On-demand commercial insurance. This week in insurance tech.
Last week, Amazon confirmed its rumored investment in Indian online general insurance provider Acko.
Acko currently offers traditional car and bike insurance policies, but is increasingly focused on ‘internet economy’ deals — e-commerce, travel, and ride hailing-focused products — such as an April in-trip insurance program with Ola. CEO Varun Dua, on the company’s new investor:
“The idea is to find some way to collaborate in the future. We’re a new age insurance company and [Amazon] believes it can create value.”
The investment has drawn headlines such as “Amazon coming to insurance?” and “Amazon’s next big insurance move”. Lets look at what’s really happening.
In its entire history, Amazon has made just seven fintech-related investments or acquisitions (out of more than 140 not including those made by the Amazon Alexa Fund). Six of these are in India, including recently mobile payments technology startup ToneTag and small business lending startup Capital Float.
One reason for the concentration in investment is competition from the likes of Alibaba-backed Paytm, but another is that, unlike other markets, India is still in the earliest innings of digital finance and digital commerce, more generally. Per Alibaba’s EVP Joe Tsai at last week’s Code Conference:
“If you look at India, we’re in the first inning. Total industry GMV for e-commerce (in India) this year is going to be less than $20B. China is close to $1T today. So very, very early days.”
Meanwhile, Amazon’s job listingsin the US instead continue to highlight its increasing focus on driving AWS adoption in insurance as more insurers transition to the cloud. Based on our new market sizings tool, the cloud computing market will soon grow past $100B, where Amazon’s market-leading platform benefits from massive barriers to entry.
Carriers look to improve (or obtain) agent technology:
Chubb launched a new digital platform to allow independent agents to quote, issue, and service small business accounts
Hanover announced a partnership with CoverWallet to allow independent agents to use the startup’s technology for the micro segment of its small commercial businesses
Startups look to gig economy:
Verifly launched on-demand liability insurance underwritten by Markel across five categories including professional services, construction, home & garden, events, and pets. Per founder Jay Bregman, “What we noticed was that the people who were drone pilots were also photographers, IT consultants, surveyors, roof inspectors. We got over 150 separate requests for this general liability product.”
Bunker partnered with Chubb to develop new insurance products focused on freelance workers
Jones raised $2.8M this week to launch a pay-as-you-go liability insurance solution
Direct writers are still very small or getting off the ground:
Berkshire Hathaway’s BiBerk wrote $6.4M in premiums in 2017, with the large majority coming from workers’ comp
Small business insurance MGA startup Next Insurance obtained its first carrier license Delaware with plans to obtain licenses in all 50 states
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