Soci - 08 • 01 • 2021

 

                                                                                                                                                                                                                                          
di Andrea Birolo, Corporate Venture Capital | Innovation expert – Head of Corporate Venture Capital at Reale Mutua Assicurazioni
Pubblicazione: LinkedIn.com 
gennaio, 2021

 

Despite the Covid-19 pandemic, 2020 has been, globally, an interesting year for insurtech with many relevant deals, IPOs, partnerships and more.

Here I propose some innovations that I consider most relevant, commented by someone (me 😊) who deals with corporate venturing in insurance (so I’m a bit…bias).

Investments
Reinventing home insurance.

Big moves in the home insurance sector!

Hippo completed two rounds, raising around $450M. Following the first $150M round, Hippo has acquired the carrier Spinnaker Insurance Company, which is licensed to operate in 50 US States and gave a very strong acceleration to the scale-up of the business model. The second round – almost $300M – was led by MS&AD Ventures, the corporate venture capital vehicle of the Japanese insurer MS&AD.

And, of course, another relevant transaction was the IPO of Lemonade last July, which raised $319M. 

Real-time risk assessment in car insurance
In 2020, there were 2 major deals in this sector, both IPOs (or almost…).

Root Insurance – DtoC solution that collects driving behavior data via smartphones – closed a $700M+ IPO.

Metromile – a solution that collects information via onboard diagnostic port (OBD) – announced a reverse merge to IPO via SPAC (Special Purpose Acquisition Company) INSU Acquisition Corp. and is closing a $160M PIPE round.

Health insurance

There’s a lot of activity going on in this sector: in the preventive care model, Oscar Health closed two rounds raising over $360M with the participation of vehicles such as Google Venture (which has already invested in Collective Health and Ethos).

Also noteworthy is Acko’s $60M round with Munich Re Ventures as a new investor and Amazon’s follow on (through Alexa Fund); Amazon has invested multiple rounds in the company and allows Prime members to directly purchase Acko solutions through its e-commerce platform.

Unicorn Bright Health – recognized for the size of its network – closed a $420M+ round and French startup Alan (oh yes, a European startup!!!) a $50M round.

Marketplace
In the marketplace sector, there were 2 major deals, the round of Policygenius for about $110M and the $913.50M IPO of Go Health.

The remarkable thing about Policygenius round is that in addition to traditional VCs, Corporate Venture Capital vehicles – linked to large global or local insurance groups – participated (Axa Venture Partners, MassMutual Ventures, Transamerica Ventures of Aegon Group).

Pet Insurance
Yes, you read that right: pet insurance!

The pet insurance segment is gaining investor interest as it is growing over 20% annually since 2014 – almost five times faster than the broader health and P&C insurance markets. And BoughtByMany closed a $96M round in which Munich Re Ventures also participated.

In this sector goes also the acquisition of PetFirst Healthcare (now Petfirst Pet Insurance) by MetLife.

Small business solutions
Another unicorn, Next Insurance, closed a $250M round in September in which several corporate venture capital vehicles also participated: Google’s Capital G, MS&AD Ventures and Munich Re.

Digital distribution models for incumbent
I highlight Clearcover’s $50M round for two reasons: first, American Family Insurance’s corporate venture capital vehicle, American Family Ventures, took part. Second, Clearcover leverages the MGA model providing incumbents with a digital distribution channel they otherwise wouldn’t have (an example is a partnership with Fortegra).

Further relevant matters
From distributor to carrier
Four insurtech have chosen to become independent carriers.

Buckle – focused on gig economy, especially for part-time rideshare and delivery drivers, full-time taxicab and limousine drivers, non-emergency para-transit drivers, and transportation network companies – has acquired Gateway Insurance Company with license in 47 States.

Hippo bought Spinnaker Insurance Company with license in 50 States.

Pie Insurance – insurtech for small business insurance with focus on workers compensation – has acquired American Sentinel Insurance Company and, at the end of 2020 (pending approval by the end of January 2021), Bestow – a full-stack life insurtech – has acquired Centurion Life Insurance with license in 47 States.

Empowering partnerships
Several partnerships between insurtech and incumbents were developed during 2020; among others, the Japanese insurance company Tokio Marine has partnered with Tractable for AI claims solution to analyze auto damages and with Metromile for its enterprise claims platform.

Ford stated that it will distribute Metromile UBI solutions via its connected-car platform.

Walmart, after the acquisition of the startup CareZone, is about to launch its health solutions.