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This year, insurance companies big and small will be building on the digital progress they made in 2017. Here are some of the most intriguing.
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Root

Usage-based insurance provider Root quietly made the most of 2017, expanding into seven states and launching a partnership with Lyft in its first full year of operation. The company also began building bridges to third-party automotive data providers with the goal of creating a top-notch claims experience. While it doesn’t have the market reach or corporate muscle of some of its competitors, Root is interesting for its explicitly stated goal to find and reward only the best drivers, rather than target low-mileage urban drivers like Metromile or go for volume with Progressive and others’ discount models. What to watch for is how that manifests in value-added services that will lure these drivers to the young company as the year goes on.
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Daniel Schreiber, Lemonade co-founder and CEO

Lemonade

The renter’s insurance provider enters 2018 in a very different place than it entered 2017. At the beginning of last year, Lemonade was still talking about a “peer-to-peer” model and had only a handful of policies in force. Now, the company has dropped the peer-to-peer messaging and is focusing on growth, launching an API to sell its products in October and talking about the international market in its end-of-year message. Never shy about its desire to change the insurance industry, 2018 will be a big year for the carrier to show it can deliver on its assertions.
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Arity

The connected-car services provider inked its first client other than its parent company Allstate when National General signed on last fall. The insurance industry will be on the lookout this year to see if Arity continue to build a stable outside the Allstate umbrella or its most groundbreaking innovations are kept in-house.
Nationwide headquarters in Ohio
Nationwide Plaza One in Columbus, Ohio.

Nationwide

Nationwide was particularly busy in the latter half of 2017, hiring a chief innovation officer to oversee a $100 million insurtech investment fund, taking on distracted driving and dipping its toe into blockchain. The moves position the company to take steps it has hinted at, like an enhanced usage-based insurance program.
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American Family

American Family has been aggressive in partnering with insurtechs and other startups. But toward the end of the year, it made a couple serious moves that show a company looking to make larger steps. It appointed a digital transformation officer and outright acquired two software companies, and in discussing both said it was committed to incorporating advanced data, analytics and machine learning.
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The headquarters of Munich Re stand in Munich, Germany, on Tuesday, Aug. 4, 2009. Munich Re, the worldÕs biggest reinsurer, said second-quarter profit rose 14 percent on higher investment income and the sale of a stake in a U.K. insurer. Photographer: Guenter Schiffmann/Bloomberg

Munich Re

The reinsurer hasn’t been shy about backing new digital insurance business models. It bankrolls many up-and-coming insurtechs in different business lines like Slice, Trov and Bought by Many. Now that those companies have financial stability and another year of experience behind them, the industry will be watching to see which of them are winners. The company is also working with regulators on a “sandbox” concept for more insurtechs to test ideas.
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Signage is displayed at Aetna Inc. headquarters in Hartford, Connecticut, U.S., on Tuesday, Nov. 22, 2016. The Justice Department sued to block the union of Aetna Inc. and Humana Inc., saying they would reduce the number of large, national health care insurance providers, leading to increased costs for their clients. Photographer: Michael Nagle/Bloomberg

Aetna

The health insurer makes this list for one reason: Its pending acquisition by CVS. How the insurance and retail businesses intersect from a digital perspective will be of interest to insurers in all business lines.
Farmers Insurance headquarters building
Farmers Insurance headquarters in Los Angeles. In November, the carrier announced the acquisition of three companies: Kraft Lake Insurance Agency, Western Star Insurance Services and Farmers General Insurance Agency.

Farmers

Like many other insurers on this list and elsewhere, Farmers deployed a laundry list of digital initiatives this year: virtual reality, drones and a new UBI program. But the company is also in the midst of a core transformation effort with Guidewire. Getting that to the finish line could yield even more changes at the tier-one P&C insurer.