Healthcare insurtech super app Alan reaches US$1.68bn value
French healthcare insurtech super app Alan has reached a €1.4bn ($1.68bn) valuation following its latest Series D funding round.
Referencing the EU average of 10.5% GDP spend on healthcare, Alan celebrates France’s higher than average spend (11.3%) but also acknowledges that even this is not enough. Instead, consumers need access to quality health insurance products and the company is focused on providing this through next-gen technology.
Rise of the super app
Alan’s app provides scalable health insurance plans for companies of all sizes and combines this with a more “human approach” that emphasises overall wellbeing.
“We are excited to partner with Jean-Charles [Samuelian-Werve, Co-Founder and CEO] and the rest of the Alan team as they seek to transform the healthcare industry,” said Philippe Laffont, Founder of Coatue.
“With its people-centric approach, Alan delivers better care for patients at a lower cost for the healthcare system. We are proud to support their vision of building the healthcare super-app.”
Putting members’ needs first
Alan is particularly proud of the support it has been able to offer its members during the difficulties of the COVID-19 pandemic. This has included:
- 75% of claims reimbursed within less than an hour
- A team of in-house doctors granting unlimited access to medical information
- Community support and local offerings tailored for the Spanish and Belgian markets
“In a post-pandemic world, our role as a trusted partner will be to re-engage individuals with the healthcare system,” said Samuelian-Werve.
“For us, this means being personalised and tailored to each person’s needs, able to offer the best price possible and relieving financial stress, incredibly fast at delivering accurate answers on health and wellbeing, and proactive when providing decisive medical guidance to everyone.”
With workforce expansions in the pipeline and an ambitious goal to reach one million insured members by 2023 (currently 155,000), Alan is setting its sights high and aims to be a true role model for the global startup community. In the opinion of Cédric O, Minister of State for the Digital Transition and Electronic Communication, it is already achieving this:
“Alan's success is the perfect illustration that France can create and grow start-ups on a global scale.
“I am very proud of what Alan’s teams have accomplished in just a few years and I am sure that their success will inspire many others.”
Pictured: Jean-Charles Samuelian-Werve, Co-Founder and CEO, Alan
Image source: Alan
Insurtechs are winning the race with legacy system companies
Nestled in its own place within the world of financial services, insurance is arguably more unpopular than retail banking.
That’s hardly surprising given that, from a customer service perspective, insurance is something of an off-kilter transaction. You pay a sizable premium in exchange for a service you hope you will never have to use. This image problem is exacerbated by ubiquitous tales of insurers not paying out when it is time to make a claim.
The insurance sector has long been due to an overhaul, and this is where the disruptive force of insurtech comes in - one of fintech’s most upwardly mobile subcategories. Accordingly, last year, insurtech in the UK alone attracted £262m in investment, a growth of 60% on 2019, according to Tech Nation. Insurtech’s momentous growth has been captured in a new report by The AI Journal exploring this burgeoning sector.
What exactly is insurtech?
Put simply, insurtech refers to technological innovations that seek to make insurance cheaper to buy and more efficient to use. In a similar vein to fintech, the large, established institutions have been dipping their toes into insurtech, but it’s the disruptors who are genuinely looking to shake up the status quo, diving into and exploiting those areas that traditionalists have little imperative to explore.
Examples are price comparison sites (one of the earliest forms of insurtech that was eventually snapped up by the insurers it initially sought to disrupt), claims software, customisable policies, or even smart-tech-enabled dynamic policies whose premiums can fluctuate depending on changing circumstances.
The latter, for instance, could use someone’s fitness tracker or smartwatch to monitor fitness levels, thus reducing the premium of a life insurance policy; or track a GPS system that records the location of a car and assesses risk levels accordingly.
Most consumers tend to shop around for their insurance needs and perhaps end up buying their contents insurance with one provider, their car insurance with someone else, and their pet insurance with yet another underwriter. Managing all these different policies, with their varying renewal dates and payment terms can be complex. This has led to the increase in apps that pull everything together.
More prosaically, insurtechs are developing AI that uses machine learning to act as an insurance broker, eliminating the need for a human intermediary and therefore offering more cost-effective and impartial advice.
Insurtechs and risk
But there are some obstacles in the way of insurtech’s continued evolution.
Insurance companies are averse to risk. Understandably so, as at the crux of the industry is the role of the actuary, whose job it is to analyse and measure the probability and risk of future events. So it’s little wonder that there’s a reluctance among the traditional players to welcome the disruption that insurtech brings.
Insurance is heavily regulated, a minefield of legality and labyrinthine jurisdiction, which means the idea of shaking it up can be anathema. And why would they, when their old-school business models are working perfectly fine?
There’s an understandable nervousness and unwillingness to work with startups, who themselves need to work with the bigger firms in order to underwrite risk.
While it seems like a catch-22 situation, there is growing, if cautious, interest from insurance companies, who can see the benefits of insurance with a friendlier face, innovative solutions, and a competitive edge through differentiation. As that tentativeness dissipates, the growth of insurtech will gather even more momentum.
Tom Allen's analysis is based on the findings of a new report on the fintech and insurtech industries produced by The AI Journal.