Insurance is ripe for disruption, and given the conservative nature of the reigning carriers and large brokers, it is a fair guess that a lot of innovation will come from outside the industry. A few weeks ago, this article touched on how innovation is affecting the financial services industry, but the focus was very much on banking and investing. Today, we aim to expand on this author’s work by focusing on new entrants that are working on disrupting the insurance industry.
It is far too early to call who the big winner(s) will be, so we are not yet ready to crown an Uber of Insurance, but here are a few of the candidates that we think might be in the winner’s circle when the dust settles.
1. Zenefits: Founded in 2013, this cloud based HR management company shouldn’t be on a list of companies changing the insurance industry, but they are, because of their innovative approach to selling benefits. According to Forbes, they were one of the hottest startups in 2014 and look poised for success in 2015. Their focus is on the more than 5 million employers with less than 1,000 employees. They give the HR software away for free and make their money on broker commissions for health insurance sold through the software.
The benefits industry was blindsided by this model, and they are facing lawsuits in multiple states but assuming they survive them, they will be in position to upend the traditional way benefits are marketed. The software looks great, and they claim 10,000 companies with 100,000 employees are already using them. Whether or not they survive the legal and regulatory onslaught, we love their innovative free-software approach. It’s also interesting that they started in the Y Combinator startup accelerator. We expect more and more insurance and risk management startups to come from startup accelerators in the next few years as the tech crowd is waking up to the opportunities to disrupt our industry.
2. BizInsure: Founded and owned by San Francisco based broker Woodruff-Sawyer. BizInsurance brought in software from Australia to essentially automate the sales and service process for small commercial insurance. They started with professional liability and have since expanded to also offer BOPs. Their whole business model is based on being able to quote online, buy in seconds, and have a dec page in your inbox in minutes, all while retaining the ability to chat with a licensed agent by phone at any time for either sales or service.
They have been growing slowly by choice, only signing up the carriers who have made their system completely compatible so there’s no manual or overnight batch processes. They do have a decent stable of carriers available including CNA, Hiscox, Liberty International, Philadelphia, and USLI. It looks like they are now starting to push growth harder, and the question is whether they will be able to hit an exponential growth curve allowing them to disrupt how small business insurance gets sold.
via insnerds.com