Jan 13, 2021

Tencent boards Clark’s €69m Series C

Clark
funding
Tencent
Insurtech
Rhys Thomas
2 min
"With Tencent's help, we can grow even faster," says German insurtech's CEO and co-founder Christopher Oster
"With Tencent's help, we can grow even faster," says German insurtech's CEO and co-founder Christopher Oster...

German insurtech Clark has raised fresh capital from Tencent as part of its most recent funding round. 

The Chinese tech giant led the Series C, during which the insurtech has raised €69m to date, and saw the return and increased outlay of existing high-profile investors including Portag3 Ventures, White Star Capital and Yabeo.

A tech-first, customer-centric business model makes Clark an attractive investment, says Alex Leung, Assistant General Manager of Tencent, adding the firms is “a clear market leader in the digital insurance industry in Germany”. 

The Frankfurt-based digital insurance management platform enables customers in Germany to view their current insurance via the app or website and, through an algorithm-based scan of the market, improve their situation with better rates and alternate policies. 

Further expansion planned

Founded in 2015 by Christopher Oster, Steffen Glomb, Dr. Marco Adelt and Chris Lodde to serve the German market, where it serves more than 300,000 custoers, the insurtech also expanded into neighbouring Austria in 2020, where it is managed by Adelt and Dr. Philip Steiner. Clark says it will channel the funds into further expansion initiatives through increased investment in product development and customer acquisition strategies. 

"We are thrilled that, with Tencent's help, we can grow even faster and achieve our goal of becoming the largest consumer insurance broker in Europe," Dr. Christopher Oster, CEO and co-founder of Clark added.

Tencent’s international growth hampered

Tencent’s appetite for investment continues in 2021 despite recent developments in the US which may block the growth of its payment apps and digital financial services across America. Trump last week signed an executive order naming Tencent as a threat to national privacy and banning transactions with two of its payment apps. Alipay was also named, alongside a swathe of popular Chinese-owned or connected utility and productivity apps. A federal judge has moved to block the order, due to come into effect after Trump leaves office. 

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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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