While the pandemic has hit the insurtech sector hard, some insurtechs have still managed to prosper, Insurance Times reveals its top five that have blossomed or gone bust as a result of the pandemic
From funding issues to going bust, insurtechs have had a rough ride during the pandemic, having to shift business models to meet the “new normal”.
Meanwhile, others have seen business booming like Bought by Many which saw pet insurance sales soar over lockdown.
But how have insurtechs faired during the pandemic? Insurance Times finds out.
In March, Coverly announced that it was making some redundancies in its Liverpool offices as part of a restructure by Bibby Financial Services (BFS) – its parent company. This in stark contrast to what it had planned at the start of 2020. In January, Coverly had plans to expand its product range and an ambition to become a virtual insurer.
BFS said at the time that “Coverly requires further cash injection in order to grow. In early 2020 we began to look to the external market for this investment. Since the outbreak of coronavirus, we have been unable to attract the investment needed in order to support the business’s growth.
“In line with our ’Focus and Grow strategy’, BFS has decided to focus our efforts on our core invoice finance and foreign exchange businesses, where we have a greater ability to support SMEs during this challenging time.”
With the property market taking a hit during the lockdown, insurtechs that focus on property seemed to be affected as a result.
It originally launched back in 2018 shaking up the home insurance sector by allowing its policyholders to create a digital inventory of their home contents that can be updated via an app.
Back in April, its managing director Charlotte Halkett left to join Bought by Many later that year in June.
Pikl also decided to refocus, the specialist insurer in the sharing economy announced it was refocusing after the airbnb and short term rental market saw a dip in sales in spring by 90% due to the need for people to social distance and lockdown in the UK not being lifted. However it later launched an MGA under a new partnership proving it can innovate.
Contents insurer Brolly was bought by Direct Line Group (DLG) for an undisclosed sum during July, in what the DLG hinted would be one of many “inorganic partnerships” in its H1 financial results. The deal is expected to close in the third quarter.
Brolly was founded back in 2016 by Phoebe Hugh who left Aviva to start her own insurance company with the aim of making cover more personalised and affordable.
At the time of the DLG deal, Hugh said: “I’m thrilled to be taking the next step in this journey that will allow myself and my team to scale the technology and products to a much bigger audience.”
Last year in August Brolly launched a new Hiscox-backed flexible contents product named Brolly Contents, which is aimed at customers who rent or own a property and have up to 40,000 worth of belongings to insure.
2. Bought by Many
Lockdown in the UK has meant more people working from home in a bid to mitigate the spread of coronavirus, and because of this many people have considered getting a pet.
This is what Bought by Many found, the insurtech saw an uptick in new customers taking out pet insurance policies during this period, suggesting that the pandemic has made customers more aware of the protection that insurance gives their pets.
Bought by Many’s chief executive and co-founder Steven Mendel told Insurance Times: “We recorded a 194% increase in new pet insurance policies during lockdown, compared to the same period last year – it’s clear those who were on the fence can now see a future where they have more time to dedicate to a pet and no longer have to worry about leaving them home alone.”
This was not the only insurtech to profit from this line of insurance however, US based Lemonade made an entry into pet health insurance in July after seeing a lot of success int the market. The insurtechs shares doubled after its Initial Public Offering (IPO) on the first day of trading at the beginning.
1. By Miles and Zego
Pay-per-mile insurtech By Miles saw its policies soar during lockdown as drivers on UK roads used their cars less and therefore wanted a more a flexible insurance policy as many were working from home, driving less and taking shorter trips.
Oliver Baxter, head of brand and product at By Miles told Insurance Times: “We have seen our biggest ever sales weeks in April and in May. Pay-by-mile policies are obviously resonating with the UK driving public, during lockdown I think people can see more than ever the value in a flexible way of paying for their car insurance.”
”In uncertain times, it makes even more sense to pay for insurance only when you’re actually using it,” Ed Leon Klinger, chief executive at Flock said. ”So it’s no surprise that those insurtechs offering pay-as-you-use offerings have seen a spike in interest. Putting flexibility and fairness at the heart of the offering is proving extremely attractive for customers, in both personal and commercial lines.”
Zego has been leading the charge on insuring the roll-out of e-scooters for the government’s trial across the UK, but it also noticed the growth in home deliveries over the pandemic and partnered with global telematics firm ABAX in a bid to drive down the cost of insurance for fleet owners influenced by this change in demand. It also expanded its van fleet partnership with RSA in May.
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