In recent years, reinsurance companies have been closely working with startups. Among such joint endeavours, one can count the scouting for new technologies in order to integrate them with clients (insurance companies) and commercial business relationships with startups to which they have provided reinsurance in cases of events related to the policy coverage.

Startups such as Ukrain-based Panzly or the Israeli-based Acolto (Formerly Flyzen) and Flight Guard offer technologies and solutions that make nearly fully automatic flight insurance in cases of delays, cancellations and other changes. Israeli Kovrr offers insurers and reinsurers predictive risk models that enable them to provide cyber insurance, while US-based Coalition offers cyber insurance directly.

There are countless of startups that offer insurance solutions in areas that are not usually covered by large insurers. Startups like that can work with insurers or, in other cases, offer customers insurance directly. If they choose to provide such coverage directly, of course, they take on a significant risk upon themselves. When working with reinsurers, startups can lower their risk by splitting with the reinsurer, who will share the risk with the startup.

Reinsurers around the world are innovating, and many global leaders in the field have created hubs of innovation across the globe.

MAPFRE, for example, has funded Insur_space as a hub for open in order to promote collaboration between startups, innovation institutions and MAPFRE. The hub includes an insurtech startup accelerator in Madrid that offers startups with advisory and mentoring, while at the same time paring them with business lines in order to develop pilot programs. Through the accelerator, the company allocates more than €100 million each year in order to develop innovative insurance-related solutions. When combined with the more than €600 million in annual technology investment, the company invests some €700 million in technology solutions.

Another such notable company is Munich Re, which partnered with Plug and Play, China’s Insurtech program to collaborate, partner and conduct pilots with Insurtech startups via the Plug and Play accelerator. By partnering with Plug and Play, the company aims to combine the best of their collective capabilities in accelerating the development of tech-driven insurance solutions.

These two companies are not alone, and other companies, such as Swiss Re, SCOR S.E., Lloyd’s, Hannover Rück SE. and other leading multinational reinsurers have all funded innovation hubs in one form or another, including accelerators, incubator and other types of innovation hubs. The reason why these companies have all gone in the same direction is the understanding that the world is changing, and without collaboration with startups, entrepreneurs and the academia, companies will not be able to remain relevant. The partnership with startups allows companies in order to provide customers with innovative products, improve their business efficiency, and provide customers with the experience that they seek.

Our world is currently going through a significant financial and health-related crisis. The COVID-19 pandemic is a once-in-a-century crisis, but such emergencies do not last forever, and we cannot abandon the startups that cannot survive on their own and without access to funding. We simply should not, and cannot let innovation and useful technologies and products go to waste. No one expected that in a single day, nearly all flights would stop, leaving small startups to bear the costs of reimbursement. It is necessary now that large reinsurers will not let small startups go bankrupt and break their promises to their clients. These reinsurers have deep pockets that startups simply do not have. They need to help cover the costs for the startups now, not because any legal requirement and obviously not out of philanthropy, but because these reinsurers look ahead towards the next couple of years, and not just the present. Such a generous gesture will allow them to maintain their relationships with partners, and attract other viable partners in the future. Reinsurers that act this way while enjoying partnerships in the future with the best of the best that the entrepreneurial world can offer, and at the same time, the reinsurer can ask and receive stocks in the startups. Such a deal will make sure that it is a beneficial solution for both sides, now and in the future.

About the Author

Itai Green is the founder and CEO of Innovate Israel. He is one of the dominant leaders of Israel’s corporate open innovation. Itai is recognised as a leading player in Israel’s startup ecosystem and is at the forefront of launching its growth at a rapid pace. Itai leads innovation processes by connecting global corporations with the Israeli startup community to create advanced technological solutions; focusing on IT, consumer products, pharma, finance, travel, e-commerce, retail, banking, insurance, energy, construction tech and IoT. Itai is a member in several startup advisory boards. In the past, Itai was head of business development and Innovation at Amadeus IT Group in Israel, amongst other prominent positions at Elbit, CEO at Maxtech Technologies, VP Business Development at Techtium and the co-founder of JerusalemOnline. Itai is the founder of the ITTS community (Israel Travel Tech Startups). ITTS houses 350 Israeli traveltech entrepreneurs and strengthens the internal collaboration between startups, as well as increases the level of engagement between startups, multinationals and investors. Itai has also created the IITS community (Israel Insurance Tech Startups) for the Insurance start-up sector.



Featured image via Unsplash.