's not a question anymore of adoption for customers,” says Brad Weisberg, founder and CEO of Snapsheet, an insurtech providing digital claims capabilities. “Everyone was forced to have to process claims in a digital fashion and they've seen the results and the value.”

Digital Insurance reached out to several insurtechs at different stages of development to find out how they are navigating the (nearly) post-COVID era.

Marble

Latest round of funding: Seed

Marble is emerging from a closed-beta to open-beta environment with the public launch of its rewards app for insurance. By uploading their declarations pages for various types of P&C insurance, users can accumulate points towards rewards through regular premium payments, referrals, and more. Marble also has a comparison-shopping component for insurance shoppers. And it developed all this starting right as the pandemic era kicked off in March.

“I interviewed Adi (Sundar, Marble’s CTO) the day before the lockdown really started,” says Marble co-founder and CEO Stuart Winchester.

Both Winchester and Sundar had experience in the insurtech world. Sundar was part of the team that launched Stable Insurance, a ridesharing-insurance provider. Winchester was working at a property-tech company called Better.com, where he became a licensed insurance agent in order to manage its affiliate business. They saw that unlike other financial services, insurance wasn’t leveraging digital fully for relationship-building.

“The inspiration was a Mint-type concept,” Winchester explains. “If you go one level of abstraction up from just single types of credit cards and realize insurance is so ubiquitous and in some cases like legally required, you can build engagement with a platform if that platform can offer great comparison shopping.”

Credit cards also provided some inspiration for funding the rewards, which include gift cards and charitable donations. Credit rewards are funded from a percentage of interchange fees. Marble is instead drawing on the pool of money that is usually reinvested into additional digital marketing for insurance, like referral and lead fees, to fund its rewards.

“What we're excited about is pushing value back to the consumer for insurance for the first time,” says Winchester.

HDVI Insurance

Latest round of funding: Series A

HDVI Insurance, founded by Esurance co-founder Chuck Wallace, started out providing insurance targeting small trucking companies, bringing telematics, data analysis, and camera technology to firms that weren’t being served those next-generation capabilities as readily by legacy insurers.

“We saw a big opportunity that was not being executed in commercial auto to build a company that is completely built around technology and data and everything that we do in the small to mid-sized fleet businesses,” Wallace says. “Like a lot of other insurance industries. It's got some a handful of significant companies and the rest of it's highly fragmented. So there's a lot of opportunity to build a large innovative company.”

HDVI launched in 2018, and recently announced its engagement with Munich Re and Spinnaker insurance to power up its captive and allow it to expand into four new states. Next up, Wallace says, is continuing to expand not just in the trucking segment, but in other fleets as well.

“The pandemic has affected transportation and delivery in general,” he explains. “There was increasing demand in the 18-wheelers space, and also the medium-duty and local delivery class. So there's a big opportunity for us there in the future, and we will be there.”

Thimble

Latest round of funding: Series A

Thimble, which provides variable-length commercial-insurance coverage to small businesses, certainly didn’t expect a pandemic. But as the dust settles, the company finds itself well-positioned for the new business environment.

Jay Bregman, co-founder of the company, said that Thimble’s business around construction and handyman services experienced a lot of growth over the course of the pandemic anyway. Its variable-length policies were good fits for people who were in some cases striking out on their own for the first time.

“I think a lot of these businesses that were affected by the pandemic will be shell-shocked for quite a while and will prioritize flexibility over cost for a couple years,” says Bregman.

On the home front, Thimble was named to Fast Company’s list of “Small and Mighty Companies” and has been hiring a larger remote workforce as the pandemic has encouraged that kind of model.

“At some point we will raise and announce new funding,” Bregman says. “The market appears to be extremely strong for businesses that have a solid model with a road to profitability. We’re confident in that side of things.”

Snapsheet

Latest round of funding: Series E extension

For more mature insurtechs like Snapsheet, the events of the past year rationalize the work it’s put into digitally transforming insurtech.

“Pre-pandemic, the insurance industry was already headed towards digital transformation, and the pandemic essentially just accelerated that shift by highlighting the necessity for everything to be digital,” says co-founder and CEO Brad Weisberg.

With the addressable market on the rise, Snapsheet was advised that it would be a good time to raise additional capital to scale its business.

“We weren’t actively fundraising,” says Weisberg. “We had a relationship with Donald Lacey [chief investment officer of the Ping An Global Voyager Fund] and he felt with some additional capital the timing was right to accelerate our software capabilities into the market.”

Weisberg sees other more mature insurtechs going the SPAC route to IPO, but is still more focused on refining Snapsheet’s capabilities in light of increased insurer and customer adoption.

“In claims, carriers had really hung their hat on trying to give the best experience possible, but in their mind that was high touch -- calling your claims adjuster or having somebody there 24/7 to answer your questions,” he explains. “What the pandemic has done is pushed all these digital initiatives forward and people don't want to talk on the phone anymore -- they'd rather be able to log in and know the status of their claim, communicate by text message and email.

“I predict that 50% of all non-bodily-injury claims will be completely automated within the next five years,” he asserts. “We're doing it. And it's now, ‘how quickly can we get the industry to adopt it?’”