According to the Brazilian Startup Association (ABStartups), the number of insurtechs jumped from 70 to 210 in the last three years in the country. Similar to fintechs in the National Financial System, insurtechs are 100% digital insurance startups that use technology to promote the offer of more efficient and personalized coverage.
Because they were created by companies outside the traditional insurance market, insurtechs do not currently have a structured regulation policy on the part of SUSEP, which has been following the evolution of the segment to review the rules of the sector as a whole, in order to promote fairer competition between companies in the national insurance market.
In this sense, the agency, together with the Special Secretariat of Finance of the Ministry of Economy, the Central Bank of Brazil and the Securities and Exchange Commission, is studying the implementation of a regulatory sandbox model in Brazil. This model consists of a space for testing innovative products and services in a supervised manner, but without initially applying the current regulation.
Thus, the experiment of new products will be carried out with temporary authorization to operate and, at the end of the term, they may obtain definitive authorization or be acquired by an insurance company. It should be noted, however, that these projects must prove the generation of new technology and its positive impact on policyholders.
Finally, the absence of a physical performance structure favors the reduction of insurtech costs, increasing the investment trend in this segment, including by traditional companies in the sector.
Who Is Active in Brazilian Insurtech? Glad You Asked
Youse, which launched in 2015, offers an online platform to sell home, car and life insurance, underwritten by Caixa Seguradora, a subsidiary of CNP Assurances. Youse says that it offers personalized insurance policies in a matter of minutes via its website or customer mobile, 24/7. There are over 1,000 possible combinations of services offered by Youse.
Liberty Seguros invited new insurtechs to enter its accelerator co-lab late in 2019. Liberty say they are interested in helping companies looking at machine learning to assess risk, automated processing and admin, data analytics and new products which can reach out to the many uninsured people across Latin & South America.
Thinkseg claim they launched the first PAYG car and bike insurance scheme in Brazil recently, with consumers invited to pay a monthly Netflix style subscription, and then a few cents per trip on top. Everything is tracked and priced in real time via a smartphone app portal.
Onsurance also offers a PAYG/telematics product via smartphone, with offices in the USA and Brazil. Users provide phone photos of their vehicle and other personal data to get a quote, then start off with a deposit, or credits, to activate the policy. You get an Onsurance smart device to plug into your car. Once set-up, it’s a pay-per-mile type of cover. If you’re not moving, then cover is effectively switched off, so you are paying for what you use, not all-year round Comp coverage. The Onsurance gadget also acts as a tracker in the event of theft.
By the way, Insurtech Brasil – the largest insurtech show on the calendar, scheduled for 14th April 2020 has been postponed due to COVID-19.