RPC Insurtech in brief - August 2021
Welcome to the August edition from RPC of Insurtech in brief, providing you with a handful of snappy monthly updates from the industry.
YuLife raises $70 million to expand 'gamified' life insurance
London start-up, YuLife, has raised $70 million at a valuation of $346 million. The deal is reportedly one of the largest Series B fundraises by a European insurtech.
YuLife seeks to reinvent life insurance by combining life insurance policies with gamification. Its app aims to incentivise and reward users to focus on their physical and mental wellbeing. Users can collect "YuCoins" as they complete challenges in the "Yuniverse" and compete with other users. The platform also offers third-party products and discounts via an affiliate model.
Currently, YuLife sells its product directly to employer organisations, who in turn provide it to their employees. Notable customers include Co-op, Capital One and fellow fintech, Curve.
With 10x growth in the last year, YuLife is capitalising on lifestyle trends and an increased focus on employee wellness. This is a trend that looks set to continue with attention on future working environments in the wake of the Covid-19 pandemic.
Ethos raises $100 million and hits $2.6 billion valuation
Ethos, the US online life insurance platform, has raised $100 million from Soft Bank Vision Fund 2. The funding increases Ethos' valuation to $2.6 billion and comes just two months after its $200 million Series D raise (covered in our InsurTech in Brief June 2021 edition).
The company says the fundraise was unsolicited and it will use the funds to double its employee headcount by the end of the year.
Ethos has reportedly grown its revenues and user numbers by 500% compared to a year ago and is on track to issue $20 billion in life insurance coverage this year. This significant growth is in keeping with rapid growth across insurtech and fintech in the past 18 months, as the 'shift to digital' accelerates across the financial services sector.
kin sets sights on NYSE listing
kin has combined with Omnichannel Acquisition Corp, a special-purpose acquisition company (SPAC), with a reported combined enterprise value of $1.03 billion.
kin is a direct-to-consumer digital insurer in the US focussed exclusively on the home insurance market. It aims to provide easy and affordable homeowners' insurance via its proprietary digital platform and specialises in catastrophe-exposed products (for example, hurricane and wildfire insurance).
Alongside the business combination deal, kin is also set to acquire an inactive US insurer with licences in more than 40 US states to fuel kin's expansion. The parties aim to close both deals and list the combined entity on the New York Stock Exchange (NYSE) by Q4 this year (subject to regulatory approvals and other conditions).
The deals come hot on the heels of kin's $80 million Series C financing in May 2021 – demonstrating the opportunities for insurtechs who can successfully combine technology, scalability and low customer acquisition costs in consumer markets.
Alleged data security breach by US insurtech, Backnine
The US insurtech, Backnine, has reportedly suffered a data security breach and alleged to have exposed details of insurance applications containing sensitive personal data.
Backnine is a software provider to insurers helping them to sell and maintain life and disability insurance policies and also provides a white-labelled quote web form to financial planners.
Leading tech media company, TechCrunch, has reported that hundreds of thousands of insurance applications were exposed after one of Backnine's Amazon cloud servers was misconfigured and publicly accessible. TechCrunch claims that the accessible documents included contact information, Social Security numbers, medical diagnoses, lab and test results, driver’s license numbers and personal signatures.
No public announcements have been made by the company or US state or federal data protection regulators (at time of publication of this blog). This is a reminder that the risk to data security does not only come from external cyber threats. Ensuring that robust internal processes are in place is an important part of mitigating the risk.