Slice Labs, the developer of on-demand, pay-per-use insurance for homeshare companies and others, has started offering use of the platform it created to outside insurers and startups seeking to launch new products.
Slice co-founder and CEO Tim Attia told Carrier Management that the cloud-based service offers the infrastructure that Slice used for its initial on-demand, homeshare and rideshare coverage. (Coverage purchased on Slice’s platform is written through a national partnership wit Munich Re.)
“We’re renting our digital insurer [infrastructure] to other carriers or other companies that want to be insurers, that want to embed insurance in their products,” Attia said. “We’re providing them a turnkey insurer.”
New York-based Slice had indicated it was preparing to take this step last October when it announced $11.6 million in new funding.
The Insurance Cloud Services platform option is digital and handles options including distribution (wholesale or broking). It also comes with a carrier license and the capacity to take risk. It is fully embeddable via advanced programming interface, or API, and has functionality that covers pricing, rating, licensing, real-time and automated underwriting, servicing, and capacity. Slice’s pitch is that the ICS option can be easily integrated to establish and test insurance products in a digital environment. There is also a subscription agreement with a monthly subscription fee, and Slice will take a percentage of premium to manage the digital insurer on its behalf.
“We’re basically renting it to them,”Attia said.
The idea is similar to Amazon, Attia explained, where some individuals or companies moved some of their work to Amazon’s data center because it is cheaper, on-demand, and they only buy what they need, including maintaining data centers themselves.
Attia said that Slice already has two customers. While he declined to disclose their names, he said one is a large domestic carrier with more than $10 billion in premiums written, and the other, in the U.K., has more than $60 billion in premiums written. The one in the U.K. will take on the risk itself, and the U.S. company will outsource it to Slice, he said. (Approval for use of the platform is also pending in the European Union).
There are other startups that have pursued variations of Slice’s strategy of licensing its platform out to others. Lemonade, for example, invited other insurers last October to use its sales platform and made its API available to developers of commerce sites, real estate apps, financial advisers, bots, IOT and smart home products.
Collaboration Above and Beyond
Slice’s move to license its on-demand insurance platform to carriers and others represents a change within the InsurTech market from more grandiose ambitions just a few years ago, argued Mike Fitzgerald, a senior analyst with research firm Celent, which focuses on insurance technology.
“When startups started getting involved in insurance [a few] years ago…there was a lot of discussion about disruption—kind of like Uber, Kodak, Blockbuster—and people were saying that is going to happen to insurance,” Fitzgerald said. “But what our research indicated was it would be more of a partnership model.”
He said some disruption is still expected but that is not necessarily the dominant trend.
“What we have in the Slice offer is an insurtech startup that has now launched, and they are offering their platform to insurers, to traditional insurers,” Fitzgerald said. “This is the very opposite of disruption. It’s ‘let’s work together and take the industry somewhere where we really couldn’t get working independently.'”
Attia said that collaboration with possible disruption was a fair assessment right now of Slice’s Insurance Cloud Services platform, as it is “hard to see looking forward” whether it will become disruptive over time. But the potential, he said, is there.
“Carriers want to be digital, but the challenge they have is that digital isn’t just about technology,” Attia said. “They have to change their products. They have to change their operating model. They have to change their cost structure.”
Where Slice comes in is that it offers a “separate, fully operational digital insurer which performs significantly better in terms of expense, that they can just bring a product to and enjoy the benefits of lower expense without having to touch the mother ship at all.”
Source: Slice Labs