6 Well-Funded Insurtech Startups of the Year

By Insurance CIO Outlook | Friday, September 20, 2019

The opportunities for innovation in the insurance industry suggest that the mushrooming of Insurtech startups is not likely to wane soon.

FREMONT, CA: Insurance business across the globe is gaining momentum. Sources say that sustained economic growth, rising interest rates, and higher investment income have helped U.S. insurance industry remain amongst the top-ranked globally. Insurtech startups manage many niche segments of this market. According to market forecast to 2023, the global Insurtech startup market revenue, valued at $532.7m in 2018, is expected to reach $1,119.8m by 2023. The digital and analytical tools have opened this growing revenue model. Below is a list of US-based budding insurtech startups which can continue to expand relentlessly in the coming years.

• Oscar Health

New York-based Insurtech startup, Oscar Health is ready for its most significant market expansion in history with recently raising $375m in strategic funding. With this, the company will be active in 12 new geographies by 2020. Oscar's development proves its commitment to making health insurance easier by developing seamless technology and providing personalized support. Founded in 2012, it provides services for its members, from finding a doctor, processing a claim, round the clock doctor on the call service, to curating a network of first-rate physicians and hospitals. Oscar Health shares a unique vision of making affordable health insurance for its policyholders while engaging its customers with incentives.

• Root Insurance

Root Insurance—using smartphone technology to gauge driver behavior and price policies—raised $350 million on a $3.65 billion valuation in a Series E funding round in the previous week. This auto insurance startup founded in 2015 is set to transform auto insurance by leveraging technology and data to offer consumers lower prices, transparency, and fairness. The idea behind Root is unique, as it prices insurance primarily based on how insured drive. Its Root app can track data like braking, speed, driving times, turns, and consistency. Driving score is the top factor in its pricing, which is made with the help of driving record and credit history, among other factors.

• Metromile

Metromile offers a new type of insurance that charges customers based on the miles they drive, making it ideal for city dwellers and other low mileage drivers. Mileage is tracked through its device called Pulse that plugs into the car's diagnostic system, and monitors car health and tracks details of any accident, leading to faster claims settlements. With raising almost $300 million in its latest round of funding, the company credits success to its artificial intelligence claims system. This system can file first notice of loss, collect photos of damages, schedule repair shops, and even pay out the claim—all from the client's mobile device.

• Hippo Insurance

Hippo Insurance's latest round of funding has pushed it to the milestone of $100 million in value. The startup makes excellent choices for people's home insurance needs. It combines cost-effective yet great coverage, something that is not common when it comes to homeowners insurance. Hippo offers its policyholders the convenience to file claims over the phone round the clock. Beyond providing affordable homeowners insurance rates, this entrant does an exceptional job at delivering quotes quickly. The uniqueness of this company is that, while its competitors focus on fixing problems after the fact, Hippo seems to be creating solutions to prevent claims in the first place. This proactive spirit of Hippo is evidence of its thoughtfulness that is rare among other home insurance companies.

• Snapsheet

Snapsheet is a pioneering startup in virtual claims solutions enabling best claiming experience. Its unmatched technology and processes improve customer engagement and offer organizational agility to bring real transformational benefits for insurers. Launched in 2011 and based in Chicago, it acts as a white-label platform for both drivers and auto insurance carriers to validate and settle auto claims. Its innovative claims platform enables insurance carriers, consumers, and auto repair shops to re-imagine their claims process with the automation of manual loss adjusting, claims appraisal, and better customer service. It also provisions users to file and publish short vehicle damage reports with images. To date, Snapsheet has received $43.2m in funding, and its business model is based on a fixed fee.

• Groundspeed Analytics  

Insurtech startup Groundspeed—coupling computer vision, natural language processing, and machine learning—has already raised $30m in Series B funding. The company is dedicated to automating and illuminating commercial insurance analytics. It uses machine learning to harvest, enhance, and extract data that can improve margins, identify profitable pools of business, and enhance the client's customer experience. This budding startup's portfolio consists of solutions that enhance service, streamline compensation, enhance pricing, heighten market intelligence, and reduce costs and drive growth in property and casualty insurance market.

Venture capital funding for insurtech startups is currently experiencing a boom. As insurance companies adapt technologies, insurers see a wealth of opportunities to improve operating efficiency and customer experience. Meanwhile, insurance companies are actively scouting for insurtechs that can help them access the currently uneconomic markets by provisioning entry to niches. As a result, several new insurtech companies are mushrooming in the market. Startups providing solutions for insurance carriers are not new, but innovations in their underlying technology are yielding new approaches. According to the data from the FinTech Global database, the capital invested in insurtech startups has reached $3.18 billion worldwide. This makes the picture clear that insurtech startups are set to redesign the insurance industry landscape by applying technology to the entire processes of the value chain. 

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