News in numbers

Verdict InsurTech gathers the most important industry news in recent times, including some startling figures

$50 million

American cryptography firm Curv has partnered with Munich Re to offer insurance coverage of up to $50m for digital assets in its Institutional Digital Asset Wallet Service.

This opt-in solution will offer comfort to customers as Curv will have the financial capability to compensate for losses of crypto assets.

A primary insurance carrier of Munich Re Group will underwrite the risk for Curv in the new partnership.

Further assuring its customers, Curv said that it has developed multi-party computation (MPC) protocols to sign blockchain transactions.

It abolishes any possibility of stealing digital assets from Curv’s Wallet Service with a single cyber breach or even through insider collusion.

Munich Re head of cyber innovation and services Ali Kumcu said: “The novel cryptographic methods deployed in Curv’s Institutional Digital Asset Wallet Service reduce the risks associated with holding digital assets.

“Their approach enables us to underwrite a policy that covers customer-controlled wallets in Internet-connected settings. We are delighted our partnership with Team8 got us connected with Curv to develop this solution together.

“For us, this is another proof point that this partnership is very valuable to all involved parties and that our commitment to build meaningful cyber solutions leads to such fruitful outcomes.”

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Insurers have urged the Insurance Regulatory and Development Authority of India (IRDIA) to allow them to acquire a 100% stake in insurtech start-ups in India.

Existing rules prevent insurers from acquiring more than 10% stake in insurtech start-ups due to which they are unable to access the propriety software developed by these companies.

Many insurers are still using legacy software at the back end and are unable to compete with tech-savvy firms as they leverage technology in various areas of their operation from fraud detection to cross-selling of insurance plans.

Max Life Insurance CEO Prashant Tripathy said: “We want to buy all 100% in insurtech companies, which align with our business.

“We, as an industry, have made a presentation to IRDAI to allow us to own 100% in these companies.”

Earlier, IRDAI said that it is working on creating a regulatory sandbox to support insurtech in the Indian landscape.

The regulator also commented that use of wearable/portable devices for the purpose of underwriting a policy must be tested in the sandbox environment or on a pilot basis.

Apart from building digital platforms, the insurance companies are using technology to prevent fraud during underwriting and for assessing risk.

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£2.5 million

Insurtech start-up Urban Jungle, focusing on helping “generation rent” gain insurance, has raised £2.5m ($3.3m) in a seed funding round.

The funding came from new and existing investors such as Rob Devey, ex-CEO of Prudential UK, and Simon Rogerson, CEO of Octopus Group.

Urban Jungle wants to cater to the growing number of UK renters, or generation rent, that have been underserved by the insurance sector.

As a result, it offers pay-as-you-go policies, commitment to transparent pricing, and modern policy terms. It is currently rated 9.6/10 on Trustpilot.

Founded in 2016 by Jimmy Williams (CEO) and Greg Smyth (CTO), the firm now has more than 15,000 customers.

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$30 million

OneDegree, a Hong Kong-based insurance technology start-up, has raised funding under its “A2” round to accelerate the launch of its online insurance platform.

The latest round is part of Series A round initially started in September last year, when the company secured $12.7m.

With the latest funding, the company so far has secured a total of $30m.

The A2 round was led by investment firm BitRock Capital and also joined by Cyberport Macro Fund, Cathay Venture and investors from its initial Series A round.

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BRL100 billion

Caixa Economica Federal, the Brazilian government owned bank, has started scouting for partners for its insurance business Caixa Seguridade Participacoes.

The bank is looking to clinch insurance deals before the listing of Caixa Seguridade Participacoes.

The Brazilian state-owned lender aims to raise approximately BRL100bn ($25.27bn) though the sale of assets it owns or manages.

Caixa Seguridade is looking for partners for four units consisting of car insurance, residential insurance, premium bonds and the sale of quotas for acquiring real estate, pools vehicles and other products.

It was reported that the partnership will be for 20 years and will come into force from February 2021.

Caixa plans to have up to three insurance companies selling car insurance using its network of 4,170 bank branches.

Additionally, Caixa plans to establish a joint venture partnership to sell residential insurance, premium bonds and consortia products. The partner will own 50% of the new JV’s common shares and 25% of its economic rights.

According to Caixa Seguridade, the three new companies will provide products to the bank’s 93 million customers besides outside consumers.

In order to be eligible for partnership with Caixa, Brazilian companies should own minimum $300m in shareholders’ equity while overseas firms are required to hold more than $1.5bn.

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$40 million

Cyber insurance specialist Coalition has completed a $40m funding round to further expand technology platform to help small and midsize businesses mitigate their cyber risk.

The funding round was led by Ribbit Capital with participation from Greenoaks Capital and Hillhouse Capital.

New funding, according to Coalition, will be used on its global, internet-scale data platform that assesses hundreds of millions of data points to assess organisations’ risk within minutes.

Coalition noted that it will expand its global platform to deliver cybersecurity risk management tools to any organisation free of cost.

The company said that the fund will also be invested to hire engineering and incident response experts over the next year.

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The other big insurtech stories:

Discovery Central Services launches credit and debit card

South Africa-based insurance provider Discovery Central Services has teamed up Aconite to launch credit and debit cards.

Through its digital-only Discovery Bank, Discovery has begun to issue EMV debt and credit cards. The move is part of Discovery’s expansion outside of insurance services to become a fully-fledged banking provider.

Aconite has provided three aspects of this development:

  • Aconite Payment Application Manager: EMV card issuing, card lifecycle and key management;
  • Aconite PIN Manager: electronic PIN capture and distribution, and
  • Aconite EMV Transaction Manager: EMV transaction authentication and post-issuance control of EMV cards, including PIN changes and risk management.

Jérôme Frey, programme director at Discovery, said: “We are delighted to have reached public launch of Discovery Bank after an intense period of development, integration and implementation. Aconite’s EMV product suite provided a stable platform on which to base our card issuing operation and the team’s experience and expertise was an important contributor to our success in achieving this goal.”

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Smoking increases life insurance premiums more than high fatality rates

New research states that unhealthy habits, such as smoking, have a larger impact on life insurance premiums than a higher risk of fatality.

According to MoneySuperMarket, smoking adds £152.76 a year on average to life insurance premiums. In addition, smokers across all occupations pay 54% more for life insurance. On average, this totals to £13.82 per month for all types of life insurance policy.

In contrast, the agriculture, forestry and fishing industries, which have the highest accident and fatality rates, only have the 11th highest average premium. They pay an average of £27.58 per month, despite there being 123% more accidents per 100,000 workers than average.

A smoker in a relatively safe industry, such as finance and insurance, will still be paying significantly more (£40.84) a month than a non-smoker in a more dangerous industry, such as construction (£25.35).

MoneySuperMarket data states that farmers and builders are paying £18,277 and £17,559 respectively on life insurance over the course of a lifetime, lower than perceived ‘safer’ jobs such as TV and theatre producers and IT consultants (£24,149 and £19,066 respectively). This is despite farmers and builders seeing the highest number of fatalities since 2017 (29 and 38 respectively).

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Tesla partners with Markel to launch insurance programme

Elon Musk-led automotive and energy company Tesla has partnered with State National Insurance Company, a subsidiary of Markel, to roll out a motor insurance product.

State National Insurance is expected to act as a fronting company for the product. Most of the risk of the insurance product will be reinsured by a third party.

The latest news follows a recent announcement by Tesla CEO that the company is working to introduce a new car insurance product.

The insurance product will be offered to drivers of Tesla’s autonomous cars.

Depending on the level of autonomy of the vehicle, Tesla vehicles equipped with an autonomous feature option will be eligible for credits based insurance.

It is widely speculated that the company will leverage its Autopilot system to drive down policy costs for drivers.

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Majesco & Capgemini sign alliance partner agreement

American insurance technology firm Majesco has signed an alliance partnership agreement with IT major Capgemini for insurance business transformation.

As per terms of the contract, Capgemini will act as the implementation partner for Majesco Life & Annuity (L&A) and Group Core Suite for insurers operating in the life, worksite, annuity, group, and voluntary benefits market.

Capgemini chief innovation officer for insurance Seth Rachlin said: “Disruption is creating unprecedented growth and innovation opportunities in the insurance industry.

“Customer expectations are moving insurers rapidly to a new generation of digitally superior insurance which requires continuous innovation to acquire and retain customers, introduce products faster, improve efficiency, and reduce costs.”

Additionally, Capgemini in collaboration with Majesco will offer business and systems transformation capabilities as well as implementation, integration, conversion, and testing services to group and individual insurance firms.

Further, Capgemini will offer its insurance expertise, ecosystem, and insurtech partnerships to an upcoming L&A and group platform with Majesco.

Majesco CEO Adam Elster said: “The L&A and Group insurance market is undergoing rapid innovation and transformation that demands modern core solutions underpinned by strategic partnerships that enable implementation in months versus years.

“Our relationship with Capgemini will bring business and technology transformation and systems integration expertise to our customers to achieve speed to value.”

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Lloyd’s invests in AI-powered commercial insurance start-up Layr

Lloyd’s of London has invested around $150,000 in artificial intelligence start-up Layr, which focuses on commercial insurance products for small businesses.

The insurance giant made the investment after testing the American start-up’s cloud-based commercial insurance platform in Lloyd’s Lab, its insurtech innovation lab.

Lloyd’s Lab welcomed a second cohort of 12 insurtech start-ups last week. Layr participated in the first cohort of the innovation lab.

Layr, which was founded in 2016 in the US, tested its cloud-based solution at Lloyd’s Lab for providing faster access for small businesses looking to purchase liability insurance.

The insurtech company said that it will use the money to further develop its product.

Additionally, Layr is also looking for potential distribution opportunities with several Lloyd’s syndicates.

Layr’s platform side-steps carriers’ APIs and instead leverages its proprietary price and appetite prediction engine to match business with the right policies.

The US start-up uses AI and machine learning to compare an applicant against clusters of similar small businesses.

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