How far will they climb? How far can they fall?

Executive Summary

David vs. Goliath. Startup vs. Incumbent. The battle to win insurance customer wallets is heating up as VC-backed InsurTechs grow premiums incredibly fast but fail to show underwriting profits. Here, InsurTech watchers Matteo Carbone and Adrian Jones bring the profit vs. growth question into focus, noting that InsurTech growth has started to slow down a little and that underwriting losses are not always a natural startup phenomenon, as demonstrated by the superior profitability of insurer-backed startups.

Will innovative InsurTech startups rocket past established players?

Those may be some of the unspoken questions beneath a series of articles written by two industry thought-leaders who have been compiling the statutory financial results of a trio of venture-backed InsurTech startups for several quarters.

With off-the-charts jumps in gross premium growth like 205.1 percent for Root from fourth-quarter 2017 to first-quarter 2018, or Lemonade’s 81.3 percent leap between the third and fourth quarters of last year, InsurTech watchers Matteo Carbone and Adrian Jones note that the startups continue to gain ground on existing carriers in the growth department.

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