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Munich Re Digital Partners continues to gather affiliates in a new partnership with Simplesurance, a Berlin-based technology company that enables businesses to cross-sell insurance policies for other products.
It’s the latest agreement by the longstanding reinsurer’s new business venture created to support and develop startups in the insurance industry. In July, it announced a partnership with Slice and it won a bid to partner with Trov in early September. Both are on-demand insurance companies with their sights set on morphing policies, offering flexibility when they are or aren’t active and changing how people purchase them.
By offering a platform product, Simplesurance is like many technology-first companies trying to carve out a spot in the insurance industry. The company cross-sells insurance policies for all types of products at the online point of sale. An example might be the opportunity for a consumer to insure a washing machine, bicycle or computer at the time of purchase, with only a few clicks of a mouse.
But it faces similar barriers as others trying to enter the industry. Smaller technology companies across the world are excelling at developing digital solutions that policyholders are interested in, but frequently lack the wherewithal to expand quickly into new markets, let alone across borders. In the U.S., where each state regulates its own insurance market, it can be especially laborious to gain permission to operate nationwide.
Metromile, a pay-per-mile-driven insurance company, began as a platform backed by another insurer and currently operates in only a handful of states. In an effort to expand across the country and minimize regulatory hurdles, the company used $22 million of $191.5 million in investment funding to purchase Mosaic Insurance Inc., effectively gaining licenses to operate in all 50 states.
Most companies that don’t have the capital (or choose to use it) like Metromile to buy an insurance company already licensed across multiple areas, effectively giving them a key to regulatory doors. The majority are partnering with big players in the industry, like Munich Re.
Many insurance companies, such as Munich Re, don’t see the proliferation of insurance technology companies as a threat. They aren’t partnering out of fear, the larger companies view them as valuable collaborators. .
Andrew Rear, the chief executive of Munich Re Digital Partners, said in an email that Simplesurance “fits perfect” with his group.
“Digital insurance startups and digital verticals are changing the way consumers can interact with insurers,” Rear said. “I strongly believe that this ultimately benefits not only consumers, but our industry. That’s why [we] are supporting these kind of activities.”
It’s not just about expansion. In addition to providing its global footprint and experience, Munich Re will also be helping Simplesurance develop new products in existing and future markets.
The two companies have been in talks since the spring, but Rear and Simplesurance did not share details on any new products.
“The new cooperation enables us to develop and test new products much quicker in the market than a traditional insurance company would be able to do,” Simplesurance CEO Robin von Hein said. “With rapidly changing consumer behaviors, this will be a competitive advantage in the future.”
Simplesurance offers policies throughout Europe and in the U.S. and Canada through Assurant. The direct relationship with Munich Re is the first step toward further expansion in Europe and, ultimately, globally, von Hein said.
More than 1,700 e-commerce companies already use the Simplesurance platform to offer policies.
