We've had so many insurtechs fill out Market Maturity Reviews, providing detailed insights about themselves at our Innovator's Edge site, that this month's Six Startups to Watch will highlight the most interesting newcomers among the more than 1,000 startups we track. Here they are:
—Understory. The company is setting up networks of inexpensive weather stations in cities to provide information to insurers about what is actually happening on the ground, rather than what satellite images suggest is happening. (I saw the value of this last October, when my wife had to pull off to the side of the road in an early winter storm in Truckee, CA. She called to ask about the progress of the storm, and I assured her that satellite images showed it was raining in Truckee and only snowing nearer to Lake Tahoe. She promptly sent me photos showing two feet of snow on the ground and a near whiteout in "rainy" Truckee. For once in our marriage, I learned I was wrong....) The company set up its first network in Kansas City and recently expanded to Dallas, Fort Worth, Houston, Denver and St. Louis. Each network consists of 50 to 150 sensor-filled stations spread around a metropolitan area at schools, churches and other sites where Understory rents space. Insurers get immediate information on, say, a hail storm and can contact customers immediately afterward if they are likely to have damage—pleasing customers, who are unaccustomed to having an insurer look out for them, while repairing damage before it can get worse.
—Wellthie. This insurtech began by sorting through the complexity that is Obamacare, making it easier for insurers to show how their offerings fit within the new structure and for brokers and their clients to find the best coverage. Wellthie now addresses health insurance more broadly, focusing on packages for small business.
—Edgepoint Digital. Based in Tanzania, this company provides health insurance for as little as $1 a month. That is not a typo—a dollar sign followed by a 1, followed by no zeroes. The coverage, aimed at families that earn some $70 a month, requires extraordinary efficiency in processing, based on the M-pesa mobile money transfer system that has taken hold in Africa. Edgepoint, whose offering is called Jamii, has received backing from the Gates Foundation, among many others. Edgepoint is worth a look both for the social good it could accomplish and for what it may show about a concept called "reverse innovation," or "trickle-up innovation." The idea is that not every idea has to begin in the developed world and migrate to the developing world. In fact, when it comes to cost-effective solutions, ideas can begin in the developing world—you may be more likely to find radical innovation if you start by thinking about families earning $70 a month than if you start with those earning the U.S. median of $52,000. Reverse innovation has already happened with refrigerators, medical equipment and other products. Maybe insurance is next.
—ElevateBenefits. It seems that comparison sites don't need to limit themselves to products and prices. This startup provides a way to compare brokers, too, for employee benefits, through its brokerSpotlight tool. Competition is everywhere these days.
—Instanda. The product development cycle in insurance has historically been measured in months, not weeks, and certainly not days. But the pace of innovation in an industry depends on cycle time for product development—how quickly a product can be generated, tested and revised or tossed aside. Regulation will always limit speed in insurance, as it should, but product development can move far faster than it does now, and Instanda provides a tool that can greatly speed the process.
—Bold Penguin. The portal allows the insurance agent and carrier to streamline the quoting, binding and servicing elements of policies, an area of major friction for not only them but also for clients. The company—which teamed up in April with Ask Kodiak, which has a tool that matches clients with carriers interested in their sort of risk—aims to move placing commercial insurance to digital, paperless processes.
Paul Carroll, Editor-in-Chief