The insurance industry tends to be cautious, often slow to embrace new trends and technologies. Traditional brick-and-mortar insurance providers are giving way to modern companies taking advantage of the latest technology. Here, Affordable Healthcare 123 Tees looks at 10 startups that are upping the insurance game and leading the way to the new world of insurance.
1. Next Insurance
Next was founded in 2016 by former Hewlett Packard executive Guy Goldstein, who was inspired when he had problems getting insurance after he launched his Mintbills payments startup in 2007. Together with software architect Alon Huri and former Intuit engineering director Nissim Tapiro, Goldstein has crafted a selection of simple, inexpensive insurance plans for small businesses. The company has the backing of a bevy of investors, including Ribbit Capital and Redpoint.
When Steven Mendel founded Boughtbymany in 2012, he envisioned a company that would use the buying power of its customers to help get insurance policies for pets, shoes and other specific items that traditional insurance companies viewed as unimportant. Since then, the startup has also transitioned into offering insurance plans for travel and pets. The company recently completed a $19 million Series B funding round.
3. Oscar Health
In 2012, Kevin Nazemi decided to leave his job at Microsoft and launch a health insurance startup. The company sells insurance plans to individuals, families, and employers. Using a simple mobile app, users also have 24/7 access to concierge physicians. After initial investment from Thrive Capital, Oscar collected an impressive array of investors, allowing the firm to achieve a $1.5 billion evaluation in 2015.
4. Bright Health
While other startup founders have backgrounds mainly in the startup sector, Bob Sheehy spent most of his time working for United Healthcare, one of the largest insurance companies in the U.S. Using his experiences as the company's CEO and senior vice president, Sheehy founded Bright Health in 2015. By concentrating on Medicare replacement plans, the company has raised over $200 million from investors like Bessemer Venture Partners and Greycroft.
Before they came up with the idea for Ethos, Stanford alums Lingke Wang and Peter Solis launched a startup to help users sell their life insurance policies. In 2015, they decided to start another company that sells life insurance policies directly to customers without long waits or complicated medical exams. Ethos emerged from stealth mode in 2018, collecting more than $11 million from Sequoia Capital and Silicon Valley Bank.
American entrepreneurs Steve Pretre and David Friedberg hit on an innovative idea in 2011: car insurance costs based on how much the owner drives. The company's app also allows users to track their mileage and gas usage. The startup's innovative approach to automobile insurance has garnered it over $290 million in investments. In July 2018, Metromile completed a $90 million funding round led by Tokyo Marine Holdings and Intact Financial Corporation.
7. Root Insurance
While some auto insurance startups base their rates on mileage, Root Insurance offers policies that specifically reward safe drivers. Car owners who don't speed and follow traffic rules can secure cheaper plans through the company's app-based system. Root Insurance is currently using its $51 million Series C funding round to expand into New England and the Deep South.
Ami Daniel founded Windward in 2010. His goal was to use AI and analytics to predict risk to maritime vessels accurately. However, in 2016 the company decided to roll out analytic tools for insurance companies to analyze risk and process claims. Windward recently snagged a $16.5 million Series C funding round led by XL Innovate.
Varun Dua had worked for conventional insurance companies for years and even founded a life insurance brokerage firm in 2013. In 2017, Dua launched Acko, an online insurance startup that offers Indian customers policies for cars, scooters, motorcycles and mobile phones. Investors like Accel and SAID Partners raised $30 million for Acko in 2017. In 2018, the company received $12 million from Catamaran Ventures and Amazon.
Entrepreneur Anthony Miller is not a fan of coinsurance and deductibles, and his startup did away with these common expenses. Bind allows customers to pay a monthly fee and have their health costs covered. As new health issues emerge, members can add extra coverage. Lemhi Ventures and United Healthcare have funded the startup to the tune of $72 million.
As traditional insurance firms soldier along, often reluctant to adopt new technologies, insurance startups are revolutionizing the way customers use and buy insurance. From app-based accounts to custom tailored policies, these startups are reinventing the insurance sector for the 21st century.
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