“We made insurance its own category on this year’s Fintech 50 list. Why? It’s hot. Global funding for insurtech companies jumped from $4.4 billion (410 deals) in 2018 to $6.8 billion (476 deals) last year, according to Accenture. There are full-blown digital carriers and next generation virtual brokers. The aim is to close policies online, not by talking to a human agent at a call center.
When life changes, so should your insurance. With tailored products and easy access, insurtech companies make shopping for insurance faster and often cheaper. If you’re a new parent, you can buy a 20- to 30-year level premium term life insurance policy online in minutes, without a medical exam (in most cases). Moved to a walkable city neighborhood and drive less? Consider auto insurers that charge you each month based on miles driven, tracked via app. Grown kids moving to their own apartments can get renters insurance in seconds. Gig workers can get business insurance coverage on the spot.
Here are the six insurtech companies that made the Forbes Fintech 50 in 2020:
Headquarters: San Francisco, California
Uses predictive technology to quote term life insurance rates in about 10 minutes via its app and verifies applicants’ self-reported data with their actual medical and pharmacy records, requiring no medical exam for most buyers. The policies Ethos sells, designed specifically for its platform, have level premiums for 10 to 30 years and cap out at $1.5 million in coverage. Available in all states except New York.
Funding: $107 million from GV, Accel, Sequoia Capital and others, including celebrity investors Jay-Z, Robert Downey Jr., Kevin Durant and Will Smith; latest valuation of $450 million*
Bona fides: Partners with heavyweights Legal & General America to issue policies and Munich Re and RGA as reinsurers
Cofounders: CEO Peter Colis, 30, and CTO Lingke Wang, 29, were roommates at Stanford Business School when they hatched Ethos
Headquarters: Palo Alto, California
Using public data, satellite imagery, and smart home devices such as water-leak detectors, home insurance agent Hippo streamlines application process and minimizes claims. Just added twice yearly home maintenance checkups through platform Sheltr, acquired last November. Now licensed in 21 states, Hippo aims to sell nationwide by year-end.
Funding: $209 million from Bond, Felicis Ventures and Lennar Corp. and others; latest valuation of $1 billion
Bona fides: Premiums grew more than fivefold last year; customer retention rate over 90%
Cofounders: CEO Assaf Wand, 45, and CTO Eyal Navon, 39, both Israeli-born serial entrepreneurs
Headquarters: Cambridge, Massachusetts
With more than 130,000 auto insurance policies closed since its 2016 launch, comparison site Insurify now offers home and life policies too. Unlike other insurance comparison sites, CEO Snejina Zacharia, a Bulgarian immigrant, aims to use AI to close all policies online, without buyers talking to an agent, and she promises Insurify won’t sell your data to other brokers.
Funding: $30 million from Hearst Ventures, MTech Capital, MassMutual Ventures and others
Bona fides: 67% of auto policies are closed online, without the touch of a human agent
Cofounders: CEO Snejina Zacharia, 43, her husband Giorgos Zacharia (CTO of Kayak), 46, and product head Tod Kiryazov, 35
Headquarters: New York City
Sells renters’ insurance from $5 a month and homeowners’ from $25 a month using AI to approve coverage in 90 seconds and pay claims in as little as three minutes. Aims to discourage bogus claims by donating excess (after claims, expenses and a fixed fee) to charities customers choose. Now in 26 states, Washington D.C. and Germany, Lemonade is expanding throughout the U.S. and Europe.
Funding: $480 million, including $300 million Series D led by SoftBank last summer, and earlier money from Allianz, Sequoia and Aleph; latest valuation of $2.1 billion*
Bona fides: More than 500,000 customers, producing annual recurring revenue of $115 million. Loss ratio declined to 73% in 2019 Q4, down from 368% in 2017 Q1
Cofounders: CEO Daniel Schreiber, 48, and COO Shai Wininger, 46
Headquarters: Palo Alto, California
Mobile-first insurance carrier, which started as an agency, specializes in small business lines—general liability, professional liability, commercial auto and worker’s compensation—sold in packages tailored to specific businesses (e.g. personal trainer, contractor, restaurant). Sells in all states except New York and is a licensed carrier in 26 of them.
Funding: $381 million from Munich Re, TLV Ventures, Ribbit Capital and others; latest valuation of more than $1 billion
Bona fides: Serves 79,000 small businesses; gross written premiums, as of August, running at a $77 million annual rate
Cofounders: CEO Guy Goldstein, 52, CTO Alon Huri, 43 and VP R&D Nissim Tapiro, 49
Headquarters: Columbus, Ohio
Auto insurer qualifies customers and sets their rates by first monitoring their driving with a smartphone app measuring 200 variables (e.g. braking, miles driven). Last year, Root brought claims processing in-house and expanded into renters’ insurance, offering to cover property whether stolen from a customer’s car, apartment or hotel room.
Funding: $528 million from Coatue, DST Global, Tiger Global Management and others; latest valuation of $3.65 billion
Bona fides: More than $307 million in direct premiums in the first three quarters of 2019, up from $106 million in full year 2018
Cofounders: CEO Alex Timm, 31, who started working at his dad’s insurance agency at age 14, and CTO Dan Manges,34, former CTO of Braintree before it was acquired by PayPal