Investor-backed online P2P insurance startups help online insurance buyers pool into groups for eventual discounts on their policies.
Lemonade’s $13M seed deal, the largest Sequoia Capital has participated in recently, delivered a high-profile boost to the small but growing group of startups operating in the online peer-to-peer insurance space.
Broadly, online P2P insurance startups to date including Guevara, Friendsurance, and Inspeer have essentially acted as as brokers, with the aim of making insurance cheaper for consumers by pooling policyholders together online in small groups so that over time those with low claims gain discounts on carriers’ policy premiums.
Lemonade is the first to publicly launch as an actual online P2P carrier, announcing that it has applied to be a licensed insurer in New York (this means it can underwrite and offer policies itself).
Given Lemonade’s high-profile fundraise, we rounded up who’s who among insurance tech startups in the online P2P space.
|New York||Lemonade plans to launch as an online P&C insurance carrier built around a yet-to-be announced P2P business model. Lemonade has applied to be a licensed carrier in New York.||Carrier||$13M seed from Sequoia Capital & Aleph|
|Germany||Friendsurance pools its users into small groups and gives its customers a cash-back bonus at the end of each year they remain claimless for retail products including private liability, home contents, and legal expenses insurance. Friendsurance operates as an independent broker in Germany with ~60 domestic insurance partners.||Broker||Investors include Horizons Ventures, VantageFund and e.ventures|
|UK||Guevara pools friends & trusted acquintances or adds users to existing groups of 5 or more for car insurance. Premiums of those members then go toward covering the group, with future discounts given to those with low claims.||Broker||Investors include Mosaic Ventures|
|InsPeer||France||InsPeer allows users to form small groups of family members with exposure limited to €100 pledged to cover claims for any one user, and €1,500 across the platform to reduce auto, motorcycle, and homeowners insurance premiums. InsPeer takes a 10% cut from each claim paid.||Broker||None disclosed|
|PeerCover||New Zealand||PeerCover allows users to join or create a group and pay a fee upfront. If claims are judged to be fair by the peer group, users can receive up to 3 times the users’ balance to cover their claims.||Broker||None disclosed|
|China||PeersMutual Protection claims to be “redefining mutual insurance” in China.||Stealth||None disclosed|
|Bought By Many||UK||Bought By Many works with insurers to develop policies and negotiate discounts for users with long-tail insurance needs (e.g. pet insurance for rescue dogs, health insurance for cyclists) and earns money through commissions. It had over 118,000 members at the end of 2015.||Broker||None disclosed|
|Chicago||Founded by Lending Club alums, Uvamo is a stealth marketplace startup, which claims to be “bringing the P2P marketplace model to insurance.”||Stealth||None disclosed|
Photo Credit: Friendsurance
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