A tenth of all companies that have achieved unicorn status in the global fintech space are insurtech start-ups, making the sector among the industry’s strongest players, the latest data from the Centre for Finance, Technology and Entrepreneurship (CFTE) has revealed.
Of the 280 fintech firms that have crossed the unicorn line to date, 28 have played major roles in either enabling innovation or disrupting the current insurance industry model, according to the London-based educational platform’s Fintech Unicorns Hub. The majority of these companies are based in the US and the UK.
The US accounts for almost two-fifths of the world’s insurtech unicorns, leading distant second placer the UK, which has five of the sector’s billion-dollar start-ups. Overall, insurtech rounded up the top five sectors in the fintech industry with the greatest number of unicorn companies, trailing paytech, wealthtech, cryptocurrency, and challenger banks. Other sectors in the financial technology ecosystem include blockchain, regtech, open banking, and buy now, pay later (BNPL) financing.
The US is the global leader when it comes to the impact and number of insurtech companies shaping the current insurance landscape. To come up with the list, CFTE gathered data on real-time market capitalization from Google Finance, and compiled news articles and press releases for information about the companies. Its website provides a link to these resources.
The institution cautioned, however, that the rankings were designed “first and foremost [as] an internal tool, so [it] will have its limitations.” It added that some companies were not included because of lack of public valuations.
At present, the US is home to 11 insurtech start-ups that have crossed the unicorn line, according to CFTE’s data. The list below is arranged by market valuation.
Market valuation: $4 billion
Reference date: April 2021
Year established: 2016
Headquarters: Palo Alto, California
Next Insurance is working with retail giant Amazon through Business Prime to provide small businesses with an online platform where they can access a range of insurance products. The insurtech unicorn offers policies across several industries, including beauty, cleaning, construction, entertainment, and fitness. Among the company’s coverage areas are commercial, general and professional liability, errors and omissions, workers’ compensation, and auto insurance.
The California-based start-up has raised $881 million over six funding rounds, the last from a Series E financing in April 2021, pushing up its current market value to $4 billion. Next Insurance also made its first acquisition last year, purchasing Juniper Labs as part of its plan to launch Next Labs, which uses Juniper’s open data and machine learning-powered underwriting tools to help the company deliver more scalable products. In October 2021, the insurtech firm also acquired digital insurance agency AP Intego, allowing it to launch Next Connect, an embedded insurance product for SMBs.
Market valuation: $3.2 billion
Reference date: March 2021
Year established: 2016
Headquarters: New York, New York
Healthcare fintech start-up Cedar uses advanced data science to customize and simplify the medical payment experience by providing patients with a “consumer-friendly” way to plan and pay their bills. In an interview with industry news website Fierce Healthcare, co-founder Florian Otto said the firm’s goal is “to modernize the medical billing process and remove pain points for patients around confusing, difficult billing, and administrative processes.” The company serves more than 300,000 patients across 36 health systems daily.
In May 2021, Cedar announced its entry into the insurance market with the acquisition of San Francisco-based insurtech start-up OODA Health. In a statement, Otto said that by bringing together Cedar’s capabilities in the provider space with OODA Health’s payer-integrated offering, “the company [becomes] uniquely positioned to solve many of the problems that often lead to poor consumer financial experiences and administrative waste in healthcare.”
The move was fueled by a $200 million Series D funding in March 2021, which pushed up Cedar’s market value to $3.2 billion. The fintech start-up has raised $370 million to date.
Market valuation: $2.7 billion
Reference date: March 2021
Year established: 2016
Headquarters: San Francisco, California
Insurtech unicorn Ethos is a provider of ethical life insurance. On its website, the company said it was founded “with a mission to make life insurance more affordable, accessible, and transparent to as many Americans as possible.”
Ethos uses deep tech and data science to eliminate traditional barriers when taking out life insurance. The company’s policies do not require medical exams, instead relying on more than 300,000 data points and predictive analytics to estimate risk factors. This allows the firm to manage the application process digitally and offer same-day coverage for a range of tailor-made policies.
In May 2021, Ethos secured a $200 million investment funding, putting its market value at $2 billion. Two months later, it picked up $100 million from SoftBank Vision, placing the start-up’s worth at $2.7 billion.
Market valuation: $2.2 billion
Reference date: April 2022
Year established: 2017
Headquarters: San Francisco, California
Insurtech brokerage firm Newfront’s digital platform enables users to streamline traditionally tedious processes when buying insurance, including completing applications, accessing policies, making payments, requesting certificates, and tracking claims status. The company offers customized risk management plans and commercial risk products across a range of industries.
Newfront raised $68 million in Series C funding in October 2020. In July 2021, the firm announced a merger with ABD Insurance, which would allow the combined entity to place more the $2 billion in premiums annually.
Market valuation: $1.572 billion
Reference date: May 2022
Year established: 2012
Headquarters: New York, NY
Oscar uses technology, data, and design to offer health insurance products to individuals, families, and small businesses. The company aims to redesign health insurance by taking a customer-centric approach. It also utilizes data to build proactive models to optimize the patient-doctor relationship and provide suitable health plans.
The start-up has about 529,000 members across 18 states, making it the third-largest for-profit national insurer, according to Sønr Global’s 2021 insurtech report. Oscar launched its virtual primary care service in 2020 and its tech-driven platform +Oscar, which offers medical cost management to clients, a year later.
Market valuation: $1.5 billion
Reference date: May 2021
Year established: 2013
Headquarters: San Mateo, California
Collective Health provides self-insured employers a cloud-based integrated health benefits platform, which allows them to manage different healthcare plans. According to the Sønr report, its digital platform includes dashboards showing insights into an employer’s program performance, tools for claims and payment processing, and member advocates who can help workers find care.
The company’s membership has grown by almost 250,000 in just three sales cycles. Its list of clients includes Activision Blizzard, Crossfit, eBay, Palantir, Pinterest, Red Bull, Restoration Hardware, and Uber. In May 2021, Collective Health raised $280 million in Series F funding, driving up its value to $1.5 billion.
Market valuation: $1.35 billion
Reference date: July 2021
Year established: 2016
Headquarters: San Francisco, California
At-Bay provides businesses with a cyber insurance and risk management platform where they can access a range of policies and security insights based on their IT systems and vulnerabilities. Coverage areas include information privacy, network security, business interruption, cyber extortion, financial fraud, and media content.
In October 2021, At-Bay announced the closing of a $20 million extension to the company’s Series D financing, bringing the round’s total to $205 million. This placed the start-up’s value at $1.35 billion.
Market valuation: $1.29 billion
Reference date: May 2022
Year established: 2015
Headquarters: New York, New York
Lemonade offers homeowners, renters, pet health, and term life insurance policies powered by artificial intelligence and behavioral economics. The insurtech firm provides quotes, underwrites and sells policies, and handles and pays claims through its online app. According to Sønr’s report, the company once granted a claim in three seconds using chatbots for policy queries and claims and fraud detection.
Lemonade is also a Certified B Corporation. The firm operates an annual give-back program, where it donates unused premiums to non-profits selected by its community.
Lemonade is also one of the best insurance companies to work for in USA.
Market valuation: $1.06 billion
Reference date: May 2022
Year established: 2015
Headquarters: Palo Alto, California
Hippo Insurance is a home insurance provider that uses advanced technology to deliver a simpler process, smarter coverage, and a new approach to caring for people’s homes. It offers personalized digital policies, which can cover common household items not typically included in standard home insurance, including cleaners and babysitters. The company also provides smart home devices and works with customers to identify and resolve small issues in their homes before they become big claims.
In recent years, the insurtech unicorn has expanded into the commercial property market. It acquired home maintenance start-up Sheltr in 2019, property and casualty insurer Spinnaker in 2020, and First Connect Insurance Services in 2021.
Read more: Hippo expands into commercial insurance
Market valuation: $1 billion
Reference date: January 2021
Year established: 2018
Headquarters: El Segundo, California
Sidecar Health is an insurtech start-up that gives users access to a personalized health insurance platform. It offers customizable plans based on clients’ coverage needs and budgets, and maintains transparency on medical costs and payouts. The company also keeps transactions fast and easy by allowing customers to access doctors and pharmacies of their choice and directly pay them. A $125-milllion Series C funding in January 2021 has put the company’s valuation at $1 billion.
Market valuation: $1 billion
Reference date: April 2021
Year established: 2016
Headquarters: Chicago, Illinois
Clearcover gives drivers access to an app-based insurance platform where they can find, compare, buy, and manage auto policies. Advice and recommendations are delivered through the platform’s Coverage Wizard, while claims are handled digitally via Clear Claims. These features enable users to submit details and evidence of damage through their mobile devices, which paves the way for quick assessment and decision. According to Sønr’s report, the fastest payment the company has recorded on a claim decision is seven minutes.
In January 2020, Clearcover has secured a $50 million Series C funding, allowing it to expand to new states. In April 2021, the company raised a further $200 million as part of a late-stage financing round, pushing it to unicorn status.
Clearcover also recognized as one of the winners in 5-Star DE&I 2023. Read the full report here.
