Lighthouse #18
Curating the best insurance, insurtech, innovation and leadership content for you.
Ron Arnold
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The way to get good ideas is to get lots of ideas and throw the bad ones away.
Linus Pauling
A special request: Dear colleagues and friends, male depression and suicide is a big issue. Every day, about six Australian men commit suicide.…about 2000 a year. Many more attempt suicide, with estimates at over 40,000 a year. These men are all someone’s son, someone’s friend, many are husbands or partners, some are fathers, brothers and uncles. Most men are too “tough” to talk about their issues – certainly in the era I grew up in, that would be viewed as a sign of weakness.
My son is quite passionate about the issue and is doing a fundraiser. He is trying to set up something at his school that they do every year. The charity they are supporting is #talk2mebro.
What I particularly like about the charity #talktomebro is they are going into schools, to help young men to get the courage to speak up, check-in on their friends, get support, and realise it is not sign of weakness to ask for help.
Anyway, if you could find your way clear to make a small donation, that would be greatly appreciated. It is pretty simple, can be done on your phone...and can be anonymous if you like. You can make a donation to my son’s fund raiser here:
https://gofund.me/3f074cb5
Thank you, and a special thank you to those to those who have already donated.
Asleep at the wheel?: If you are a car insurer, and you are not taking note of what some of the auto-manufacturers are up to - you should be.
Tesla's insurance activities are attracting a lot of insurance industry attention, leveraging the connected car data as a key pillar in redefining the motor insurance business model. Ford Motor Company is also very active in looking to share connected car data, seemingly with a view to prime connected car type offerings. GM now looks to be ramping up its activity, partnering with American Family Insurance. Will the auto-manufacturers have the patience, skills and appetite to change the game? I don't know. They have tried, without a lot of success, previously. Nonetheless, it will fascinating to see how this plays out and how the large incumbents will respond - some are certainly more active than others.
Some interesting quotes in this article to provide some insights into the thinking behind these activities:
"The goal is to be 30 to 40% cheaper for insurance...That’s the endgame.″
"Auto insurance is unlikely to ever be the largest business at either company, or even close. But insurance is shaping up as a way that the finance side of automakers’ business can help drive innovation and make adoption easier – as the data generated by the cars themselves is captured to deliver lower insurance prices and, automakers hope, cement customer loyalty."
"GM is moving fast, too...working on a safe driving behavior algorithm developed jointly with American Family Insurance...the company’s “vision to offer a more fair/personalized insurance product to our customers.”
"At Allstate, more than two million customers are enrolled in telematics programs. In states where the plans are approved, 21% of our auto customers are currently enrolled and 35% of new Allstate auto customers choose the plans" Source: CNBC
Zego & QBE partner on fleet risk solution: Commercial motor insurer, Zego, has partnered with QBE Insurance. The partnership is looking to deliver tech-enabled, behaviour-led fleet insurance products. QBE will initially underwrite Zego’s behaviour-led fleet product which makes use of telematics data to provide a fleet’s risk profile as well as sharing risk reduction tips. Smart move by QBE to leverage the commercial fleet opportunity to enhance its approach to telematics type offerings and develop some learnings which, at some point, will likely make their way into personal lines as they are overseas. For instance, in the US, Allstate has more than two million customers enrolled in telematics programs such as Drivewise and Milewise. In states where the plans are approved, 21% of auto customers are currently enrolled and 35% of new Allstate auto customers choose the plans. In Australia, we see KOBA Insurance pushing the boundaries but I cant see much from the big players. Will this prove to be a strategic mis-step? Source: ffnews
EV charging stations - the petrol stations of the future? EV Charging stations - very likely the petrol stations of the future. Surprises me that there is not a bit more of a battle on to own this space. Noteworthy that Australia’s largest motoring groups have just taken full ownership of Australia’s biggest electric vehicle charging network, Chargefox. The immediate goal to double the number of charging points around the country to 5,000 over the next three years. The motoring groups involved include the NRMA, RACV, RACQ, RAC, RAA and RACT, and – through Australian Motoring Services (AMS). Good move to provide some strategic optionality! Source: The Driven
Apple hedging its strategic bets: Good piece by CB Insights framing what look to be key aspects Apple’s strategy: by tracking some of its investment and partnering plays across:
AR/VR
Digital health
Machine learning & AI
Semiconductors & advanced materials
Auto
Digital and media services
Financial Services
Clearly Apple is giving itself a few strategic options here both in terms of value chain and its broader "eco-system". Worth a read - 5 minutes. Source: CB Insights
Digital only propositions winning customers: Interesting report highlighting that digital only providers yielding higher satisfaction than traditional banks. The data highlights that digital players are doing a good job of delivering great experiences to customers. The Galileo survey also reported some other interesting facts:
> a majority of consumers (62%) would be highly or somewhat likely to switch to a digital-only bank at some point in the future.
>up-and-coming generations like millennials and Gen Z, which are growing in importance as they age and build wealth, expressed an even greater inclination to switch at 77% and 72%, respectively.
I expect similar outcomes are emerging in insurance - great digital experiences are more than a table stake, they can be a point of difference. Source: CCG Insights
Super report on the state of European insurtech: This is a great resource and thanks to the work of Mundi Ventures, MAPFRE, NN Group, Dealroom.co
Some key insights:
> Insurtech funding has slightly cooled off, mostly at late stage,
> The sector is heavily underfunded compared to peers/startups in similar markets like fintech, health and mobility.
> Global insurtech funding has pulled back almost 50% in Q1 2022. It is now at pre-pandemic levels. Late stage has seen biggest funding retreat. The number of early and medium stage set a new record in Q1 2022. Europe posted its second best quarter ever in Q1 2022 and is closing the gap with the US, which saw the strongest.
Source: dealroom
Q2, 22 Insurtech funding update: The latest findings on insurtech investment activity from Gallagher Re:
> InsurTech is showing signs of a small recovery, with Q2 funding up 8% on the prior quarter as total disclosed global InsurTech funding for the quarter reached an impressive $2.41 billion.
> Average deal size increased for the quarter by 18.3% — $22.11 million in Q2 compared to $18.72 million in Q1.
> The increase in average deal size is however overshadowed by a 7.7% decrease in total Q2 InsurTech deals. Q2 saw 132 InsurTech deals, compared to 143 InsurTech deals in Q1.
> Total disclosed funding for L&H InsurTech reached $918M in Q2. This reflects a 12.4% increase in funding from the prior quarter, as well as an increase in deals. There were 40 deals for L&H InsurTech in Q2 compared to 37 in Q1.
> $948 million was raised in six Q2 mega-rounds, including four based in the U.S.
Speed drives claims satisfaction but automation largely untapped: Some useful insight's here about customer satisfaction and expectations of insurance claims handling. Some headlines:
> 70% of insurance policyholders said they were either satisfied or very satisfied with how their insurance company or agent handled their claim.
> one factor more than any other drives satisfaction - speed of settlement! The longer it takes to settle a claim, the less satisfied that policyholder will be.
> many insurers have exploited the omni-channel opportunity - "low hanging fruit"
> 75% of executives said AI and machine learning can bring “considerable” or “great” value eg much greater automation yet only 44% of executives say they are advanced in their use of AI, automation and machine learning. Source: Accenture
Ohio-based auto and home insurer Branch has reported a $147 million Series C funding: This brings its valuation to $1.05 billion. Branch launched in 2019. It is a full-stack insurance company. Its tech and data system can instantly bind and bundle auto and home insurance policies - at the same time. This is unusual and a good capability if it really works.
Branch said it has grown its annualized written premium 1300% year-over-year in the past 12 months. Interestingly, it is also working on embedded insurance. It has a dedicated “embedded” unit and has partnered with mortgage, auto and home security companies. Some partners include OpenRoad Lending, SimpliSafe and Homepoint.
Really hoping Branch can balance funding and growth, while managing the book quality to deliver acceptable CORs - avoiding some of the challenges faced by some other high profile full stack propositions.
Perhaps the most innovative home insurer in Australia is Honey Insurance. Richard Joffe and his team are pushing embedded offers with the likes of Pexa. Source: techcrunch
upcover raises $2.7m I had the privilege doing a bit with Skye Theodorou and Anish Sinha when they were first kicking off upcover. So its great to see them get some additional funding - $2.7 million in a Seed funding alongside $2 million in debt. Will watch with interest as they look to redefine and re-imagining insurance for small businesses. Source: Startup daily
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