What are the listed companies of American InsurTech (InsurTech) innovative companies?
“This article will share with you the latest four listed companies in the US insurtech sector.”
The fintech sector has developed extremely rapidly in recent years. Many excellent innovative companies have emerged in the fields of payments, loans, stock trading, insurance, etc., and many of them have become listed companies. Compared to other areas of fintech innovation, the level of attention received by insurtech companies has risen sharply this year. The reason may be that innovation in other fields has gradually matured, and insurance technology is still developing in the same way as payments or online loans about three years ago. Many innovative companies disrupting traditional insurance businesses are still in their infancy or have just gone public. I teach FinTech (FinTech) courses part-time at NYU, and I do many case studies with students every year. The author believes that insurance technology still has a chance of huge development in the next step. This article introduces the four newest insurtech companies listed in the US this year for your reference. Overall, investors are very enthusiastic about the insurtech sector, and the stock prices of these companies have been very strong since they went public this year.
1. Home Insurance Company Lemon Juice
Among the listed companies with US IPOs this year, the insurance technology company that received the most attention is probably Lemon Juice Insurance Company. The company is headquartered in New York City and was founded in 2015. In May, when the COVID-19 pandemic was worst this year, the company was listed on the New York Stock Exchange. Currently, the market capitalization is over 3.3 billion US dollars. I first learned about Lemon Juice Insurance because of NYU students. Last year in our fintech course, some students suggested that when they rent a house, they would buy home insurance with Lemon Juice for $5 a month. After some comparisons, we found that this company's premiums are far lower than average property insurance companies. Of course, this company's insurance business also has two major differences from other traditional insurance companies.
First, Lemon Juice Insurance does not have an “account manager” to handle policy purchases and claims services. All of the company's insurance business is handled through an artificial intelligence robot on a mobile app or website. It can be said that when Lemon Juice purchased insurance, there were no traditional documents, phone calls, and no agents. When consumers buy an insurance policy, Maya, an AI robot in the app, directly searches the real estate information database and completes the pricing and payment of the policy in about 90 seconds. At the same time, when a claim occurs, the app will also instantly compare the database and provide an immediate payment. Since Lemon Juice Insurance Company has no manual services, the company's operating costs have been greatly reduced, including human resources, including office expenses;
Second, Lemon Juice Insurance has an annual charitable reward. In other words, at the end of each year, the policyholder can donate to some charitable organization chosen by the policyholder according to the payment status of the policy, if there is a balance.
Lemon Juice's earliest insurance product was home insurance. It can be said that their business model completely disrupted the traditional American home and property insurance policyholder-insurance business model. As the company continued to grow after going public, Lemon Juice has begun to enter the life insurance and pet insurance fields. The company's business model is to build trust among home insurance policyholder customers and then explore the life insurance and pet insurance needs of these customers. The company's life insurance is also carried out through the AI robot Maya, and there is no need for human customer service at all. It can be said that if Lemon Juice becomes zero-insurance brokerage in the future, it will completely disrupt the current life insurance business model. The company is also currently expanding its business area, starting in New York, expanding to other states in the US, and beginning experiments in countries such as Germany, France, and the Netherlands.
II. Insurance Big Data Exchange Max
MediaAlpha (MediaAlpha), trading code Max, is an online advertising platform for the insurance industry launched in October this year. The platform connects insurance company prospects and publishers to help buy and sell vertical search media, including website clicks, phone calls, etc. It provides these companies with advertising management, advertiser data analysis, and insurance policy management reporting and analysis, and provides insurance policy services. The company was founded in 2011 and is headquartered in Los Angeles, California. The company is headquartered in Los Angeles, California, and currently has a market capitalization of 2.4 billion US dollars.
The main founding shareholder of Max is Hakusan Insurance. After listing, Hakusan Insurance still owns 35% of the shares. The company's stock price performed well after listing, and the stock price has nearly doubled in about a month. Its core competency is the use of artificial intelligence and big data to help insurers find customers online. One of the company's digital advertising platforms is actually an insurance big data exchange. Of course, after the outbreak of the coronavirus this year, traditional insurance marketing methods were interrupted, and in essence, the business growth of these innovative companies that carry out insurance business through online methods
3. Rookie Auto Insurance Technology Rookie “Root Insurance”
Root Insurance (Root Insurance) was established in March 2015. In 2018, it became the first insurtech startup outside the healthcare industry to receive unicorn status (valued at over $1 billion). Root Insurance Company was listed on the NASDAQ Exchange at the end of October this year. Underwriters are Goldman Sachs and Morgan Stanley. The current market value of the company is 5.6 billion US dollars.
Root Insurance currently provides car insurance in 30 states in the US. The company requires policy buyers to download its mobile app and perform test drives for weeks, while the company monitors driving behavior in the background. If the driver passes the driving test, they receive a premium based in part on the driving score calculated during the test drive. Gen Insurance's advertisement says that only insurers are insured to keep premiums lower than other insurance companies. Gen Insurance is also cooperating with Tesla Motors to provide Tesla owners with premium discounts on autonomous vehicle models. The company claims that it is currently the only car insurance company that adjusts premiums based on whether the driver uses autonomous or semi-autonomous driving modes.
IV. SaaS sector Yaxi Insurance Technology
One of the most popular sectors in US stocks this year is SaaS, or enterprise technology outsourcing service companies. As a SaaS platform for insurance companies, Duck Creek Technologies (Duck Creek Technologies) is naturally sought after by Wall Street buyer-seller agencies. Duck Creek Insurance Technology, headquartered in Boston, Massachusetts, was listed on the NASDAQ exchange in July of this year and currently has a market capitalization of 5.2 billion US dollars. The company's Duck Creek suite helps insurers develop and manage policy processes, supports payment and invoicing, and the entire claims lifecycle. The company's clients include Progressive Insurance, Liberty Mutual Insurance, American International Group, Hartford Insurance, Berkshire Hathaway Specialty Insurance, GEICO, and Munich Re Specialty Insurance.
Property insurance companies have always faced many problems such as poor technology, fragmented markets, and inefficient policy payments. The predecessor of Duck Creek was an insurance consulting team under Andersen Consulting. The team later became independent and focused on providing operational solutions for insurance companies. This year, due to the coronavirus outbreak, a large number of businesses have moved to SaaS companies, making stocks in this sector generally sought after. However, Yaxi Insurance Technology is the only Saas listed company in the insurance industry, so its stock price is extremely strong.
In summary, these four listed insurance technology companies each have advantages this year, and the places where they have innovated are remarkable. They cover property insurance, auto insurance, insurance big data, and insurance enterprise service companies. The extremely high market capitalization of these companies after listing also reflects investors' confidence in them. Of course, all four companies are currently at a loss stage. The next step is to gradually shift from disrupting the current insurance market to obtaining operating profits if they want to get higher stock prices. After a large number of companies in the US fintech industry went public in the past few years, traditional banking stock prices plummeted. Therefore, investors need to pay close attention to developments in the insurtech sector, including other insurtech companies to be listed. The traditional insurance industry is likely to repeat its mistakes.
