Rakuten buys pet insurance co. Gusto growth. This week in insurance tech.
Hi there,
Back in 2000, both Swiss Re and Munich Re invested in an internet marketplace for the claims recovery and commercial salvage markets called SalvageSale. It was one of the first times either of the reinsurance giants invested in a startup.
A lot has changed since. In its November 2017’s Investor Day, Munich Re said it had struck partnerships with over 30 technology startups employing a managing general agent business model through its Digital Partners program.
Meanwhile, Swiss Re has spent the past several months in discussions with SoftBank about a possible multi-billion dollar investment with the possibility of strategic partnerships with SoftBank’s growing investment portfolio. Last week, Swiss Re said such an investment would be “unlikely to exceed 10%.”
Ping An, for example, is an insurer that has set up its own, offering a single customer portal allowing access to online units in healthcare, lending, auto listings, and more. Three of these subsidiaries raised a combined $2.2B earlier this year and are now preparing public listings.
Insurers have also looked to strike partnerships in this realm. See the language behind some of the recent announcements in the first quarter of this year:
One approach that seems a bit different though is platform players buying insurers, which Rakuten is doing. In January, the Japanese e-commerce company acquired Asahi Fire & Marine, a small player in Japan’s P&C market, for $415M. In March, the Japanese e-commerce company entered the pet insurance business by acquiring MottoGyutto Small Amount & Short Term Insurance Co., which specializes in coverage for family pets requiring treatment or surgery at vet hospitals.
Integrating its new insurance businesses into its ecosystem appears to be a natural next step. Last week, Rakuten launched a free, gamified membership program called “Pet-Wari,” which might be a start:
Gusto’s evolution
Less than six years ago, ZenPayroll, a cloud payroll service aimed at small businesses, launched to the public. Today, ZenPayroll is Gusto and the company has expanded its platform to include HR management and benefits including group life, disability, medical, dental, and vision coverage.
Small businesses on Gusto are small – the company previously disclosed that the average company using its services is 10 employees. But that base of small businesses has grown significantly. In March, the company said it had hit 60,000 small business customers in January (compared to 40,000 in September 2016).
While Gusto already offers pay-as-you-go workers’ comp insurance in partnership with AP Intego, it’ll be interesting to see if it looks to add other small business coverages over time.
We’ll be speaking with Gusto CEO Joshua Reeves at our Future of Fintech conference on June 19-21 in NYC to hear more. Save $500 by using the code FoFinsurance.
P.S. Our partner Willis Towers Watson is conducting a survey for investors in insurance-related startups. If you’d like to receive a report of the findings, sign up to participate here.
