Insurance is not known for innovation. Those of us who have tried to transform the insurance industry – whether from inside, outside, or both – bear the scars.
The multi-trillion dollar insurance industry seems to have so far dodged the bullets that have hit the banking and wealth management sectors, which are experiencing significant challenges in areas where consumers have been poorly or expensively served by incumbents.
And yet growing numbers of entrepreneurs have this stodgy but critically important industry firmly in their sights: According to CB Insights, startups hoping to disrupt insurance have raised more than $1.4B since the start of 2014. We also seen several new corporate venture funds targeting FinTech startups and backed by insurance carriers launch in the last two years.
Now, enter Startupbootcamp Insurance. Part of the well-known global network of accelerators, SBC Insurance has announced a new program for insurance technology startups. Ten startups will be selected for a three-month program that will kick off on January 10, 2016. In return for an 8% equity stake, participated companies will receive:
- Access to an extensive network of mentors
- Guidance from leading global insurance carriers
- 3+1 months of free office space
- €15K in cash per team
- Exposure to venture and angel investors
- Membership in the SBC alumni network
The program will be located at the Rainmaking Loft, not far from Tower Bridge and the Tower of London. Applications are being accepted through October 31. You can apply here.
Liz Lumley recently joined Startupbootcamp Insurance as MD, coming from Finextra Research. She was kind enough to answer our questions.
Q. What stage company is SBC Insurance designed for?
A. In general, Startupbootcamp focuses on supporting early-stage startups. Ideally, these companies are looking to raise their seed rounds within the next six to 12 months.
Q. Who should apply?
A. For our programme we are looking for insurance and insurance tech startups. That means startups which are innovating in the core business of insurance companies but also startups which enable innovative use cases with technology in the insurance sector.
Q. Insurance is a big world. Is the program for life, health, or P&C startups? For startups on the retail side of things or the institutional? For startups hoping to serve insurance carriers or for startups hoping to replace them?
A. We take a wide view of the insurance world. With our partner network, we encourage startups that are looking to work with incumbents in his space. In fact, an active part of our programme is to create pilots and projects and work closely with the partners involved in the programme. That said, we are also looking for so-called ‘disrupters’. Startups that are looking to upset the status quo and challenge the traditional insurance market.
Q. Is the program open to startups anywhere in the world?
A. Yes, this is a global programme. We get applications from all over the world.
Q. Who is judging the applications? What are your acceptance criteria for the insurance accelerator?
A. The Startupbootcamp team sorts through the list of applicants. We are looking for solid companies with a good team and a great idea that looks ripe for acceleration. Team is critical for us. So that is why SBC does not accept teams with solo founders. Startups will need at least two founders to be accepted into the programme.
Q. What are the visa requirements for a startup team participating in the program? Do you help them navigate the bureaucracy?
A. We give advice and guidance regarding visa requirements. In some cases, a business visa or an entrepreneur visa can be used. Some teams can make do with a three months tourist visa (if they don’t plan on doing much travelling).
Q. The program last three months. Where do out-of-town participants live while they are participating?
A. We also give advice on where to find accommodations. We encourage teams to work together and find a shared house – making expenses easier. The €15K in cash is meant to help with some of the minor expenses involved in relocating. Most utilize AirBnB during the selection process.
We understand that London is an expense place to live. That is why we need to determine that the startups have enough capital to relocate and to survive during the three month programme. If a startup doesn’t think they have enough funding or capital to make it through the programme, then we don’t encourage participation. This programme takes focus – a mid-programme fundraising or bankruptcy would mean that the team loses focus and wouldn’t benefit from the programme.
Q. Who will be in the audience during demo day?
A. The majority of the audience will be investors – both from VC and angel networks. In addition, many senior people within the insurance industry and the press will attend.
Q. Can you quantify SBC’s track record? For example, readers may be interested in knowing how many graduates find funding as a result of the program. And, of those that are B2B, how many find customers?
A. The SBC global statistics can be found here: http://www.startupbootcamp.org/stats.html.
This year will be insurance’s inaugural year. However, for comparison, out of our 2014 FinTech programme, eight are still active. They raised £7 million in funding. And two firms chose not to raise funding as they are making sufficient capital through customer acquisition to fund growth.
Q. What firms are making data available to startups in the program and what are the startups allowed to do with it?
A. In addition to working closely with our insurance partners (which also now include PwC), SBC offers the startups services from the following firms: http://www.startupbootcamp.org/sponsors.html.
Q. Which firms are opening up their APIs?
A. We haven’t planned any public API releases yet with our partners, but the accepted startups will have the opportunity to get early access to our partner’s resources in pilots. This is one of our main goals and our partners are eager to start with the teams in January. In the long term, it would be great if we would see more open APIs as a result of our programme.
Q. How involved are the mentors with your startups during the program?
A. We encourage active involvement with the mentors in all SBC programmes. We don’t like ‘LinkedIn mentors,’ meaning mentors who list their involvement with SBC on their LinkedIn profile but then offer no value to our startups. We encourage two levels of mentors: advisory level mentor who work closely with relevant startups throughout the programme, and expert mentors who work on a more ad hoc basis or when their specialist knowledge is required.
Q. What are your sponsors hoping to get from supporting the insurance accelerator?
A. Partnerships. Knowledge and insight into innovative technologies and thinking that are shaping the industry.
Q. All of your insurance mentors listed on your site are men. Does that tell us something about the insurance industry?
A. We are working on more women as I write! Check back soon – there will be more added. But yes, tech and financial services in general can seem very male dominated. But that doesn’t mean there aren’t interesting though leaders in insurance who happen to be female, out there. We are actively look and recruiting them now. Keep in mind that insurance is a new programme – we are building the community now. For comparison – look through the mentor list for FinTech.
Q. I expect internet of things to have a big impact on insurance, but are startups in this space too far from your core mission?
A. No – we expect to see the IoT make a huge impact on insurance as well and look forward to working with startups in this space.
Q. If you are successful in London will you bring SBC Insurance to other cities?
A. For now we do not have any specific plans to open a second insurance programme but we keep an eye on the global ecosystem and if we see it grow as we expect it to we will definitely look into this again.
Q. Liz, you are brand new to Startupbootcamp. What made you make the jump to the insurance accelerator?
A. I was looking for a new challenge. I have spent over 20 years working in FinTech, mostly as a journalist and analyst, and I feel passionately about fostering innovation in financial services. It was the right time for me to start building new innovative companies, rather than just writing about them.
Q. SBC offers participating companies space for ‘3+1’ months. Does that mean ‘4’?
A. Yes, it means four. We don’t kick the startups out after Demo Day. We give them an extra month in the office to take advantage of all the contacts they have made during the programme. They will meet with a lot of investors during Demo Day. The extra month lets them have space for follow up meetings following graduation.
Q. Why do you think it is that insurance has been relatively unscathed by FinTech innovation, and why is it about to change? Are there areas you think are particularly ripe for disaggregation?
A. Insurance is generally thought of as being a bit behind banking in terms of innovation. But that is why many feel it is ripe for change and disruption. I would like to see a few startups that tackle the inefficiencies and paper-based working practices that many insurance firms still work with – in addition to consumer based startups. Issues around risk and assessment will be big in the future. There may be a growing customer base that is willing to accept black boxes in their cars in exchange for cheaper car insurance. Or look at being transparent with lifestyle changes in connection with life insurance. Customer privacy, the split between those who are anti- and those who are not, will be a battleground coming up.
Q. London is gaining, and promoting, a reputation as a FinTech hotspot. Are you working with the rest of the UK FinTech ecosystem or are you agnostic as to which regions are most successful in FinTech?
A. The FinTech programme has already branched out to Singapore. We are very active in the FinTech ecosystem and building up the Insurance one as well.
Q. You are sponsoring a September hackathon for insurance startups. Do you have a theme?
A. We are currently in the process of finalizing the concept of insurance hackathon with our partners and hope to get the word out within the next week. So keep an eye on our Twitter account. Our handle is @sbcInsurance.
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