Sønr has just released the 2021 100 Insurtech Report in collaboration with EY.

“But it’s no ordinary listing. It is borne out of months of work by the Sønr team, researching, analysing, and connecting with tens of thousands of companies around the world, which are then meticulously scored by a set of world-class industry experts. For me, it comes at a particularly interesting time for insurance. The insurtech market is maturing, as is their positioning and relationship with incumbents.”

Matt Connolley CEO Sonr

This is a valuable set of research for incumbent insurers, full-stack insurtechs and insurtechs intent on partnering with incumbents to maintain or improve their competitive advantage. For all planning strategies to maintain competitive advantage, innovate and anticipate disruption it is one of many essential research sources.

Lessons for all types of insurer just looking at one example- BoughtbyMany that ranks #4 in the Sønr list, is rated #1 insurer by Which Magazine for delivering the best pet insurance measured over various criteria: -

• Ease of Application Process (Quote & Buy) 5/5
• Policy Clarity 5/5
• Communications 5/5
• Transparency of Charges 5/5
• Reasonably Priced 5/5
• Overall score 75%

Direct Line was a close 2nd with 70% and the largest insurer by GWP, Petplan by Allianz scored 66%

Co-incidentally, Altus has just published its 2021 DigitalBar for Pet Insurers showing which ones are really deploying digital transformation best.

Source Altus DigitalBar

Which one has the highest digital maturity?

BoughtbyMany! When diverse, authoritative sources point to the same conclusions you know you are onto a narrative.  

It has invested in the technology to deliver best in class from Quote & Buy and MTA through eFNOL and Claims tracking backed by collaborative video consultation with vets and triage of claims with pet owners, vets, and insurers. We know its customers benefit from automating payments of vet’s bills. Happy owners, happy vets and well cared for pets.

Petplan has more gaps in its digital transformation of pet insurance- maybe that is why it scored 9 percentage points less than BoughtbyMany in the Which Survey.

It is a shame that DigitalBar did not survey Direct Line as you can see it has digitally transformed its pet insurance across these categories from Quote & Buy & MTA to eFNOL and claims tracking. Probably be in the 2022 survey.

Here is the lesson I believe BoughtbyMany tells.

Whilst Pet insurance is generally far simpler than home/property and auto it is very relevant to the high volume, low value accidental damage claims in home and motor. Of course, pet claims may involve third party liability, personal injury claims or cause auto accidents so complexity will arise.

Claims platforms like BoughtbyMany will automatically validate the claim is covered in the policy document wording and is current, so the vet has only to confirm the injury/illness, treatment, and cost for the insurer to agree payment less deductibles up to the agreed cover limit.

This is an ideal case for modern, agile quote & buy platforms and claims management platforms. Automation has a strong part to play backed when there is by the technology to help the claims adjuster validate and manage claims.

BoughtbyMany has triumphed to deliver world-class customer satisfaction, effectiveness, and efficiency. But any incumbent can achieve the same as they are no longer limited by inflexible, costly to transform and maintain core systems.

If the policy admin & Quote & Buy is rooted in old technology HUGHUB for one will take care of these. Maybe that is why Verisk made a strategic investment.

If the claims management system lacks eFNOL, claims tracking, automated communications and video consultations combined with triage orchestration of pet owners, vets and insurers PaaS claims Synergy delivers the missing functionality for an incumbent insurer.

360Globalnet, RightIndem, Snapsheet, Claims Technology and others can provide a digital wrapper around the moribund core systems.

Better still, there will be no Capex, one-off costs and the PaaS/SaaS licensing is transaction based meaning the incremental costs can be offset by KPI and financial improvements to deliver positive returns to the bottom line within the first year. Much easier to make the business case, use Opex budgets and prove effectiveness, improved customer satisfaction and return on investment.

The API architecture and integration capabilities mean they will combine with those aspects of the core systems you need e.g., if you want to use your own payments systems or in the case that these are slow consider automated payments from a technology partner like Imburse. Really a best of all worlds is within your grasp.

These PaaS solutions mean insurers can choose that key gap in their own offering and make the changes fast and cost-effectively. They need not face disruption over time by BoughtbyMany and face potential relative decline by a thousand cuts as new competitors capture profitable niches of business.

No one says incumbent insurers will go out of business, but they can suffer relative decline unless the bridge the gap between inflexible core systems and new, agile platforms offering constant improvement benefits. They can do this across all lines of business and not just one. Too often they run out of money, capacity, stamina and probably resolve to approach the C-Suite again after having g just transformed auto or home insurance technology.

Now they can get the best of both words but if they do not, they may suffer perpetual relative decline. Pet insurance, like auto and home, is a cut-throat business with consumers predominantly buying on price. Mintel describes the challenge.

“One of the challenges for the pet insurance market is to increase the customer base. According to data from the ABI, in 2020 subscriber numbers increased by just 1%, despite the growth in pet ownership. Ensuring pet insurance remains attractive to consumers is an ongoing challenge. Consumers continue to be price-sensitive, seeking out the best value options and weighing up the benefits of self-funded pet healthcare. Higher claims costs also squeeze margins, placing upward pressure on margins. Insurers will have to find the right balance between profit margins and premiums, so they don’t limit uptake among potential customers or price out existing ones.”

Mintel 2021.

These challenges are the same as those in other personal lines of insurance and insurers can address them effectively with the platforms described above.

Most offer the fashionable “no-code/ low-code” benefits which mean that workflows, processes, and products can be customised, and constant innovation implemented without having to depend on the vendor’s own developers and consultants. Or expensive systems integrators. Insurers can offer a uniform customer experience across all kinds of perils and claims so that customers are encouraged to buy multiple products rather than spread insurance over many companies.

So, whilst we have focussed on pet insurance, I propose that the lessons are applicable to all lines of business. Amazon has a far simpler business model to insurance and does not offer the personal engagement essential for non-routine product buying and claims. But it is a superb selling machine and logistics operation that makes customers expect the best online experiences from insurers backed by professional advice, empathy, and support when things go wrong, and lives need putting back to normal.

These new PaaS/SaaS technology partners enable insurers to combine the robust core system capabilities with effective, efficient customer service to compete with BoughtbyMany, lemonade & Metromile, Hippo- you name them. And one of the most valuable benefits is that insurers can now start where they need, deliver short-term benefits, and still achieve long-term goals step-by-step. No longer do they need to take a stab in the dark, commit to core platforms after POCs that do not prove capability at volume production levels but just light-weight minimum viable products. So often these fail to deliver.

Couldn't help but include this picture from Programology courtesy of Ralph Aboujaoude Diaz 

Insurers can go to product to production volume fast and if the platforms fail to deliver terminate. That puts the onus on the vendors to ensure they will meet the requirement, can commit the resources, and deliver successful outcomes. Skin in the game by vendor and insurer with the ability to test outcomes and prove success fast and at low risk.

That is my lesson from these credible sources of information.

Sønr Hello, and welcome to the Sønr Insurtech 100 – a compilation of the leading startups, scaleups and innovators driving change across insurance.

Altus DigitalBar

And here is my usual summary of some of the insurtechs that can help drive innovation in partnership with insurers.

Major core insurance platforms Guidewire, Duck Creek, EIS, Majesco, ICE, Pega, Innovation Group and so on. Good on breadth of functionality but sometimes lacking in specifics e.g., claim management. And traditionally involving Capex and high annual licensing costs though that is changing with Duck Creek

Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, iptiQ that enable an insurer to allow a customer to interactively manage all their policies from one dashboard

Digital Claims Platforms Synergy Cloud, RightIndem, Snapsheet, ClaimsGenius, Salesforce Industries, Five Sigma, 360Globalnet, Claims Technology etc

Home Ecosystems Providers: CoreLogic, Verisk

Auto Ecosystems Providers incl. telematics data exchanges: Verisk, Lexis Nexis Risk Solutions, Mitchell International, CCC Intelligent Solutions and Arity

Point Solutions: Weathernet, Tractable, Audatex/Solera, Shift, Friss Sprout.ai, Solera and many others

Telematics Service Providers: Octo, IMS, True Motion, Cambridge Mobile, Vitality Drive and The Floow

Shared Mobility Systems: Uber, Lyft, Enterprise CarShare, Zipcar, Car2go, GIG, Turo, Getaround

Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.

No-Code/Low-Code app building platforms from Unqork, Netcall…

Embedded insurance Wrisk, Qover, etc

Further Reading:

Motor insurer digital maturity, touchless auto claims and customer satisfaction

Home Claims, Industry Challenges and the role of Technology discussed at 'I Love Claims' Conference

Hippo and Root the real winners over Lemonade & Metromile? Or incumbent carriers?

Innovation, home insurance digital maturity and customer satisfaction ratings