There is a lot of buzz going around in the Fintech community about the need for reinvention in the insurance sector. For example, online rate aggregators have been growing their presence in the life insurance space by offering consumers more options.
Back in 2016, RateHub CEO Alyssa Furtado pitched her idea to CBC’s Dragons’ Den and secured an impressive $1,000,000 investment from Canadian business moguls Joe Mimran and Jim Treliving.
After making the Dragon’s Den deal happen at a valuation of $14,000,000, Mimran commented, “I like the move into insurance for a couple of reasons. Insurance companies are looking to do more business online and it helps RateHub further diversify and create lifetime customers. The key will be to build brand awareness before someone else comes in and heavily markets, supplanting its position”. From then, the Fintech community took notice that Insurtech could be the next big tech revolution in personal finance services.
The Millennial Dilemma
There are other, less obvious, players entering the space too. Distribution models are changing as the needs of younger markets are dictating the way business should be done going forward. Archaic application processes, lengthy decision wait time, underwriting inconsistencies and inefficient data transfer protocols are just a few of the issues these companies plan to resolve with new technologies.
Insurance startups, or insurtechs, are trying to redesign insurance distribution models in a couple of key ways. The first category of disruptors are trying to reduce friction in the insurance buying process by making researching needs, shopping for rates, completing applications and accepting policy offers easier for consumers.
The second category of insurance startups is focused on serving insurers by enhancing their internal processes, making administration and underwriting quicker, more accurate and efficient.
Insurtech Ecosystem 2.0 (Source: Company Websites, BI Intelligence)
With Property & Casualty (P&C), Life and Health insurance being such tightly-regulated industries, Insurtech startups will need to prove that their proposed models offer a significant benefit to insurance policyholders, the financial intermediaries that issue these policies, and the industry as a whole.
There is some low-hanging fruit, such as eliminating unnecessary paper-based processes and prioritizing education around the actual coverages consumers need and desire.
Most insurance startups have been limiting their disruptive activities to mostly enhancing front-end experience alone. As of late, more work is being done to change core insurance carrier systems, giving them a platform to introduce technology that achieves meaningful change.
I’ve listed out six innovative companies that are doing big things in the insurance business. Hopefully, this serves as a primer for advisors who want to know where they will fit in this new emerging landscape.
A major player in the innovative InsurTech space, LOGiQ3 has been operating in Canada since 2006. This company started with the intention of applying their innovative ideas to the insurance and reinsurance industries. Their main goal is to leverage technology to improve the quality of data transmission between carriers and consumers.
The company also owns the Canadian digital life insurance industry platform, APEXA Inc., which has been the subject of a lot of discussion among advisors. This software is standardizing the contracting and compliance requirements for Advisors, Managing General Agents (MGAs) and insurance companies. Their technology claims to make processes more transparent and efficient while reducing risks of non-compliance.
LOGiQ3 also owns Toronto’s first open insurance innovation collaboration space, Cookhouse Lab. The Cookhouse Lab was set up as a hub for life insurance and reinsurance industry leaders. They share ideas and join forces to conceive and develop disruptive concepts with InsurTech.
Insurance professionals can engage with each other at Cookhouse Lab. They can collaborate in 90-day sprints, working on ideation, lab work, and digital acceleration to develop minimum viable products.
Securing a seat at Cookhouse Lab is not cheap, with rates starting at $3,000 per month at their Toronto location. That said, the benefits are relative to the potential results that can be achieved. The incubator is the only one of it’s kind, offering an all-access pass to work with innovative experts in the life insurance sector.
Planswell saves Canadian consumers time by educating them on their needs and giving initial insights on their financial planning process. The emergence of web-based financial planning tools allows consumers to get over the hurdles of procastination.
They offer a low-resistance way for advisors to engage prospective insureds who may not have the time to complete a needs-analysis questionnaire in person. The tool takes less than 30 minutes to go through, all within an intuitive and fast, user-friendly interface.
The process begins by the user answering questions about their income, liabilities and lifestyle factors. The tool proceeds to make recommendations on registered savings plans, borrowing solutions and life and living benefits insurance options.
Planswell serves as a true needs analysis tool by taking into account user’s entire financial situation before giving any advice. Keeping in mind savings, spending habits, and insurance needs when offering solutions.
Back in 2016, Humi set out to redefine the way small and medium-sized businesses used software to manage their payroll, HR and employee group benefits. Before Humi, there was no integrated platform for SMBs to manage all of these aspects of their business.
The company started with a simple offering to their SMB clients, free HR software for all group benefits clients. The offer was very relevant to their target market. This enabled their clients to have access to industry standard tools from the beginning of their engagement.
Humi’s unique selling proposition is the processing time they save their clients by implementing the free HR software. This value-added service gives Humi a clear advantage over traditional health insurance brokers.
Their tool has useful features such as aggregating onboarding procedures and automatically notifying brokers of new employee additions and terminations. Humi is truly revolutionizing how group health benefits can be managed by companies under 1000 employees.
Reed stemmed from the frustration of a second-generation plumber whose company responded to catastrophic building floods, daily. If there was a quicker way to shut off water following a leak, these disasters could have been avoided. Massive losses for both building owners and insurance companies could instead have been simple mop-up jobs.
After two years of research and development, Reed built an innovative technology solution. This tool could actively monitor and control plumbing systems in a wide variety of properties. On top of that, the technology is affordable and scalable for both new and retrofit applications.
The overlay software platform provides an intuitive dashboard, which empowers building operators with complete control of their system.
For P&C insurance, the highest volume of claims is water related, which also happen to have the highest claim value. Companies using Reed technology benefit from diminished claims severity, progressive risk management and reduction in administrative workload.
Juniper Life Insurance
33Seven, an Ontario-based licensed Life Insurance agency, has teamed up with Humania Assurance to provide Canadians with a new way to buy life insurance. Their collaborative brainchild, Juniper, is a simplified-issue contract administered electronically online.
Proposed insureds can go onto Juniper’s website and complete a life insurance application in 15 minutes or less. They offer Term life insurance policies in 10, 20 and 30-year term plans, with face amounts ranging from $50,000 to $1,000,000 in coverage available. These plans are underwritten by Humania, who have essentially white-labelled their existing HuGO Life Insurance product.
Comparing their standard rates with several other competitive carriers, Juniper’s offering has routinely come up with the lowest rates. They combine low-cost insurance solutions with an easy-to-fill application. Juniper plans to enhance the insurance consumer experience by leveraging the data the tells their user’s stories.
Juniper also works with brokers, by offering competitive compensation and access to their online application. They see the value in the broker channel and are taking a stance against bloated processes. They want to remove unnecessary steps in the life insurance application process that can be replaced with technology.
Back in 2018, the technology scale-up accelerator OneEleven partnered with Aviva Canada to launch the InsurTech Growth Program in Canada, which is the largest of its kind. The program sets out to accelerate product development and provide a platform for networking among key Insurtech entrepreneurs.
One of the objectives of the program is to help Canadian startups looking to reinvent insurance products and processes. Another goal aims to keep this talent in the country and continue to grow within the thriving Canadian startup ecosystem.
Aviva Canada’s role is to act as advisors to six InsurTech startups for a four-month period. Aviva helps them “de-risk their company, develop their product market fit and drive innovation in their respective industries”, according to Ryan Spinner, the Head of Innovation and Parnterships.
Photo by Brian de Rivera Simon of Tarsipix Studios.
The Insurtech Growth Program offers periodic progress check-ins, one-on-one mentoring sessions with Aviva executives, inclusion into the OneEleven community and insights on how access to customers, talent, and capital.
The program also facilitates access to the managing director of Aviva Ventures, a corporate venture capital fund in existence since 2015, with plans to invest $170 million over the next three to five years in innovative startups and technologies.
We are proud to announce our partnering with InnovationTO, a monthly meetup dedicated to fostering conversations between corporate innovation leaders and startups who are leveraging technology to develop products and processes that will succeed in the rapidly changing markets.
Register for Ahead of the Curve: Disruptive Innovation within Insurance
This month’s meetup, entitled Ahead of the Curve: Disruptive Innovation within Insurance, will be held at Aviva Canada’s in-house innovation lab, the Digital Garage.
The meetup will feature a panel discussion moderated by Aviva’s Head of Innovation & Digital Partnerships, Ryan Spinner. The panellists will be CEO of Planswell Eric Arnold, CEO of Humi Kevin Kliman, and Sr. Manager at Deloitte (Insurance Sector) Kelvin Lam.
Register your ticket for Ahead of the Curve: Disruptive Innovation within Insurance and learn from top insurance startup leaders. Use the promotional code CROWDLINKER for free admission!
There will be some great networking opportunities for anyone interested in learning more about the future of insurance. Refreshments and pizza will be served.