September 3, 2019

Market disruption for insurance

Innovative thinking and new technology has real potential to drive market disruption for insurance. This month there is evidence that this disruption is starting to happen. For example, my personal favourite is the interview with the CEO of Lemonade, the American property and casualty insurance company. If you have half an hour I urge you to listen to the podcast, ‘disrupting the insurance industry with AI’. Other examples of disruption include Honcho, a company that is turning the insurance quote and buy process upside down and Brolly with their approach to customer loyalty. Finally, it appears that the team at Tesla have plans to become an Insurer. We have given more details of these stories below, together with more positive news from the world of insurtech. Insurance continues to be an exciting market.


Financial Conduct Authority (FCA) Regulation Round Up

  • Fair Pricing in Financial Services: The FCA have developed a fair pricing framework that comprises of 6 questions. In particular, the FCA have issued this framework to deliver transparency around their approach to fair pricing in retail markets.

Other Compliance information

  • Legislation for disabled and those on long term sick leave: The Department of Work and Pensions (DWP) is part way through a work and health consultation aimed at creating healthier workplaces. The DWP are especially interested in the impact of their proposals. Consequently, a recent press release from the Government, “Government urges employers to help transform sick pay” encourages responses to this consultation in particular. The deadline for feedback is 7th October 2019.

Technologies in focus:

Artificial Intelligence

  • Lemonade: This half hour interview with Daniel Schreiber, the cofounder and CEO of Lemonade, Disrupting the Insurance Industry with AI, delivers some interesting insight. In particular, the conversation includes details of how the company has integrated AI into behind-the-scenes processes, including regulation, feature development, and production.
  • The role of AI in regulatory compliance. AI offers the ability to process large volumes of data with speed and accuracy can potentially transform regulatory compliance. This is according to a Forbes article,  Why Regulatory Compliance Can Be Complicated And How AI Can Simplify It. In conclusion, Naveen Joshi argues that the use of AI in regulatory compliance will come as a welcome respite for the businesses.


  • Honcho: A Durham based company has launched a reverse-auction marketplace app which requires insurers to bid against each other in real-time for customers. This will introduce real market disruption for insurance if the approach takes off. This article in the Express, New car insurance service forces firms to compete for you to get you the best deal, describes the approach as ‘revolutionary’.
  • Insurtech funding: Current facts and figures on the insurtech market are supplied by Reinsurance News in the article Insurtech funding rises nearly 280% in Q2. In summary, the attraction of insurtech investment has not yet waned.
  • Trov: In our July insight edition we reported that Trov would cease its On-Demand consumer offering in the UK at the end of September 2019. This month saw the headline, InsurTech platform Trov has announced a partnership with Lloyds Banking Group.  As a result of this move Trov have demonstrated their new distribution strategy. Namely working in partnership rather than ‘going it alone’
  • Brolly: A new launch, ‘Brolly Contents’, is designed to challenge the traditional way of offering home insurance. Another example of market disruption for insurance. For example it offers a loyalty discount of up to 25% that increases each month you stay with Brolly and haven’t made a claim.
  • Lloyds Lab. Lloyds continue the focus on technology with the third cohort of the Lloyd’s innovation accelerator program. This giant of the insurance market has chosen 11 insurtechs from a short list of 24. All of the chosen companies will begin work on a 10 week program by 2nd September 2019.    
  • Insurtech trends. This KPMG publication ‘Insurtech 10: Trends for 2019’  is worth reading. There is little doubt that most of these trends will carry forward into next year.

Other insurance topics in the spotlight last month:

Insurer News:

  • Tesla plans to move into insurance: Tesla is in the early stages of entering the insurance market. To begin with, the electric car maker will act as a broker in California. Forbes have published an interesting article, what does Tesla’s tentative move into car insurance mean for this sector? Their parting question, “Could Tesla’s entry into the insurance sector prove a game changer?”

Mergers and Acquisitions

  • i-pipeline: i-pipeline is to be acquired by Roper Technologies. Although the i-pipeline headquarters is in Pennsylvania, it has a firm foot hold in the UK with locations in Bromley and Cheltenham. It will be interesting to see if there is a change of approach as a result of this change of ownership.
  • Legal Insurance Management Group (LIM): AmTrust International buys Legal Insurance Management Group. This purchase by AmTrust is designed to see LIM compliment the existing AmTrust subsidiary, Ark Legal Assistance. As a result of this deal. AmTrust have taken another step towards their vision to be a leading speciality commercial property and casualty insurer.
  • M&A activity: According to an article from The Actuary, Insurance M & A Activity hits a four year high. Quoting a report from the law firm Clyde & Co, there were 222 M&A deals in the first half of this year.