Fintech has revolutionized much of the financial landscape with banking platforms, payments platforms and even peer-to-peer lending. For a while, it appeared that the insurance landscape would remain relatively unscathed in the fintech wars. (See also: How Fintech Advances Are Improving Finance for All.)

That seems to have changed recently with the birth and rapid growth of "insurtech" over the past few years. According to CB Insights, insurtech funding grew to $2.7 billion in 2015, up from just $740 million in 2014 – an astonishing growth rate given the rather monolithic culture of the traditional insurance industry. (See also: Could Fintech's Insurance Innovations Disrupt the Industry?)

It appears that no part of the industry is out of reach for insurtech startups, which are focusing on distribution and market saturation, reaching out to consumers who fall through the cracks of traditional insurance companies, and analytics encompassing the internet of things to improve underwriting and risk management decisions, especially in the health insurance niche. (See also: The Current IoT Revolution.)

The complex insurance regulatory regime and massive capital requirements preclude many of these insurtech startups from becoming risk-bearing insurers themselves, relying more on a partnership model with traditional insurers to improve sluggish business models.

Here's a look at the movers and shakers in insurtech for 2017 and beyond.

Oscar Insurance Corporation

Oscar was created in 2012 after the Affordable Care Act went into effect, making it one of the oldest insurtech startups. With the U.S. health insurance market dominated by massive mergers between the largest companies (Aetna Inc. (AET) and Humana Inc. (HUM); Anthem, Inc. (ANTM) and Cigna Corporation (CI), for example), Oscar is bringing a more nimble, personalized approach. 

For example, it offers members phone service for routine activities such as getting basic health care advice or a prescription, eliminating the need for costly face-to-face encounters for many uncomplicated conditions. Unfortunately, Oscar currently operates only in the New York and New Jersey markets.

Oscar has received $750 million in funding and is backed by big names such as Alphabet Inc.'s (GOOG) Google and Fidelity Investments. Oscar is estimated to take in about $200 million in annual revenue, and Deloitte values the company at around $3 billion. (See also: How Does Oscar Work and Make Money?)

Trov, Inc.

Trov is based on an idea that is right for the times – it sells "on demand insurance for the things you love" via an app. Better yet, customers set the duration for coverage, which can easily be turned off and on, also via the app. It's an entirely mobile experience, with claims being managed through text messages.

The company is based in the U.S. but currently operates in Australia and the U.K. It is expected to launch in the U.S. some time in the next six months.

Launched in 2012, Trov has received roughly $46 million in funding so far, and shareholders include Suncorp Group Limited (SNMCY), Anthemis Group and OAK HC/FT. Trov CEO and founder Scott Walchek was a co-investor and founding director of Baidu, Inc. (BIDU) and CEO and co-founder of C2B, which was acquired by Yahoo! Inc. (YHOO).


Co-founders Arvind Parthasarathi and George Ng launched this insurtech startup in 2014. The business model focuses on a high-demand but relatively underserved niche – cyber attacks. The company uses data science and a powerful analytics platform to model, assess and price risk – the likelihood that a company will be the target of a cyber attack and the potential financial impact of a security breach. (See also: Cyber Attacks and Bank Failures: Risks You Should Know.)

Last year, Cyence raised $40 million from investors including Dowling Capital Partners, New Enterprise Associates and IVP. Current customers include A.M. Best and Brit Insurance.

Lemonade Insurance Agency, LLC

Billed as a renters and homeowners insurance company for New Yorkers, Lemonade is one of the few insurtech startups officially licensed as an insurance company. Founded by Daniel Scheiber and Shai Wininger, Lemonade originally called itself a peer-to-peer insurer, but after a successful round of funding ($13 million from Sequoia Capital, XL Innovate and Aleph) and business partnerships with the likes of Berkshire Hathaway Inc. (BRK-A, BRK-B), its true business model is a little less clear.

The company is structured as a Public Benefit Corporation, and its website states that its commitment to donating excess premiums to social causes is part of its mission statement and "not just marketing fluff," subject of course to board discretion.

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