Feb 8, 2021

Insurtech disruptor Oscar Health has a new vision for 2021

OscarHealth
Insurtech
Disruptor
IPO
William Girling
2 min
Insurtech disruptor Oscar Health has a new vision for 2021
Oscar Health has officially announced that it has filed for an IPO, placing it in the ranks of other insurtech disruptors like Lemonade, Root and Hippo...

This update comes less than two months after Oscar floated the idea by issuing a draft registration statement for its proposal.

According to the company itself, Oscar intends to list its Class A common stock on the NYSE (ticker symbol ‘OSCR’). The IPO will also feature an impressive rostrum of bookrunners, including Goldman Sachs, Morgan Stanley and Allen & Company. So far there is no indication as to what the company’s IPO goal will be.

Starting the year strong

The end of 2020 saw Oscar net an impressive range of results:

CEO and Co-Founder Mario Schlosser, who founded the company in 2012 following his own poor experiences with US health insurance, stated that this all pointed towards Oscar expanding its mission nationwide:

“Since 2017, Oscar has seen annualised membership growth of more than 70%. As we continue to rapidly scale our business, [the $140m funding] will help us deliver on our commitment to bring accessible and affordable care to even more Oscar members across the country.”

Setting out a new vision for health insurance

The IPO seems to form part of an ongoing vision, which may also be contributed to by two new “strategic hires”: Alessa Quane to Chief Insurance Officer and Sameer Amin as Chief Medical Officer - both effective from March. 

“Alessa and Sameer are joining Oscar at an exciting time as we continue to expand our footprint and product offerings, including the launch of Oscar’s Virtual Primary Care in 2021,” stated Schlosser. 

“Their expertise will help us build upon the strength of our existing insurance and clinical experiences and further our ambition of making our members feel like having Oscar is like having a doctor in the family.”

Image source: Oscar

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Jun 19, 2021

Insurtechs are winning the race with legacy system companies

Insurtech
Insurance
AI
Technology
Tom Allen, Founder, The AI Jou...
3 min
Insurance has long been due an overhaul. The AI Journal’s founder Tom Allen explains how innovative insurtechs are changing the incumbent narative

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

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