How Innovative Israeli Tech is Energizing the Insurance Industry
Israel’s vibrant tech sector is injecting new life into an industry rarely seen as exciting—insurance. Digital innovation has cleared the path for upstart Israeli InsurTechs to enliven the industry with bold, new ideas.
Legacy insurance policies have long tended towards standardization. Calculating risk was time and labor intensive, so personalization was out of the question. But recent advances in artificial intelligence and machine learning are enabling custom-tailored policies and solutions. And with Israeli AI start-ups averaging exits of over $120 million, Tel Aviv has fast become a global hub for AI innovation. This flood of VC capital has brought with it world-class talent. Today over 3,000 data scientists work in Israel, with many now choosing to apply their AI expertise to InsurTech.
Since 2015, the number of Israeli InsurTech start-ups grew by over 300 percent to 74. And of the top 15 InsurTech companies worldwide, one third were founded either in Israel or by an Israeli. Some of the most exciting Israeli InsurTech companies to date include:
- Founded in 2015 by two Israeli entrepreneurs, New York-based Lemonade is a relative newcomer to the InsurTech pack that has already had a major impact on the industry. Lemonade’s mobile-first platform and novel peer-to-peer model provide a simple, refreshing take on insurance that’s resonated (with millennials and Gen-Zers especially). However, despite their light and casual vibe, Lemonade brings some serious technical and capital firepower to the table. The company is valued at $2 billion, has raised $480 million to date, and is set to IPO later this year.
- PassportCard was established in 2012 as a joint venture between an Israel-based insurer and an international holding company. Its aim is to completely reinvent travelers insurance. With one simple card (that connects to a patented smart insurance platform) any PassportCard holder can access what is functionally a debit card, but that draws upon instantly and autonomously calculated insurance premiums instead of their own bank account. PassportCard already boasts over one million customers in Israel alone, with many more joining every day from around the world.
- Medintec was established in Israel in 2000 by experts from the insurance and healthcare industries. Their flagship MedinClaim product provides an innovative flexible solution for automatically sorting, processing and collecting billing claims. Leveraging AI and machine learning, the platform allows general out-of-the-box automation to be seamlessly combined with specialized expert knowledge. Medintec’s clients include insurance giants such as the Israel National Insurance Institute, AIG and many more.
- Founded in 2016 with the goal of transforming small business insurance, Next Insurance creates plans for niche professions often overlooked by larger insurers. Given the rise of the freelancing and gig economy, Next Insurance believes current insurance policies don’t provide small business owners the coverage they need. As a result, many entrepreneurs either overpay or risk under-coverage. Next Insurance leverages extensive customer data and best-in-class actuarial expertise to craft policies tailor-made for specific professions. They then bundle this unique offering in a simple, intuitive digital interface. And with over $130 million in venture capital raised to date, this model is clearly working.
The Startup Nation’s InsurTech ecosystem fits a longstanding pattern in Israel: Not only has the country pioneered fields like cybersecurity and artificial intelligence. From agriculture to insurance to retail to transportation, the Innovation Nation is also leveraging its technological ingenuity to transform legacy industries.
For more information, please visit http://www.itrade.gov.il/ or contact your local Israel Economic Attaché.