Insurtech Getsafe has delayed expansion despite experiencing record sales of policies
May 4, 2020
Getsafe, which allows consumers to buy and manage insurance from their smartphones and offers home content insurance to consumers in both its native Germany and the UK, has delayed its expansion into other European markets, per Verdict. Due to the lockdown measures implemented following the coronavirus outbreak and ensuing uncertainty, the insurtech has decided to halt its planned venture into Austria and France.
A silver lining of the crisis for Getsafe is that demand is increasing for digitally accessible protection products, such as home contents insurance.
Getsafe's home contents insurance is experiencing a boost amid lockdown. Getsafe's focus on covering home belongings from damage has struck a chord among consumers since, confined to their homes, these are more likely to get worn out from increased use. March was the company's strongest month since its founding in 2015, recording over 10,000 policies sold, with April suspected to exceed this figure.
The coronavirus pandemic is leading consumers to demand digital ways to access financial products. While taking out insurance via a smartphone may previously have just been considered a convenient option, it could now be seen as a necessity. Amid fears of being infected, consumers are shunning paper-based processes — for example, cash withdrawals in the UK are dramatically declining.
Getsafe offers a 100% contactless onboarding experience, as consumers can pick their insurance through the app. Consumers can also adjust their coverage "within seconds." These features could provide Getsafe with a competitive edge over incumbent insurers, which have been found to "underperform in digital," according to Gartner research.
Nevertheless, amid the global economic downturn and lack of access to growth capital, insurtech startups should prioritize caution and delay unnecessary expansions. Early reports indicate that Q1 2020 will be the lowest point for insurtech startup funding since 2018, according to Forrester Research. This is in line with quarterly global fintech funding, which is also significantly down, and demonstrates the difficult economic times ahead for startups.
As insurtechs are less likely to raise capital, they must show extra caution as to where they allocate their limited resources — especially since there is no certainty as to when the pandemic will recede and markets recover. It is therefore wise of Getsafe to halt expansion into new markets while European countries remain in lockdown, and until there is more clarity from governments as to exit strategies. In line with Getsafe's approach, insurtechs should focus on monetizing their existing users rather than focusing on growth and costly expansions.
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Source: Business Insider