The newest of the new insurtechs — firms that include Lemonade, Ladder, and Fabric — have moved into the space that targets narrow segments of consumers. The latest one, a new company called Jetty, based in New York, is targeting city-dwellers specifically with low-cost property and contents coverage, as well as affordable renters’ insurance.
Jetty launched in Pennsylvania, Illinois, Georgia, New Jersey, and Florida, with further expansion scheduled throughout 2017. Jetty plans to differentiate from incumbents and other insurtechs in a number of ways. Many of Jetty’s products and services broadly resemble those already offered by other insurtechs and incumbents, such as: Property owners’ and renters’ insurance; contents insurance; add-ons for valuables such as artwork and jewelry; and renters’ services (including lease guaranty and security deposit replacement services). However, Jetty has two diversifiers working in its favor, according to research from the Business Insider:
- Policy applications, purchases, and claim-filings can all be done online. This gives it an advantage over incumbents’ processes which are often bogged down by paperwork-heavy processes and legacy systems.
- It offers its users discounts and offers from retail startup partners on products such as food, beverages and housewares, as well as home services — necessities which all come with a high price tag in large cities. Jetty says these deals are designed to promote customers’ engagement with their insurer as well as reducing the cost of urban living. It adds that it plans to add more retail partners going forward to further improve these customer benefits.
The global insurance industry is worth nearly $5 trillion, and the insurtech boom is putting insurance companies at risk of losing marketshare to these new entrants. These startups are leveraging new technology and a better understanding of consumer expectations to increase efficiencies in the insurance industry. Some are helping incumbents deliver better end products, while others are directly competing with legacy players.
Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on insurtechs that looks at the drivers behind the increasing number of insurtech companies, how they are helping or disrupting legacy players in the insurance industry, and where legacy players are innovating off their own backs.
Here are some of the key takeaways from the report, according to Business Insider:
- The opportunity is currently biggest in the US and Europe. That’s because these regions have large, very mature insurance industries.
- Insurtechs’ products and services mostly target retail customers. This includes small businesses and consumers.
- Most insurtechs are acting as enablers. This means that they offer products and services that help insurers and reinsurers improve their processes and better serve customers.
- Of the main players in the insurance industry, brokers are most at risk of disruption. This is because insurtechs can easily replicate their services and are solving historical industry problems faster than legacy players.
- Legacy players are also innovating. In particular, insurers and reinsurers are investing in insurtechs and fintechs working with relevant technologies. At the same time, they are improving their own direct-to-consumer digital interfaces, increasing their disruptive threat to brokers.