Insurtech in France now means innovation in Europe’s top insurance market after the UK’s exit from the European Union.
The French fintech sector shows no signs of slowing down: even in 2020, despite initial difficulties, it recorded double-digit growth levels compared to the previous year, raising a total of almost €830 million (+18.5%) in 63 transactions with an average value of €13 million (+20.6%).
Prominent in the world of financial startups in France is the insurtech sector, which has increased its clout in 2020 thanks in part to major funding rounds and an increasingly sharp interest in digitizing operations, a practice turned into a need by the Covid-19 pandemic.
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The insurtech sector in France
According to a 2018 survey by European Insurance, at the European level, France is the second largest market for the insurance sector, positioning itself just after the United Kingdom (now officially exited from the Union): it has thus become the first in Europe, followed by Germany, both in terms of the amount of premiums underwritten and the value of compensation paid.
It is therefore not surprising that the French insurtech world is a fast-growing sector: in 2019, the consulting firm Ailancy identified as many as 187 startups specialized in digital insurance, compared to 106 in 2018 and 47 in 2017.
Moreover, if in 2018 in France the insurtech sector gathered 13% of total fintech investments, a report by France FinTech says instead that the percentage touched 21% in 2020, mainly thanks to the development of new innovative startups offering on-demand or parametric policies, and the strides made in terms of data management and analytics.
Insurtech in France, the most promising startups
Among the top 15 investment rounds kicked off by French fintech companies in 2020, four were closed by insurtech startups. The first is Alan, which raised €50 million at the end of April, the first month of recovery after the arrival of the pandemic and the subsequent slump in investments in February and March. In December Luko raised the same amount, taking advantage however of a period of great growth in investments.
The third startup is Descartes, with around €16 million ($18.5 million) raised in September, and finally Tinubu Square, which raised €15 million in February.
2021 has also started in an extremely auspicious way: two startups, Lovys and LeoCare, have in fact raised €17 and €15 million respectively in two recently closed investment rounds.
Let’s look at what these startups, the most prominent in the French insurtech arena, are all about.
Alan, the insurance company for wellnes
Founded in 2016 by Jean-Charles Samuelian and Charles Gorintin, Alan was the first independent insurance company born in France after 1986.
The focus of Alan’s policies does not stop at covering accidents or routine medical operations, but also looks to the wellness sector, offering discounts for meditation tools such as Headspace and also covering homeopathic or osteopathic treatments.
Thanks to the partnership with Livi, then, Alan has expanded into the field of telemedicine, offering its customers the opportunity to receive virtual medical consultations wherever they are, within 30 minutes.
Today, the startup offers fully digitized health insurance to more than 76 thousand users, including citizens and businesses: a net growth compared to the 27 thousand customers served in 2018.
Luko, ethics and home insurance
Since 2018, the Parisian startup Luko aims to bring about a breakthrough in the field of home and rental insurance with a strategy based on ethics: with the Giveback program, in fact, the company devolves every year what remains of its receipts, net of operating expenses and compensation, to charities chosen by its 100 thousand customers.
In addition to fully digital policies that can be customized according to the different needs of each user, Luko has also implemented a teleservice with professionals to help solve small domestic problems, from the leaky sink to problems with the boiler.
Unlike Alan, however, Luko has not obtained an operating license and relies on external insurers, such as Munich Re and Swiss Re, to underwrite its policies.
Descartes, risk forecasting for the environment
Descartes’ business is different again: the company is moving into the field of risk forecasting, especially in the environmental field, to help insurers keep an eye on all the possible implications of a policy.
To operate, Descartes leverages artificial intelligence and the Internet of Things (IoT), for example through the analysis of satellite images or the use of sensors specifically designed to monitor the weather conditions of areas considered particularly at risk.
As a result, Descartes offers its customers highly accurate parametric insurance, where the premium is calculated based on the probability that an event has of occurring. In 2020, it entered into a partnership with Generali’s Property and Casualty unit.
Lovys, the online policy in two minutes
Lovys offers insurance policies for home, car, pets and smartphones: a wide-ranging offer, also made possible by the simplification of practices and the complete digitalization of processes.
Insurance policies can be activated online in less than two minutes, freeing users from the flood of paperwork and documents required by traditional agents. Founded in 2017, the startup currently has 20 thousand customers, but plans to reach 100 thousand by the end of the year.
Tinubu Square, digital services for insurance companies
Founded in 2000, startup Tinubu Square operates in the SaaS (Software as a Service) sector, providing digital services to companies dealing with credit insurance or bank surety bonds.
Tinubu Square’s customers have access to a suite of cloud-based solutions that simplify digital transformation for all operational processes, reducing costs while improving customer experience and compliance levels.
With offices in Paris, London, New York, Montreal, Mumbai and Singapore, by 2018 Tinubu Square was active in 20 countries. In 2020, it then acquired U.S. company SuretyWave and insurtech eSURETY.
LeoCare, the tailored policy
Finally, LeoCare offers digital insurance for home, auto and electronic devices. Policies are quickly triggered via the company’s app and can also be customized to unforeseen changes: according to TechCrunch, for example, during the lockdown period imposed by the Covid-19 pandemic, many LeoCare users decided to lower their car insurance premiums.
LeoCare now operates as a managing general agent (MGA) and, with its 20,000 customers, manages about €1 million in monthly premiums, most of which come from car insurance policies.
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