Most of the consumers don’t trust their insurers – every survey we’ve seen confirms this finding. Worse, insurtech startups are hammering the incumbents. What do they do to win trust?

Our research points to six causes of mistrust in insurance, as detailed in a previous article.

Worse, insurtech startups are hammering the incumbents. Globally, there are 1,552 insurtech startups across 14 categories through Q3 2019, according to They have cumulatively raised $31B. Each one believes it can disrupt their niche and steal market share from what they perceive to be an inadequate incumbent.

But are insurtechs more trustworthy? How? We have looked for some examples to see how exactly insurtechs are winning trust:

#1 Too often buyers are unclear what they are buying. The Financial Conduct Authority issued a rebuke to the industry in its report Smart Consumer Communications citing the “fog” of industry jargon, and the “maze” of bureaucratic processes that confuses consumers.

  • How insurtechs are winning trust: Pluto is shaking up travel insurance simply by explaining terms more clearly: “Explanations in plain English, and it’s easy to tailor your cover and see instant price changes. So it’s clear what you’re buying and what you’re covered for.” All data policies, encryption, data sharing, and hosting is explained in plain English on one page, clearly signposted online.

#2Consumers are sceptical because they don’t understand how insurers arrive at a price,” says Manan Sagar, chief technology officer EMEIA of Fujitsu UK. “I was recently quoted £300 more for my car insurance renewal. Why? If the insurer could say it’s because I did 40 mph in a 30 zone, and am being penalised, then I would understand. In that case, there would be clear facts based on my driving performance data to explain the price rise. But in my case there was no explanation, and that is all too typical.”

  • How insurtechs are winning trust: Wrisk offers contents insurance based on its proprietary Wrisk Score – a risk number calculated with a clearly explained basket of ingredients. Consumers are told how their quote is derived, and what action they can take to lower their premium.

#3 Data breaches destroy trust in financial services brands. Alas, often the insurer perpetrates the violation via a misguided assumption of what consumers will tolerate. Even the best can err. Admiral Insurance built a policy around using Facebook posts to analyse the user’s personality. It claimed Likes, the tendency to use well-constructed sentences, and precision on times when meeting friends, could offer insights.

  • How insurtechs are winning the trust: Ethos life insurance offers coverage with an emphasis on data security and clear boundaries. Founder and CEO Peter Colis says: “We live in a world where incidents like Cambridge Analytica are becoming the norm — which is why I’m an advocate for consumer privacy. The insurtech space — and the life insurance space specifically — should question any practice that interferes with fostering customer trust.”

#4 Consumers want to feel their provider understands their needs. Unfortunately, too many insurance products lack relevance. The coverage may be too broad: such as travel insurers which offer either one month or annual policies, and nothing in between.

  • How insurtechs are winning trust: Zego offers cover for couriers in the gig economy. Uber drivers, Deliveroo and Just Eat couriers, and other quasi-self employed persons are neglected by mainstream insurance. Zego offers policies lasting an hour to a year and uses smart pricing based on actual work hours.

#5 We live in an era when user interfaces are intuitive and smooth. Elite technology companies experiment through multivariate testing to shape Graphical User Interfaces that are beautiful to look at, informative and require no instruction manual. Insurance, by contrast, is lagging in the CX stakes.

  • How insurtechs are winning trust: Homelyfe offers home insurance via an attractive interface. The pitch: “We hear you, no-one likes buying insurance. The least we could do is make it simple. Minimal questions, no paperwork and no fuss.” Quotes take one minute.

#6 Perhaps the biggest cause of reduced trust in insurance is the belief that insurers won’t honour the policy. The concern is more than money. After all, 99.9% of life insurance claims are paid out, 91.6% of critical illness, and 88.1% of income protection, according to the ABI.

  • How insurtechs are winning trust: Rapid payout is fitted as standard to insurtech models. Laka, a bike insurance brand, states: “All claims are handled by our expert team and usually agreed within 1 day. Depreciation or excess? £0.” Founder Tobias Taupitz said: “With Fintech you see every vertical being challenged in financial services, except for insurance — this makes you think ‘why has insurance not changed? Was it because we accidentally chose the best business model outright, decades and centuries ago? Or is there just nobody there to challenge it? The assumption I made quickly was that it is the latter.”

(to be continued)


FintechOS Whitepaper - How insurers can compete with insurtechs and win back customersThis article is part of a series of articles and webinars dedicated to the insurance industry. FintechOS has talked to leading companies from incumbents and startups to accelerators and consultants, to get to the heart of the question that is keeping the industry busy: why is there a crisis of trust in insurance?

For more findings on insurance:
➡️ Watch the recording of the webinar – on demand:
➡️ Download our whitepaper:


On the same topic:

Insurance: The Root Causes of Low Trust
“No Legacy Issues to Deal With”
Claims Management: How To Do It Right
“If Not for the Technology, The Business Might Have Been Shut Down Because of the Lockdown”
Insurance: The Scale of The Crisis
The Greatest Challenge Facing Insurance
What’s In Store For Insurance