Would you buy insurance from #GAFAM? 🔎 Techstars Insurtech Digest - Issue #116 is out! Insurance start-ups face credibility crisis, Insurers want agents to benefit from digital too and more

“Forget everything you know about insurance,” was the brash tagline on a banner adorning the New York Stock Exchange when Lemonade went public in July 2020. The message captured the confidence that propelled the US insurance start-up and its peers, including Hippo and Root, on to the stock market at valuations far above those of more established peers.

The self-styled disrupters had a beguiling pitch to investors: our technology can track risks in real time; cut the number of insurance claims by anticipating incidents such as leaks; and speed up the processing of paperwork. The result, they said, was businesses that would ultimately outperform older rivals.

But two years on from its Wall Street debut, Lemonade, along with Hippo and Root, are among the biggest casualties of a brutal rout in tech stocks, as rising interest rates prompt investors to ditch high-growth companies in favour of those that generate reliable profits.

Read the full story on the Financial Times here.

Disintermediation isn’t positive for the industry, and agents’ and brokers’ roles can evolve. As more insurance back-end processes become digitized, and thus more streamlined, agents can focus more heavily on providing excellent customer service and support agent-customer relationships.

Climate change is significantly impacting people and business. Insured natural catastrophe losses have increased by 360% within the past 30 years. It has upended traditional coverage, underwriting and investment dynamics as policyholders seek protection and peace of mind. Insurers need to position themselves to generate deeper customer trust and offer personalized solutions tailored to individual needs.

Wefox would be nearly doubling its valuation from last year, when it raised $650 million in a Series C round valuing the company at $3 billion. Wefox has carved out a different niche in the insurtech space, opting to distribute its insurance policies through a network of agents rather than hawking its products directly to consumers like some other startups. Munich Re AG backs Wefox’s policies with reinsurance coverage and also provides know-how and infrastructure.