Next Insurance now serves over 130,000 customers, up from 100,000 when it raised $250 million in Series D funding last September. Founded in 2016, Next Insurance uses AI to offer tailored coverage to small businesses via a digital process, including general and professional liability, commercial auto, and workers’ compensation.

Next Insurance uses tech to surmount the shortcomings of the traditional small business insurance offerings.

• Access. Seventy percent of small businesses are underinsured in the US due to difficulties around accessing and managing policies, whereas Next Insurance’s digital platform makes it more convenient to pick coverage and offers online quotes in minutes.
• Pricing. In addition, the pandemic has squeezed small businesses’ finances, making them eager to find cheaper coverage. Leveraging AI, the insurtech tailors policies to over a thousand types of business, which usually produces more affordable terms than do the industry’s traditional one-size-fits-all policies. Next Insurance’s workers’ compensation coverage, for example, starts at $14 per month, whereas insurtech Insureon charges $47. In addition, the insurtech just acquired data analytics provider Juniper Labs in December to get an even better picture of a business’s risks, which enables it to offer even more competitive pricing.

Last year’s fast growth among small business insurtechs underscores incumbents’ need to implement AI capabilities or risk seeing their gross written premiums stagnate. Pie Insurance, which also leverages data analytics to cover small businesses, exceeded $100 million in cumulative written premium last October.

Through a combination of AI and well-rounded coverage options, these insurtechs can meet all of a small business’s insurance needs, without requiring them to take out additional policies with other insurers. As a result, incumbents could lose out on scoring new customers over the coming years, with the US small business insurance sector expected to grow to $12 billion by 2025, from $3.7 billion in 2020, per a March report.

To hold on to their market share and better compete with insurtechs, incumbents should focus on developing AI-powered solutions similar to the new challengers’. One quick way to do this would be to partner with or acquire a data analytics provider, as did Next Insurance.

Source: Business Insider