I'm delighted to share the inaugural edition of our "Six Startups to Watch" list, drawn from the 929 insurtechs we now track at our Innovator's Edge site. These six have the potential to change the game. Even though I have followed innovation long enough to know very well that most startups fail, all six are attacking major problems in smart ways, so, even if they stumble, they should teach us something important.
Without further ado, the six are:
RiskMatch. It provides an online platform to help intermediaries match a customer's risk with the most appropriate carrier. This approach can lead to important efficiencies, at a time when it's clear that insurers need to take a whack at costs. Potentially even more interesting: Once RiskMatch optimizes its ability to size up risks, does it have to send all the business to carriers, or might there be alternative capital sources that could carry the risk, as is happening in reinsurance?
RemedyAnalytics. At a time when health insurance is so much in the news in the U.S., it's worth watching to see if companies such as Remedy can attack the underlying issue: that care costs far too much. Remedy uses technology to sort through the maze of prescription costs and benefits for employers and find the right medication at the right cost for employees.
GAPro. One of the things that puzzles me about insurance is that, in its native form, it's as digital an industry as there is, yet companies insist on taking all the data from its natural habitat in computer storage and in the cloud and turning it into paper (or, at best, PDFs). Companies then spend an inordinate amount of time and money exchanging those pieces of paper (or PDFs), even as the information in them becomes more and more outdated. Why not just leave the data in its native form and provide access to up-to-date information the instant it's needed?
That's the approach GAPro takes. It is initially focusing on doing away with certificates of insurance in favor of what it calls "verification as a service," but it has broad plans to provide pipes that will let the insurance ecosystem share data, not pieces of paper. This will be a hard slog. There are lots of pipes to be created to loads of sources of data. But I have to believe that GAPro's answer is the right one, and it seems to be furthest along the "verification as a service" path.
RightIndem. This U.K.-based startup is a sharp example of what's being done in claims to both reduce costs and to speed the process for customers, while reducing the hassle. RightIndem provides self-serve claims tools to policyholders and gives them a simple, digital way to track the progress of their claims. Artificial intelligence can make automated decisions and set claims costs, while spotting fraud and giving a robust reporting and analysis tool to claims managers. (You might also look at MotionsCloud, a German startup with a similar approach.)
Driveway Software. It claims to "cure car accidents" by using drivers' smartphones to monitor their behavior and to coach them toward safer habits. Given that the recent trend toward increased road fatalities (after decades of declines) stems largely from distracted driving, often because drivers are talking on their phones or are texting, it seems only appropriate to try to use the phones to improve driving. I also believe that insurers will increasingly need to focus on using their knowledge to prevent accidents, rather than just to price risk as intelligently as possible, and Driveway taps into that trend. (You might also keep an eye on Smart Drivinc, an early-stage startup that uses sophisticated technology to tell who's driving and to shut off that person's smartphone—and only that person's smartphone—while the car is in use.)
Coastal Risk Consulting. It takes the most sophisticated approach to flood risk that I've seen. The company uses LIDAR to map precise elevations within neighborhoods, for instance, so it can tell which homes in a danger area are especially vulnerable and which might be far safer than traditional analysis suggests. The company also helps insureds understand how they can mitigate their risks—perhaps by putting electrical equipment on a raised platform—and how the dangers will likely increase as climate change raises the level of the oceans in coming decades. Given that the National Flood Insurance Program is up for renewal this year by the U.S. Congress, Coastal Risk's thinking may find its way into the public debate. I hope it does.
We will publish a list of "Six Startups to Watch" each month. Please send along any thoughts about those on this list, about others we should keep an eye on and about ways we can make this list more useful.
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Paul Carroll, Editor-in-Chief