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RPC Insurtech in brief - November 2021

21 October 2021. Published by Neil Brown, Partner and Daniel Guilfoyle, Partner and Lauren Murphy, Associate and Marsha Williamson, Senior Associate

Welcome to the November edition from RPC of Insurtech in brief, providing you with a handful of snappy monthly updates from the industry.

Lemonade Car Launches in Illinois

Lemonade has announced the availability of its new 'Lemonade Car' product in Illinois, which is designed to use technology to make car insurance fairer and do right by the environment. 

Lemonade notes it will use telematics to help determine the number of miles driven, as well as how safely people drive. Using this technology, Lemonade seeks to provide greater discounts to low-mileage and safe drivers.

Lemonade's website states that using a combination of motion sensors and GPS signals, the Lemonade app can detect collisions in real time and help drivers get emergency services as well as 24/7 roadside assistance. 

The product is also said to focus on making the filing of a Lemonade Car claim efficient and fast, and assessing damage, obtaining repair estimates, and getting progress updates can be done through the Lemonade app.

In 2018, Lemonade announced that it will never invest in fossil fuels and other polluters, and Lemonade has stressed again its focus on doing good as a Public Benefit Corporation and a certified B-Corp. Lemonade Car aims to provide special rates and coverages for electric vehicles and hybrid cars, and plant trees to help clean up after its customers’ CO2. Lemonade will use personalized data collected by its app to calculate and track the CO2 generated by each of its customers’ cars and will then work with non-profits from around the world and fund tree planting to help compensate, over time, for these emissions.

Lemonade To Acquire Auto Insurer Metromile

Earlier this month, digital insurer Lemonade entered into a definitive agreement with pay-per-mile auto insurance start-up, Metromile, pursuant to which Lemonade will acquire Metromile in an all-stock transaction that implies a fully diluted equity value of approximately $500 million, or just over $200 million net of cash. Under the terms of the transaction, Metromile shareholders will receive Lemonade common shares at a ratio of 19:1.

Metromile has 49 state licenses, over $100 million of in-force premium and more than $250 million of cash on its balance sheet. It also has significant expertise using big data and artificial intelligence for car insurance. This is particularly relevant given Lemonade's recent launch of its 'Lemonade Car' product see story above. 

Concirrus acquires Spark Insights

Insurtech Concirrus has completed its acquisition of Spark Insights, a provider of decision analytics to the insurance market, for an undisclosed sum.

The announcements states that the acquisition brings together two companies with a shared vision of using AI, machine learning and data analytics for better risk selection, more efficient claims processes, and insurance product innovation

Concirrus supports the commercial insurance market by accelerating their transition to new digital operating models. In particular, Concirrus's big data and machine learning platform, Quest, accesses and interprets wide-ranging datasets, combining them with historical claims information to reveal the behaviours that correlate to claims.  

Spark Insights seeks to deliver predictive analytics to the insurance industry using innovative AI, machine learning and computer vision combined with satellite-based remote sensing and global earth observations.

Andrew Yeoman, CEO of Concirrus stated “The synergies with Spark Insights made this a compelling opportunity – both parties gain product distribution capacity and adding property and catastrophe response is a natural extension to our current markets.”

 Aquiline takes stake in insurtech Ripe

Ripe Thinking Limited (Ripe), a UK-based digital underwriting and insurance distribution platform, announced that it has entered into a definitive agreement for Aquiline Capital Partners LLC (Aquiline) to acquire a majority stake in the company.

Aquiline is a private investment firm with $6.9 billion in assets under management, specialising in investments at the intersection of technology and finance.

Ripe was founded in 1997 and is a leading insurtech business with more than 280,000 policyholders, protecting their specialised needs across golf, boats, caravans, and cycles, as well as providing insurance to small business owners such as personal trainers, musicians, and photographers.

Following this investment, Aquiline will work closely with the company’s management team to continue and accelerate the build of a market-leading digital insurance distribution platform.

Insurtech investments soars to record-breaking $10bn

Capital invested in insurance technology start-ups surpassed the US$10 billion mark for the first time in any one year on record according to the Willis Towers Watson's Quarterly InsurTech Briefing. 

The record-breaking $10.5bn was raised during the first three quarters of the year. Still with three months left to go, 2021 is now only $12 million short of the entirety of what was invested into InsurTechs globally in 2018 and 2019 combined. 

The total deal count was 421 which is also an annual record according to the same briefing. The latest quarter saw 113 deals yield more than $3.1 billion in investment, a 23% increase over Q3, 2020. It was the second-largest funding quarter on record.

These record-breaking statistics reflect the continued interest of venture capitalists in this space and a continued focus by businesses on the future of insurance.