An end to paper chaos: these insurtechs are cleaning up the insurance industry

hey are of particular interest to young people and primary insurers: Insurtechs. The main reason for this is that digital insurance offers can be accessed conveniently from home or on the move via an app. Saves time and effort. We present four business ideas from up-and-coming insurtechs.

First fintechs – now insurtechs?

Compared to the most successful fintechs, insurtechs still have some catching up to do. Startups in the insurance industry are about three years behind those in the financial sector, if the self-assessments of various insurtechs are to be believed. However, this does not mean that rapid progress is not being made in this area as well.


An end to paper chaos: these insurtechs are cleaning up the insurance industry


Digital insurance offers eliminate a lot of tedious paperwork. This is particularly well received by primary insurers. (Photo: piktochart)

Wefox – record holder with big ambitions

One of the most promising insurtechs is the Wefox Group. The Berlin-based company was founded by Julian Teicke in Switzerland in 2014 and launched there and in Germany a year later. Among other things, the insurance start-up made headlines at the beginning of March with a Series B financing in the record amount of 125 million US dollars.

Wefox plans to use the money to expand into other European markets first. Then, in early 2020, it plans to enter the Asian market – Japan is first on the agenda, followed by China.

The insurtech's offering consists of three pillars. Insurance brokers can use the Wefox platform to manage their customers' contracts. Wefox also offers liability and household insurance through its own digital insurance company ONE. Founder Julian Teicke, however, attaches the greatest importance to the nexus. The idea here is to help the customer by analyzing, for example, location data, etc., in order to find a better deal. Provide insurance quotes based on the situation. For example, if a customer is in a region where the crime rate is relatively high, he or she should be offered theft insurance. However, this offer is correspondingly more expensive, as the risk factor is also higher.


An end to paper chaos: these insurtechs are cleaning up the insurance industry


Wefox founder Julian Teicke raves about situation-based insurance offers – and also earns criticism for it. (Photo: Wefox)

This comprehensive data analysis has met with criticism from data protectionists, among others. That's why the data is to be analyzed by an independent third party in Switzerland. Accordingly, the insurtech only receives general information, for example that a person has entered an area where a certain insurance would potentially be beneficial. The service will initially be available only to ONE, but in the long term it will also be available to insurance partners.

Clark – digital insurance manager

Another rising star among German insurtechs describes itself as a digital insurance manager: Clark from Frankfurt. The start-up promises to put an end to confusing insurance paperwork. Existing insurance contracts can be easily digitized and quickly viewed via the Clark app. If desired, Clark can also request the insurance documents directly from the respective insurer.

In addition to managing existing policies, the app can also be used to sign new ones. A descriptive overview shows which insurances the customer already has – and which are still missing. At the same time, Clark also provides feedback on how important the respective insurance appears to be. You also receive a percentage indication of how in demand the respective type of insurance is in Germany.

The contracts are then constantly compared with other offers. If there are more favorable conditions or more comprehensive offers, you will receive a message. If you are interested, Clark will make you an offer, consisting of three choices each, between which you can decide.

Since its founding in 2015, the insurtech announced numerous collaborations and several successfully completed funding rounds. Among them on the Series B in April 2018, where Clark received 29 million US dollars.

Getsafe – from insurance manager to insurer

Getsafe from Heidelberg is also one of the up-and-coming insurtechs. In 2015, the start-up around founders Christian Wiens and Marius Blaesing also launched as a digital insurance manager. The two founders met online. Just one year later, however, in 2016, the insurtech realigned itself. Instead of managing insurance policies taken out with other providers as before, the founders decided to become an insurer themselves in the future. The company started with its own liability insurance, followed by dental and legal protection insurance. Since May of this year, the start-up has also been offering home insurance.


An end to paper chaos: these insurtechs are cleaning up the insurance industry


On course for expansion: Heidelberg-based insurtech Getsafe. (Photo: Getsafe)

According to its own statement, the company's primary aim is to make the insurance process and administration simpler and, above all, faster. Here, Getsafe invokes the use of artificial intelligence. However, this currently consists mainly of chatbots. These should help to process inquiries more quickly. This applies both to the conclusion of new insurance policies and to the submission of damage reports. The latter in particular should become much easier. In many cases, for example, it is sufficient to submit a picture of the damage instead of first having to make an appointment for an assessment.

However, it should not remain with chatbots. Getsafe plans to offer tailored insurance policies in the future through the use of artificial intelligence. Risk assessment based on occupation and marital status, among other factors, is often not accurate, they say. This could change through the use of AI. The technology is also expected to help combat insurance fraud.

Getsafe has big plans for the future. So far, the focus has been on expansion in Europe. In the long term, however, the company wants to be "the first unicorn in the InsurTech starry sky" become.

Friday – car insurance by mileage

Insurtech Friday is a subsidiary of the Swiss Baloise Group. The company offers car insurance. By default at a fixed price or optionally depending on the actual number of kilometers traveled. This works in a similar way to utility billing: First you pay an estimated price, then on the due date you prove how many kilometers you have actually driven. In this way, you can still get some money back when you settle up – or you can make additional payments.

In March, the company's parent gave them 75 million euros to help them get started. The money is to be used to add further insurance offerings. Friday also secured a further 39 million euros in the form of media services.

Digital insurers – Insurtechs compete with the big players

The insurtechs are not yet able to compete with Germany's major insurance companies, such as Allianz and Debeka. Still, the future doesn't look bad for the young companies. Digitization is also playing a growing role in the insurance industry. Instead of going to a broker, young people in particular prefer to carry out such tedious tasks from the comfort of their own home. It is therefore not surprising that insurtechs are particularly popular with this group.

  • From seed to Series A: We explain the financing cycle of start-ups to you.
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