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The insurtechs are coming to get you! What to watch in 2021

In the world of insurtech, it is typical to make bold predictions about the state of the market and where it is headed. The fact is, however, that as the market matures investment in companies is becoming more concentrated and ‘trends’ are more long-term. This consolidation is beginning to drive an increasing amount of meaningful innovation in the sector, as innovative business models and technologies are scaled to meet customer demands.

There are those who continue to try to upend the insurance world, such as Lemonade, which now boasts over 1m customers in the US alone. Whether the uncertainty that currently dominates people’s lives helps or hinders these digital upstarts remains to be seen. There is an implied risk in going with a lesser-known provider, but these more convenient, engaging and purpose focused offerings do meet customer needs that have been highlighted by the pandemic. It will be interesting to see how this dynamic plays out as the year progresses.

As such, when thinking about what 2021 holds in store for insurtech, it seems more pertinent to reflect on those that are well placed to solve some of the biggest challenges the insurance industry will face in the months ahead.

A common theme across all of those I have highlighted is delivering greater flexibility for customers. Whether due to difficult circumstances or changing habits, being able to offer products that fit with people’s lifestyles, protect against existing and emerging risks, and deliver service to customers through the channels of their choice is going to be a key feature of success in the insurance industry.

So, here are my picks for three insurtechs to keep an eye on. Let me know in the comments below, or on Twitter, who you think is set for a successful year.

Commercial fleet companies Flock to connected vehicle insurance

Flock has been around the insurtech market for a little while now, having been founded in 2015. 

Its core focus has been insurance for drone pilots, a growing market as their applications for commercial and personal use continue to grow. In 2019 the business issued over one-million insurance quotes across 55 countries and Flock reported its risk intelligence saved customers 25 percent on their policy price. They have recently signed with Sompo International to develop new solutions for drone cargo deliveries and flying taxi passenger flights.

Flock is not simply interesting because of the growth of the commercial drone insurance sector. What makes Flock an interesting proposition is their use of real-time data to calculate risk. For their drone cover, factors such as local population density and wind speed are factored in to give accurate realtime cover suitable for individual drone operators or large-scale commercial businesses. This technology is now being turned to other lines of business.

In December of 2020, Flock launched two specialist policies targeted at the connected motor sector. Tapping into the already growing interest in usage-based policies, the new data-driven policies deliver greater transparency in the underwriting process and help Flock’s customers mitigate risk. Having features like risk mitigation will be crucial to remaining relevant to customers and adding value to their lives, and it is for this reason I think 2021 could be the year Flock begins to make its mark on the broader insurance market.

OCTO-matic flexibility for customers will fuel 2021 growth

Octo is a well established leader in the telematic and advanced data analytics space, partnering with insurers to help deliver flexible motor policies for customers. Founded in 2002, they have grown to over 6 million users, have over 267 billion miles worth of driving data, and have analysed 480,000 claims.

2021 will be interesting for Octo because of their capability to help insurers deliver usage-based insurance. The pandemic has fundamentally changed how people travel and how much they travel. As a result, policyholders are turning to flexible cover and Octo should be well placed to capitalise.

The demand for flexible insurance has typically been seen as the preserve of younger generations, but evidence suggests this is changing. Octo recently helped Canada’s CAA launch MyPace, the first flexible insurance offering in the country. Where was the highest demand coming from? Retirees and families with three or more vehicles.

With travel limited across Europe, and indeed in many parts of the world, it is inevitable that drivers are going to question the need for traditional insurance policies. This is going to be compounded by changing attitudes to ownership and the growing sharing economy. As insurers adapt to these trends Octo, and others like them, will be on the frontline of providing the seamless flexibility consumers are after. 

Gig economy cover demands full-time attention from insurers 

One of the biggest problems with the gig economy has been that regulations and services are poorly adapted to the specific needs of those working within it. This is perhaps understandable, given the relative novelty of this kind of work in comparison to other forms of employment. However, it is probably fair to say that the response has not been quick enough.

One company at the forefront of changing this is Zego. Founded by a Deliveroo alumnus in 2016, Zego provides usage-based insurance for gig economy workers. In 2019, Zego sold over 185 million hours of flexible insurance cover, which represents a huge level of growth.

The demand for flexible insurance for gig economy workers is only going to become more important. Our business landscape has been torn up by the pandemic and the way in which people work has been conclusively changed. Gig economy jobs are now growing in sectors beyond mobility or delivery, where they have typically been found.

For businesses, particularly the small and medium sized businesses that are the engine of the European economy, being adaptable to new economic realities means being nimbler. Staffing needs are already becoming more flexible and the gig economy is filling this void. Indeed, a report from AON, titled Gig Economy: Financial Security or Greater Control, found almost one in five (18 percent) of HR directors believe that 75 percent of their workforce will be from the gig economy by 2025.

Given the predicted and actual growth of the gig economy, closing the insurance gap for those that work in it is crucial for businesses and society. For that reason alone, insurtechs like Zego are worth watching.


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Keith Stonell

Keith Stonell

Managing Director, EMEA


Member since

19 Aug 2015



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This post is from a series of posts in the group:

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Customer acquisition, onboarding and engagement, underwriting and risk management, billing and claims – all these areas are being changed by the digital innovations. Digital Insurance Trends is a group for professionals who are interested in Insurance Technology, Fintechs, and Solutions Providers - as well as Global Industry Intelligence.

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