“Insurtech” is a big tent, but to me, one of the most interesting cohorts is the companies that are diving in headfirst by taking on risk themselves.

We profiled some of these companies’ key leaders – including Root’s Alex Timm, Lemonade’s Daniel Schreiber and Metromile’s Dan Preston -- and each of them presided over expansions in their business this year. Root’s UBI product is now available in nine states, while Lemonade is selling renter’s insurance in 25 (and looking overseas as well). Metromile spent the year working on an AI-powered claims experience, and logged a billion miles of driving data. We also met companies ready to jump into the fray, including Jetty (available in 40 states), Pie (launching in March of this year), Hippo, Ladder and Fabric.

Right now, these companies look like guppies swimming around the whales of established carriers in their lines of business. But a lot can change in a year. Lemonade’s Schreiber says his company set out to ‘Uberize’ insurance. Is that possible? Well, take a look at this data comparing yellow cab rides with Uber rides in New York:


There are a couple of interesting stories here. First, and perhaps most obvious, is that yellow cab rides decreased by 80,000 over two years – about a 21% drop. But there were many more gains than that on the other side of the ledger. Uber ridership more than doubled, adding more than 100,000 total rides to the pool. A further 85,000 trips were reported by Lyft, thus pushing total rides over 700,000, a number likely never reached by yellow cabs even when they were the only game in town.

Uber and Lyft have contributed to changing consumer behavior, where people are more likely to leave their car at home and request a ride, simply because it’s so much easier than calling a taxi dispatcher. Anecdotally, I live in a small city in Utah, and if I anticipate downtown congestion, I’ll grab an Uber to get lunch rather than hunt for a parking space – especially if it’s cold.

That may sound like heavy lifting as an insurance company, but it isn't impossible. As often as insurance insurgents criticize established players, they also make a point of stating that there are plenty of untapped customers out there who haven’t picked up certain coverages for some reason or another. For example, nearly 60% of renters are uninsured – providing an attractive market for Jetty and Lemonade even before they start wrenching market share away from current market leaders.

Obviously, there are key differences between the taxi industry and insurance. Bread-and-butter lines like auto and home are much closer to zero-sum games. Because not having auto insurance is a crime in many states, the best path to acquiring customers for customers in those industries is to take them from another carrier. There are still drivers and homeowners added to the pool every year, however, and that is a place many of these new companies look, targeting the particular pain points of the next generation of policyholders. Metromile, for example, is specifically geared toward urban residents who likely don’t drive daily. Hippo positions itself as ready to insure the contents of a modern house, which are less likely to be heritage China and more likely to be high-value electronics.

But there are still similarities that shouldn’t be ignored. ‘Uberization’ – or ‘Amazonification,’ to cite another company that turns industries inside-out – isn’t always a one-to-one mapping. The core principles ease of use and competitive pricing that fueled these companies’ rises are the stated goals of many insurtechs. Add to that the viral potential of social media, a favored channel for these companies’ target market, and you have a recipe for rapid ascendance. The ground is fertile; let’s see if anything sprouts.

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