Insuretech where insurance is now leveraging the advantages of technology is making insurance more personal rather than the old cohort-centric model. Insurance even today is complex for a retail individual to grasp its language, complex offerings, and disclaimers. Buying policies needs the help of advisors, and the credibility of these advisors tends to be low. New technology has the opportunity to provide low touch, online support, and customised offerings.

Is Insurance a risky business?

Insurance has and will continue to be a large contributor to the economy by helping organisations and individuals to manage their risks. Insurance means protection from a monetary loss against possible risks like fire, accident or burglary, or medical emergencies. The concept being the notion of the unforeseen that may happen in the future should be provided for financially through participating in a common risk pool.

Insurance is a transfer of risk to a third party

Insurance is the only business where the customer pays upfront with the contract that they will get paid back only under a certain set of conditions and this is called the “inverted production cycle”.

Insurers make profits mainly through good underwriting that means, by carefully selecting, costing, and pricing the risks. They price insurance based on a set of estimates of the future level of claims and expenses. The difference between the funds available received as premiums and the returns made through investing these funds against payouts is where the profits lie.  

Types of Insurance

There are three main types of insurance. Property/casualty, Life, and health insurance which includes products from private health insurers, as well as government programs.

Auto insurance:

Auto Insurance provides property coverage that compensates for theft or damage of the vehicle. It also provides thrid party liability coverage in case of expenses incurred for bodily injury or damages to a third party. It also provides medical coverage for the insured, co-passengers, and third party.

Small Business:

Small Business income insurance helps businesses recover from a disaster.  It provides income compensation as well as location shifts or temporary support.

Life Insurance:

Covers insurance for dependants, expenses in case of deaths and also use at savings which can be borrowed by the insurer in times of need. 


This is an income assurance contract in which the insurer gets a regular income at the maturity of the policy for an agreed period or till death.

Insurance Market Size

As per Swiss Re’s Sigma, world insurance premiums fell 1.3 percent in 2020, adjusted for inflation, to $6.3 trillion. Nonlife premiums grew 1.5 percent in 2020, adjusted for inflation, reaching $3.5 trillion. Life insurance premiums fell 4.4 percent, adjusted for inflation, to $2.8 trillion.  

Source: Swiss Re, Sigma Database

The insurance industry functions as a quasi investment source and has been a key driver of the economy. While their job is fundamentally different from investment and commercial banks they act as large investors in long run infrastructure and government funding, especially municipal bonds.

Whether it is private medical insurance or supply chain interruption for businesses, the pandemic experience has made people much more aware of the need for insurance protection.

Irina Fan, Head Insurance Market Analysis, Swiss Re Institute

Even though the insurance sector is large and one of the key sectors driving the economy it still has far more potential as a large segment of the population is still uninsured. With new technology, customised policies should help increase penetration. 

Source: Llyods Insurance

The Future of Insurance

Mckinsey’s study on the future of insurance states that products will be individual customer-centric than the cohort-centric model followed earlier with the availability of individual data online. The insurance selling process through agents and parties with incentives had contributed to the negative perception of insurance purchase. 

Source: Mckinsey

As technology helps the whole insurance experience better, there will be a fundamental shift in the way insurance underwriting is done. It will have a different experience in both customer acquisition and claims. To engage in this modern insurance acquiring process customers are increasingly willing to share their data in exchange for personalisation; today, six in ten consumers globally are comfortable giving their insurer personal details about their lifestyle, location, and other information in exchange for benefits such as premium discounts or accelerated claims processing.

Let us explore the different startups which are ushering in change over the conventional form of insurance selling and claim processes. These tech-driven startups are challenging the status quo to shake up large insurance players, who now are trying to either co-opt some of these startups are building their own.


1. Qover

Qover builds its own insurance products and makes them available in real-time through open APIs. Insurance-as-a-service is a 100% digital insurance offering that covers end-to-end requirements for simpler onboarding, claims management, and customer support. Deliveroo uses Qover to insure its 20,000 freelance riders in 7 countries. Making its products fully digital allows Qover to offer automated solutions that can be customised for companies in minutes with transparent pricing.

2. Zego

Zego has policies that are flexible pay-as-you-go insurance done on a mobile app which will then store the documents to be retrieved as and when a new policy has to be brought. The policies can be acquired and used only for the hours required like the ones in the gig economy. This is managed by monitoring real-time data. They offer even hourly policies for delivery drivers by analysing every aspect of the fleet and its drivers’ historic behaviour. This flexible policy reduces the cost of insurance as they don’t have to buy a long-term policy and can make do with a pay-as-you-go insurance.

3. Laka

Laka is a bicycle insurance company that’s powered by the community. The monthly fee is a share of all claims from people who join this insurance pool. Customers join without paying any upfront premiums. At the end of the month, Laka totals up all settled claims, adds their fee on top, and splits the bill on a pro-rata basis. Lesser claims reduce the cost for the entire Laka customer base. Customers can cancel their contract whenever they want and leave by the end of the month. Each customer’s exposure is capped at a clearly communicated level: the monthly premium has a maximum so that Laka’s customers never face bill-shock following a month with a lot of claims. Laka’s business model appears to be Sharia-compliant, which could be a game-changer for non-UK territories.

4. Zeguro

Zeguro offers cyber insurance for small businesses. By continuously monitoring their client’s digital assets they mitigate cyber risks for small businesses. It trains its client’s employees to help them avoid cyber security challenges thus reducing breakdowns and business losses. By monitoring cyber threats Zeguro is able to customise policies for the clients based on the potential threats for each business. Businesses can purchase an active cyber-insurance policy in as little as five minutes through a digital process without intermediary fees. 

5. Slice Labs 

Slice Labs is an insurance technology that provides on-demand, pay-per-use insurance. Slice started in 2015 with insurance products for the gig economy. They then rolled out their Insurance Cloud Services 2015 platform for other companies to use to their advantage. Users can select what type of property they would like to insure (entire or partial home, apartment or condo, and the provider they’re renting from e.g. AirBnB) and get a customised quote.

Slice provides on-demand home-share, cyber, and ride-share insurance that customers can order within minutes. Everything from insuring the property to issuing claims and providing all the necessary information is done digitally via chat and video clips.

6. Wrisk 

Wrisk’s mobile app enables customers to buy and manage multiple types of insurance in a single plan. Wrisk users get a personal “Wrisk Score.” This unique Wrisk Score helps their customers understand the things that impact their premium. It’s like a credit score, but for personal insurance risk. Wrisk’s customers see the information most insurance companies keep secret, which helps them understand the risks which impact the price of their cover.

Customers can manage their insurance seamlessly through a single app. They can add and remove things from their cover anytime, with immediate effect. 

Wrisk is flexible insurance that adapts to fit their customer’s life so they’re neither underinsured nor overcharged.

7. Lemonade 

Lemonade is a complete technology interface-driven insurance provider. The insurance purchase can be done by chatting with an AI bot which through its queries can personalise the policy and premium. The process is so smooth that Customers can be insured in 90 seconds and paid out in 3 minutes. In fact, automation is so strong that it holds the world record for the fastest claim: 3 seconds. It also believes in doing social good by donating the money that’s left after paying out claims is given to causes the customer cares about.

8. Shift Technology 

Shift Technology’s strength is in detecting fraud. It automatically detects networks of fraudsters in insurance. Its SaaS platform is used by over 50 insurers worldwide. Whilst working with an insurer in Asia, 80% of cases marked as potentially fraudulent by its technology were verified as such by handlers, with the AI becoming even better over time. Shift’s SaaS platform can be used by insurers on a pay-as-you-go model. Shift applies AI to every applicable step in the claims process, reducing end-to-end handling time from weeks to minutes while ensuring accuracy, reducing leakage, and protecting the bottom line. Once implemented, future maintenance, updates, and enhancements are deployed without any client intervention.

9. Tractable  

Tractable is a B2B tool that helps to settle claims quickly and efficiently by looking at photos of the damage and predicting repair costs. Its AI solution is able to assess damage to a vehicle based on images and instantly estimate the cost of repair without any human bias and at a lower cost than traditional people-led operations. Customers take a picture of the damage and send it to Tractable, which uses algorithms to generate the estimate.

Tractable has been adopted by top-10 insurers in Europe and the US who use it to fully automate their claims. Tractable’s AI review is cloud-based and API- friendly, so it integrates fully with insurers’ Claims Management Systems.

The new startups through advanced analytics, combined with digital and social tools, can provide a much more cost-effective way of reaching clients, and educating them about risk and prevention.

Through analytics tools and possibly AI we can deliver more information to the market, customised to clients, in a proactive way

Catherine Bishop, Head of Insurance Strategy and Data at RBC Insurance

My Take

Technology is breaking down a complex category like insurance by personalising it and making claims easy. As more consumers come on board, there will be a clear migration of value to the extreme ends of the value chain viz; the customer service end, where companies offering excellent onboarding and claim redemption services and the technology back end which will process the whole process quickly and effectively by using a combination of artificial intelligence and pattern identification through a large set of case searches. The work of actuary and underwriting will become quicker as intelligent codes will be able to scour through millions of records and arrive at an optimised solution that will ensure good customer pricing as well as profitable products for the insurance company. 

To achieve this lead, startups that are building this intelligence into their systems now and garner a large set of behavioural intelligence will be sought after by the front-end servicing companies. Companies like Qover, Shift Technologies which provide processes to identify frauds or slice labs which have built a cloud-based application to able to provide micro-insurance, short term insurance, etc. will capture a large part of the market. This is akin to Google building an immense data search intelligence in itself such that it today commands 9% of the search market.

While Shift and Slice, provide SaaS services which makes them even more appealing to Insurance service providing companies who can leverage these white label services and excel in ensuring good customer service while outsourcing the grunt work to technology. But my bet will be on Qover which offers insurance as a complete product to anyone who wants to offer customised insurance to sell as an independent product (like Vanberda), or to its employees (like Deliveroo), or even as an add on the product (like Immoweb)

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

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The author has over two decades of experience navigating, crossing channels, sinking, and floating across different retail businesses and various categories. He believes that the final game of any business is in getting its consumers to enjoy the whole process of pre to post-purchase moments, and a smart investor chooses businesses that consistently delivers these moments.


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