September 10, 2019
Over the past two years, we have witnessed the rise of a new trend in insurance: on-demand coverage. Such solutions help individuals avail insurance products on a pay-as-you-go basis, rather than for a standard time period. Additionally, these platforms help individuals avail insurance products for the sharing economy, for instance, car sharing, home sharing, etc. This way, customers only pay for insurance when the asset is actually in use and ‘at risk.’
However, what is the core problem on-demand coverage is meant to address? Generally, if someone wants health insurance, car insurance, or home insurance, they take out a policy which operates by virtue of the purchaser paying premiums to the insurance companies on a monthly or annual basis. With on-demand insurance, here’s the key advantage: people will have the freedom to insure themselves for shorter time frames whenever they want and wherever they need. In other words, people will have the right to pay premiums when they want and not pay premiums when they do not require them.
This week, we’ll take a look at some of the startups in insurance that are providing innovative solutions for on-demand coverage:
Metromile (Funding: $293 Mn)
Metromile offers a pay-per-mile car insurance model and uses data to optimize how they use their car to provide instant access to detailed vehicle diagnostics via the driving app. In 2018, Tokio Marine Holdings Inc licensed Metromile’s Connected Intelligence Platform, which leverages AI to provide insights into a customer’s lifetime value and improves their claims journey by integrating targeted data throughout their lifecycle.
Friday (Funding: $126.5 Mn)
Friday is a part of Basler Versicherungen Luxemburg AG which provides a usage-based insurance platform for car owners. It provides premiums based on miles traveled and also offers discounts on insurance. It recently added a new feature called “Add-On Protection for Drivers.” Friday provides digital car insurance; it claims to be one of the fastest-growing InsurTechs in Europe. The company became popular for developing cloud-based insurance and innovative for offering users with the number-per-kilometer tariff – customers can purchase the insurance cover starting at 1 cent per kilometer. The pay-per-kilometer of Friday is targeted towards low-driver, second-car drivers and customers who like flexibility and fairness.
Trov (Funding: $98.8 Mn)
Trov is reinventing insurance for the mobile generation by making it simple, flexible, and transparent. With the introduction of the world’s first on-demand, micro-duration insurance platform, Trov gives people the power to insure just what they want, exactly when they want, and that too entirely from their mobile device. The Trov app also helps people easily organize important information about the things they own and back it up to the cloud, so it’s accessible when needed. In April 2016, Trov announced a $25.5 million Series C funding round led by Oak HC/FT, with participation from Suncorp Group, Guidewire, and existing investor Anthemis Group. Trov launched in Australia in May 2016 and will roll out in the UK later in 2016, before launching in the United States and other regions in 2017. Trov is headquartered in the San Francisco Bay Area.
Zego (Funding: $51.7 Mn)
Zego provides an online platform to purchase on-demand car/motorbike insurance to the delivery drivers. Users can get them insured for the time they are delivering the goods/products. Zego offers insurance on a per hour basis and starts its premium from £0.65 per hour. Both the vehicle and the riders are insured. Both SD&P (Social, Domestic, and Pleasure) and H&R (Hire and Reward) insurance is available.
Slice Labs (Funding: $35.5 Mn)
Slice Labs is an online platform that provides pay-per-use insurance for the on-demand economy. Users can avail these on-demand insurance products from their smartphones and are directly billed to the user’s credit card. It also offers a cloud-hosted, end-to-end, digital-first platform that enables insurance companies to deploy insurance products for the new economy, thereby providing an in-depth deeper customer engagement. Slice product offerings include, Home share: Offers insurance for homeshare hosts like on platforms like Airbnb and Homeaway); Rideshare: Enables users to insure their cars & themselves and their profits against liability, uninsured motorist, personal injury protection (PIP), vehicle damage, loss of use, and loss of income option. The Slice platform helps insurance carriers with various functions like pricing, ratings, licensing, underwriting, servicing, and capacity.
Sure (Funding: $23.1 Mn)
Sure is a US-based on-demand insurance platform that provides Episodic life insurance coverage to users during their travels. The life coverage can be bought up to one year in advance till the time of flight departure. It further offers an AI-powered robo-broker that assists users in finding the most suited insurance product as per their needs.
By Miles (Funding: $7.76 Mn)
By Miles is an InsurTech startup that offers insurance to drivers by the mile. The customers are charged a fixed annual fee to cover their car while parked and are also billed on a monthly basis for the number of miles driven. It focuses on drivers who drive less than 7,000 miles a year. It provides a Miles Tracker which can be plugged into the car; it enables the user to measure the miles they drive. The drivers are not charged if they travel more than 150 miles in a single day.
VOOM Insurance (Funding: $7 Mn)
VOOM Insurance is an Israeli startup that offers telematic-based on-demand insurance for mobility products like drones, e-scooters, boats, motorcycles, etc. VOOM offers an end-to-end InsurTech platform to cater to the entire insurance value chain – from risk analysis through policy management all the way to the end customer.
Verifly (Funding: $6.9 Mn)
Verifly is an on-demand drone insurance app for recreational and commercial users. The app draws a quarter-mile circle around users, analyzes information from the startup’s proprietary geospatial & weather databases, and shows the user's estimated risk.
Flock Cover (Funding: $2.8 Mn)
FlockCover is an InsurTech startup that offers on-demand drone insurance for drone pilots. The insurance policies are underwritten by Allianz. It provides coverage for commercial and recreational pilots that can be tailored to each flight through the Flock app. It has developed a big data-driven risk intelligence platform for drones. It offers Flock Cover, a pay-as-you-fly insurance mobile app that enables drone pilots to insure flights for a minimum duration of one hour. The platform aggregates data like hyperlocal weather conditions, proximity to high-risk areas, population density, etc., in real time before the flight. The platform then analyzes this data, and couples it with other parameters like the weight of the drone to estimate the risk of the drone flight.
Jones (Funding: $2.8 Mn)
Jones empowers contractors to get on-demand liability insurance within a short period, thereby enabling contractors to overcome the hurdles of liability insurance. The company has been instrumental in supporting independent contractors, managers, builders, and even real-estate owners to obtain A-rated, carrier-backed liability insurance across the United States. It lets contractors enjoy the flexibility and freedom of pay-as-you-go schemes with an easy-to-use interface. It offers automated insurance checkup and offers pay-as-you-go liability insurance for vendors, thereby enabling them to bid for construction jobs and projects.
Cuvva (Funding: $2.63 Mn)
Cuvva has launched a car insurance app that enables the user to sign up, get a quote, and buy cover in less than 10 minutes. Cuvva offers a pay-as-you-go car insurance model for infrequent drivers in the United Kingdom. Car owners will pay a flat monthly fee – about £10 to £30 – to cover the basic fire and theft element of the insurance. Additionally, they have to pay some extra charges for each hour they drive the car, which is purely based on risk and ranges from £1.20 an hour and up. The company aims to help the drivers with up to 70% of the cost of an annual premium, often saving drivers between £500 and £1500 a year.
Tapoly (Funding: $0.38 Mn)
Tapoly is an InsurTech that offers on-demand insurance for freelancers, sole traders, contractors, home letters, equipment lenders or others who are part of the sharing economy. The app provides short-term insurance to users that are tailored as per their needs. They primarily focus on providing on-demand insurance products for the gig economy like gadgets & equipments, travel cover, car lending, cycling cover, home letting, and professional indemnity.
Poleecy (Funding: $0.33 Mn)
Poleecy offers temporary insurance which covers the main sectors: travel insurance, home insurance, crypto policy, visa policy, capital goods policy, policies temporary car insurance, and transport in general. It allows users to compare prices and features of different insurance companies to offer affordable policies for them. It leverages blockchain technology that allows them to store all data about purchased policies safely. The platform also provides affordable policies depending on the users' location.
Wilov (Funding: $3.6 Mn)
Wilov’s niche product offerings target customers who do not drive their cars regularly. The insured has to pay for every 24 hours each time he takes out his/her car and roughly averages at 1 euro. Additionally, the user has to pay a monthly fee of 20 euros. To trigger the counter, users simply have to install a connected badge in his vehicle and connect it to the Wilov app on his/her smartphone.