Startup: Honey Insurance sets Australian insurtech record
Honey combines policyholder-provided information with data regarding their house to provide flexible coverage that eliminates “guesstimating” and still allows for extras. Its technology promises to generate cover in as little as three minutes.
Once coverage has been purchased, policyholders will receive $250 worth of smart sensor equipment to alert them to instances of fire or water damage and theft. By using these sensors, Honey’s customers will also be able to access an up to 8% premium discount every year.
Breaking insurtech records
Honey’s $15.5mn (US$11.6mn) seed round is the largest in Australian insurtech so far. In addition to RACQ, its underwriting partner, the round saw investment from a diverse range of notable companies like AGL, Mirvac, PEXA, and others.
In addition to general R&D, Honey is reportedly set on using its new funds to expand and scale its team over the next 12 months.
KMPG’s 2020 survey of the Australian insurance sector highlighted the following trends (among others) as requiring both short- and long-term focus:
- Simplification and cost optimisation
- Changing customer expectations
- Technology modernisation
Honey demonstrably addresses these issues with its home insurance offerings, indicating that it is becoming established in a highly favourable market.
“We want to use technology and services to truly reduce risk in people's lives and blow them away compared to what they are used to,” said Joffe.
“It took two years to investigate the idea, to speak to local underwriters, to speak to potential partners who are also customer-centric, to study the international market to understand what would or wouldn't work here.”
As modern insurers seek to move beyond traditional paradigms in order to serve new customers, or those with a preference for digital platforms, Honey is demonstrating that market research and empathy for peoples’ needs can yield promising results.
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.