Sønr’s chief executive outlines innovative way certain types of insurtechs are pulling in new business

The “next generation of challenger insurtechs” are invigorating new business models by seeking to attract customers who have “never bought insurance before”, said Matt Connolly, chief executive at market intelligence platform Sønr.

Connolly categorises insurtechs into two sub-divisions: ‘enablers’ that “help big insurance companies accelerate their transformation and innovation activity” and ‘challengers’, which provide full-stack propositions.

For Connolly, the “next generation of challenger insurtechs” present “a very interesting conversation around what’s taking place in people buying insurance”.

He continued: “What’s really interesting is this next generation of challenger insurtechs, where they’re acquiring customers not from a competitor - they’re acquiring customers who have never bought insurance before.

“They’re not stealing from the market; what they’re doing is they’re acquiring earlier and their ambition is that [these customers] are going to stay with [them] through that journey and then they’re not going to be going to competitors.”

The long-term result of this approach is that challenger insurtechs’ “competitors are going to see that decline in market, even though they’re not feeling it necessarily right now”, Connolly added.

Businesses using this method include Lemonade and Thimble – Connolly told Insurance Times that around 75% of Thimble’s customers, for example, had never taken out business insurance before.

Connolly attributed this, in part, to an “incredibly slick, efficient digital first experience”, for example the use of chatbots for onboarding.

Furthermore, this genre of challenger insurtech are also exploring potential coverage gaps to expand their propositions, Connolly noted.