Insurance, Insurtech, Startup


Karl Heinz Passler


On Tuesday, 3. March 2016, Kirill and Jörn (the makers of hosted an InsurTech discussion in the premises of the (disruptive FinTech Incubator) Gründermaschine in Frankfurt. They discussed with the founders of leading InsurTech startups topics related to insurance and technology.

Leading Entrepreneurs on Stage (from left to right)

Dominik Groenen, Founder & MD from
Massup provides a white-label platform for online sales of annex and niche insurance products by brokers. The complete processing (from request, online payment to contract validation and commission payoff) is carried out by massUp.

Simon Nörtersheuser, CEO from
Policen Direkt is a market leader in the secondary market for classic life insurance (non unit-linked) in Germany and Austria. The Policen Direkt Group buys, sells and manages classic life insurance policies.

Jens Jennissen, CEO from is an insurance agent that provides retirement solutions which they also want to use as the clients themselves. Therefore demands products that are transparent, cost-effective and customer-friendly.

Dennis Just, CEO from
Knip is an innovative digital insurance broker that provides users with an easy-to-understand overview and analysis of existing insurance policies, tariffs and services – based on an mobile app.

Tim Kunde, CEO from
Friendsurance is an insurance broker and has implemented an online P2P insurance which combines social networks with established insurance companies.

My most important Learnings

I’ve put together some of the learnings from the event for you. Except for Dominik Groenen of massup all participating startups are operating on the customer side (B2C). That is, they are insurance brokers or agents. The following first two learnings focus on this B2C market role.

Lesson Learned No. 1: Excellent Customer Experience is at Risk

First-time customers want an overview of their policies inside a mobile app. The fulfilling processes are done offline and take a while. In order to keep the Customer Experience high, customers get regular notifications and interactions.

For mobile apps based InsurTech brokers like Knip (Clark, getsafe etc.) there is still a raw nerve point. First-time customers want to see their current insurance contracts in a short amount of time inside the app.

Unfortunately, the back-office processes for insurers are done offline. So it may take a few weeks until first-time customers can actually see their policies in the provided app.

Lesson Learned No. 2: InsurTechs are Not in Competition With Insurers

InsurTech brokers incorporate the traditional broker business model. They are dependent on insurance products and commissions provided by insurers.

The new breed of InsurTechs are at the core still brokers. Apart from the mobile apps – all the rest of the business is (up to now) traditionally structured and processed as an insurance intermediary.

They remain dependent on traditional insurance corporations providing products and commissions they live on. The real competitors are the remaining traditional brokers. The incumbent brokers had (up to now) the customer touch points and earned correspondingly high commissions.

The new breed of brokers are on the hunt for revenues and put their scalable customer focused processes into work. InsurTechs are going to replace a lot of traditional brokers.

Lesson Learned No. 3: Risk Carriers will have an Advantage of InsurTech Brokers

Risk carriers will have a cost advantage by focusing on InsurTech brokers with scalable processes. InsurTechs provide simplicity instead of thousands of individual agents and brokers to deal with.

After the German deregulation (1994) the number of agents and broker has sky rocketed. Currently there are 250.000 individual insurance intermediaries in Germany. The German insurance market is over crowded with intermediaries.

Risk carriers suffer from all sorts of overlapping sales channels, commission agreements and digital initiatives with regard to agents and brokers. From a carrier view the costs of increased complexity rise with the number of sales partners.

The scalable business processes of InsurTech brokers will provide risk carriers a lot of simplicity and reduce transaction costs. Tasks like commission processing, marketing campaigns, policy-holder communication and much more, are examples.

Lesson Learned No. 4: InsurTech Brokers Focus on a Few Activities

Because InsurTech Startups focus on a few value creating activities we can use the value chain tool to locate them on the insurance value chain.

InsurTech brokers (like Knip, fairr and friendsurance) focus on a limited set of insurance activities so we can use the value chain tool to map the performed activities on the traditional insurance value chain. The (in my eyes) second most common group of startups enter the value chain on the customer side. They focus on the phases of gathering information, need analysis, quotation and the application.

InsurTech Brokers taking up several value creating activities inside Insurance Value Chain - by
InsurTech brokers taking up several value creating activities inside insurance value chain

Lessons Learned No. 5: Germany is a Surprisingly Good Starting Point for InsurTech Startups

Germany is an excellent starting point for startups in the InsurTech industry. They only deal with one regulated market. The opportunities are greater than in any solely regulated US state.

Many in the world press listed startups are German InsurTech brokers like Knipfairr and friendsuranceClark and getsafe. Although the US market appears larger, American InsurTechs focus mainly on health care insurance such as OSCAR for ObamaCare.

The insurance intermediary regulation in each of the 50+ States in the US reduces corresponding market sizes significantly. For example: The most populous state California counts “only” 39 Mio. residents. So US InsurTech startups have the disadvantage of scale (enough), compared with Germany.

With a population of 82 Mio. residents under one uniform regulation by the German Regulator (BAFIN), the scaling potential is far greater than in the US not counting the German-speaking population of Switzerland and Austria.

Lesson Learned No. 6: The German Insurance Market has Valuable Customers

Start in Germany and scale outside. In Germany, there is a big insurance market with seasoned and affluent target group aged 50+ searching for insurance and retirement schemes.

InsurTech startups need economically developed populations to prosper. Young tech-loving prospects are likely to be customers of an InsurTech broker, but they are literally poor customers.

They have not yet accumulated enough assets to be a viable customer of a broker, they lack interest in protecting themselves and their family with insurance, and missing experience in financial matters to make sophisticated decisions.

Germany has an aged and wealthy population with great need to protect themself and their assets using insurance products. And there is a large customer group aged 50+ looking out for retirement schemes.

I am glad that I had the opportunity to be personally present at the first InsurTech Event hosted by in Frankfurt. In addition to the 6 lessons learned, I had the chance to meet the makers of the event and talk to the InsurTech leaders personally. The Gründermaschine (disruptive FinTech Incubator) is an appropriate place providing real startup atmosphere.