Summary List Placement
The US-based insurtech has exceeded $100 million in cumulative premiums in its 3.5 years of operating, per PR Newswire. Pie Insurance offers a range of small business insurance, including workers’ compensation, commercial auto, and cyber risk, among others. It operates as a managing general agent (MGA) and leverages data analytics to digitize the insurance process end to end.
The insurtech’s digital, automated offering carries great appeal for the underinsured small business segment, especially amid the pandemic. Seventy percent of US small businesses are underinsured, largely due to the manual onboarding and lengthy claims management processes offered by incumbents.
By contrast, Pie Insurance delivers quotes to small businesses in as little as 3 minutes and also automates the claims process. Moreover, in-person sales of insurance policies have declined during the pandemic, but Pie’s digital model and tools are well suited for its partner agents to continue selling despite lockdowns.
Pie Insurance should press on with its plans to acquire licensed insurers and focus on marketing its cyberinsurance coverage to drive revenue gains.
Acquiring licensed insurers will fast-track Pie to operate as a carrier and increase revenues. Because it operates an MGA, Pie shares profits from premiums with underwriters. But in May, the insurtech raised $127 million to acquire local licensed insurers through its newly formed affiliated company, Pie Carrier Holdings. It should prioritize this strategy so that it can circumvent the limitations of the MGA business model and open up the possibility of earning more on each policy it sells. For example, in June, fellow insurtech Hippo purchased its underwriter Spinnaker Insurance in order to obtain carrier status.
Pie Insurance should also focus on pushing its cyber policies, which is a growth area of the insurance industry. Only 35% of US small businesses have cyber coverage, despite the fact that the average cost of a cyberattack against a small business was $9,000 and their reported frequency of attacks jumped up 14% in 2019. And the threat is only proliferating as more work activity moves online. Pie should capitalize on this convergence of trends to drive premium growth. As an added benefit, competitors such as Next Insurance do not offer cyber policies, so it will help Pie to stand out in an increasingly crowded small business insurtech market.
Want to read more stories like this one? Here’s how you can gain access:
Join other Insider Intelligence clients who receive this Briefing, along with other Fintech forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
Explore related topics more in depth. >> Browse Our Coverage
Are you a current Insider Intelligence client? Log in here.
Join the conversation about this story »
Source:: Businessinsider – Finance