Jetty launches home insurance offer with cheap food lure
Insurtech start-up Jetty has launched its customisable home insurance platform, with a completely digital service offering low-cost property, contents and renters insurance along with member benefits, such as discounted food, household goods and other products. The New York-based company, which raised $4m in seed funding, launched this week in Pennsylvania, Illinois, New Jersey, Georgia and Florida, and is targeting urban millennials. Jetty hopes that its member benefits will differentiate it from other insurtech competitors such as Lemonade.
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Many recently launched insurtechs — such as Lemonade, Ladder, and Fabric — have opted for the strategy of going after niche consumer segments. Now, new entrant Jetty, based in New York, is joining in on the trend by targeting city-dwellers specifically with low-cost property and contents coverage, as well as affordable renters' insurance, according to a press release seen by BI Intelligence.

Jetty launched on Tuesday in Pennsylvania, Illinois, Georgia, New Jersey, and Florida, with further expansion scheduled throughout 2017. The company has raised $4 million to date in a seed funding round from investors including Ribbit Capital and Social Capital, among others. It has partnered with reinsurance giant Munich Re to underwrite its policies.

Jetty plans to differentiate from incumbents and other insurtechs in a number of ways. Many of Jetty's products and services broadly resemble those already offered by other insurtechs and incumbents, such as: Property owners' and renters' insurance; contents insurance; add-ons for valuables such as artwork and jewelry; and renters' services (including lease guaranty and security deposit replacement services). However, Jetty has two diversifiers working in its favor:

It's wholly digital. Policy applications, purchases, and claim-filings can all be done online. This gives it an advantage over incumbents' processes which are often bogged down by paperwork-heavy processes and legacy systems.

A "member benefits" option. It offers its users discounts and offers from retail startup partners on products such as food, beverages and housewares, as well as home services — necessities which all come with a high price tag in large cities. Jetty says these deals are designed to promote customers' engagement with their insurer as well as reducing the cost of urban living. It adds that it plans to add more retail partners going forward to further improve these customer benefits.

While Jetty is entering a crowded market, it seems aware of its need to create a strong unique selling point (USP). When the insurance market was still dominated by legacy providers, insurtechs could hope that providing cheap coverage via digital channels was enough to ensure success, as they were the only available option for consumers seeking affordable insurance. Now, however, many insurtechs have made this their core proposition, meaning that new entrants have to try harder to add value for consumers and acquire customers. Jetty has apparently picked up on this necessity and is differentiating via its member benefits proposition, which may ensure its success in the market by adding value for customers and building up brand loyalty through engagement.

The global insurance industry is worth nearly $5 trillion, and insurance companies are at risk of losing a share of this valuable market to new entrants. That's because these legacy players have been even slower to modernize than their counterparts in other financial services industries.

This has created an opportunity for a group of firms known as insurtechs. These startups are leveraging new technology and a better understanding of consumer expectations to increase efficiencies in the insurance industry. Some are helping incumbents deliver better end products, while others are directly competing with legacy players.

Sarah Kocianski, senior research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on insurtechs that looks at the drivers behind the increasing number of insurtech companies, how they are helping or disrupting legacy players in the insurance industry, and where legacy players are innovating off their own backs.

Here are some of the key takeaways from the report:

The opportunity is currently biggest in the US and Europe. That's because these regions have large, very mature insurance industries.

Insurtechs' products and services mostly target retail customers. This includes small businesses and consumers.

Most insurtechs are acting as enablers. This means that they offer products and services that help insurers and reinsurers improve their processes and better serve customers.

Of the main players in the insurance industry, brokers are most at risk of disruption. This is because insurtechs can easily replicate their services and are solving historical industry problems faster than legacy players.

Legacy players are also innovating. In particular, insurers and reinsurers are investing in insurtechs and fintechs working with relevant technologies. At the same time, they are improving their own direct-to-consumer digital interfaces, increasing their disruptive threat to brokers.

In full, the report:

Explains the structure and current state of the insurance market.

Highlights areas where insurtechs can help legacy players modernize.

Describes where insurtechs are competing with incumbents and how their models compare.

Provides case studies of insurtechs.

Outlines the legacy response.

And much more.

Interested in getting the full report? Here are two ways to access it: