Insurance innovation with a cryptocurrency flavour

25 August 2021 Gareth Stokes

The acceptance that innovative technology will revolutionise the insurance sector’s approach to claims, data and data modelling and emerging asset classes is illustrated by the ongoing push by one of the world’s oldest, traditional insurance institutions into the Insurtech space. Recently, Lloyd’s Lab announced its seventh intake of Insurtech start-ups to its innovation accelerator programme, confirming the global insurance market’s commitment to digitalisation and modernisation of traditional insurance, insurance broking and reinsurance busines models. These 11 start-ups will focus on creating simpler products for customers, including building solutions related to cryptocurrencies.

330-years of insurance legacy and tradition

Lloyd’s needs little introduction to insurance industry stakeholders. Formerly Lloyd’s of London, it is an insurance and reinsurance market located in London and practically as old as the industry itself. Readers are reminded that Lloyd’s is not a company, but a global network of specialist underwriting expertise, governed by the Lloyd’s Act of 1871 and subsequent Acts of British Parliament. The Lloyd’s network comprises more than 50 leading insurance companies, over 200 registered Lloyd’s brokers and more than 4000 local cover-holders, including brokers in South Africa. Herewith a link to a YouTube video for anyone keen on a refresher of how the world’s leading insurance platform operates.

Fintech and Insurtech is luring in billions of dollars in investor capital, with financial services firms leading the charge. The Naspers Foundry, a SA-focused start-up funding initiative that helps talented and ambitious technology entrepreneurs to develop and grow businesses that improve people’s daily lives, has made some big moves in the space recently. In August, it led a R160 million investment into digital insurance platform, Naked Insure and in July, funded digital short-term insurance distribution platform, Ctrl, to the tune of R34 million. Competition for start-up funding can be tough; but it can be even more difficult to come up with an innovative insurance product or solution to begin with. 

Developing innovative insurance products and solutions

The Lloyd’s Lab global programme was established to identify teams at the forefront of applying technology in insurance, and then working with the teams to develop ‘ideas’ into practical solutions for the insurance market. The 2021 programme received 179 applications, from which only 11 were chosen. Each of the teams impressed an expert panel of Lloyd’s and market stakeholders during a competitive pitch process, where they presented their innovative insurance product ideas for the market. Selections were made based on solutions for three key themes, namely claims, data and models and cryptocurrencies. 

Ed Gaze, Lloyd’s Lab Senior Manager, said: ‘We are excited to welcome the new teams to the Lloyd’s Lab for our seventh cohort; the decision to invite Insurtech start-ups with expertise in digital currency and cyber follows an increase in new and sophisticated attacks targeted at businesses, individuals and governments, which pose an increasing challenge for the insurance industry”. We thought it worthwhile to share the type of innovation that is cracking the nod from the insurance market, just in case any of our readers are preparing to announce their first foray into the world of insurance or finance technology. Herewith a summary of the latest Lloyd’s Lab intake, as announced by the institution: 

  • Sotera: Uses machine learning to provide insurers with data to price risk on unusual objects such as antiquities and create digital identities for legitimate objects to support better anti-money laundering and more sophisticated insurance products.
  • Koop: Specialises in commercial robotics and autonomous vehicle developers and operators. They use a modular, API-powered platform enabling competitive underwriting at scale.
  • ICEYE: Provides near real-time flood extent and depth data enabling deployment of resources and calculate overall flood losses with speed and accuracy.
  • Jungle: An artificial intelligence platform designed to resolve underperformance arising from operational complexity in renewable energy and industrial processes.
  • Falkonry: Enables predictive operational excellence for manufacturing organisations through discrete and composite digital twins of operational systems at edge, site or cloud.
  • YEO Messaging: A secure private messaging platform where the sender can always be assured of privacy and control.
  • Hubvia / Brush Country Claims: An Insurtech solution built to streamline the P&C claims handling process by providing ultimate claims control and expedited time to settlement.
  • Merkle Science: A predictive cryptocurrency risk and intelligence platform helping companies and governments detect, investigate, and prevent illegal activities.
  • Superscript: Combine broking and underwriting expertise with technology and data science to create relevant insurance solutions for modern businesses.
  • BirdsEyeView: Harness space-data and innovative parametric solutions to provide uncomplicated insurance for severe-weather risks. 

SA firms are making waves too

Although there were no South African teams in this round, the programme has featured local firms in the past. Inclusivity Solutions, a start-up focused on designing, building and innovating digital insurance solutions to address the protection gap in emerging markets was included in the seventh cohort. Another firm, Tautona AI, is working with insurers in the claims automation space thanks to the programme. “South Africa has a lot of technically skilled people and something of a start-up culture,” says Easvarie Naidoo, Lloyd’s General Representative and Head of Compliance for South Africa. “We have worked with and been impressed by a few SA teams in the lab so far, and we often come across Insurtech firms in London who had their roots in SA”. 

FAnews, doing our part…

From AI to machine learning; from API-powered platforms to predictive analytics; and from autonomous vehicles to robotics, insurance stakeholders are finding ways to apply technology to improve customers’ risk outcomes. FAnews loves the direction in which fintech and Insurtech are steering the financial services industry; but we remain committed to ensuring that the human element of insurance is developed and protected too. To this end we have thrown our weight into The Insurance Apprentice (TIA) programme, now also in its seventh year. 

Lloyd’s is long-standing partner to the initiative, offering an invaluable ‘experience prize’ to the successful apprentice. “The Lloyd’s sponsorship is integral to the competition and we appreciate Lloyd’s involvement and commitment over the years,” says Rianet Whitehead, founder of TIA and co-founder of FAnews. “This partnership has grown with time and we know that Lloyd’s involvement is one of the main reasons why people enter the competition”. The Insurance Apprentice 2021 wrapped up on Thursday, 19 August 2021, and we encourage readers to watch The Insurance Apprentice 2021 Grand Final on YouTube or Facebook. 

“The Insurance Apprentice gives participants a chance to demonstrate innovative, entrepreneurial and creative thinking as well as providing a platform for talent,” concludes Naidoo. “Here at Lloyd’s, our drive is to firmly establish the Lloyd’s marketplace as a destination that is truly inclusive, drawing the most talented people to come and work in a modern and exciting working environment”. 

Writer’s thoughts:

The competition for boasting rights in the fintech and Insurtech space is similar to that seen in the world of professional sports. The few who succeed spend thousands of hours developing and perfecting their skills, often getting selected for training camps or development programmes before they make it to the top. Their ultimate prize is the reward that goes with taking an innovation to market... Do any of the 2021 Lloyd’s Lab cohort ideas impress you? And are you keeping your eye on any new technologies that could improve outcomes in your financial or risk advice practice? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts [email protected].

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