Let's face it: how often do we ask ourselves the question "Why are we actually doing this the way we are? The power of "first principles thinking" is precisely in that - breaking assumptions and getting back to the essence. Insurtechs have fully embraced this approach. By jettisoning existing assumptions and starting over from customer needs, they are turning the insurance industry on its head. They are demonstrating that insurance can be faster, simpler and fairer. In this series on insurtechs, discover how insurtechs are challenging the status quo with first principles - and what you can learn from them.

The philosophical roots of first principles

The idea of first principles is ancient and rooted in Aristotle's philosophy. He saw it as a way to reduce any problem to its foundation. In his view, you had to get rid of assumptions and rebuild from the core. Later scientists such as Isaac Newton applied this principle to formulate the laws of nature. They started from the question: what do we know absolutely for sure? What can we build from there?

It is the mindset that made Elon Musk say, "Rockets are expensive? Let's figure out why." He broke the problem down into its core components, analyzed the cost and found ways to drastically reduce it. The result? SpaceX, which builds rockets at a fraction of the cost of traditional players. This thinking is not just reserved for space pioneers. You can also harness the power of first principles in your work as an advisor . Ask yourself: what do my customers really want? What could be simpler, faster, more efficient?

"I think it's possible for ordinary people to choose to be extraordinary."
- Elon Musk

Insurtechs: frustration as fuel for innovation

Frustration often drives change, and that is exactly how many insurtechs have emerged. For years, the traditional insurance industry was known for slow processes, opaque terms and high costs. Customers often felt lost in the complex forest of policies and claims. This created space for technology-driven startups to jump in and show that things can be done differently.

Compare it to Uber: born out of annoyance with unreliable cabs, it created a platform that offered simplicity and speed. Insurtechs are doing the same thing in the insurance industry. They combine technology with a customer-centric approach. Daniel Schreiber, CEO and founder of Lemonade, one of the best-known insurtechs, put it this way, "Our mission is to replace a centuries-old industry with something built on empathy, technology, and a deep sense of purpose."

The insurtech wave in numbers and technology

The market for insurtechs is booming, with hundreds of insurtechs operating worldwide, focusing on a variety of specialties: from healthcare and loss prevention to AI-driven risk analysis. According to FinTech Global, the global insurtech market reached $26 billion in 2024 and is expected to grow to about $496 billion by 2033, representing a compound annual growth rate of 38%.

This growth is primarily driven by innovations in artificial intelligence (AI), machine learning (ML), cybersecurity and an increasing emphasis on Environmental, Social, and Governance (ESG) practices.

Events like ITC DIA Europe, which takes place annually in Amsterdam, provide a stage for these innovators. With more than 100 insurtechs participating, this is the place where insurers, advisors and tech companies come together to discuss and shape the future of insurance. During this show, the latest technologies are presented, from blockchain solutions to AI-based customer interaction platforms.

Every year, the business intelligence company CB Insights releases a list of most promising insurtechs*. Chances are that some of these insurtech companies, apps, platforms, marketplaces and tools will also become active in the Netherlands.

Disruptive initiatives are a threat to the status quo and tend to be viewed skeptically, as are insurtechs. Many insurtechs focus primarily on growth and market share, often at the expense of immediate profitability. This raises questions for traditional insurers, who are fairly comfortable achieving stable margins.

Thereby, the impact in the market of insurtechs would be limited. Calculated in percent market share, this is of course true; however, many insurers have been around for a hundred years or more, insurtechs for only a few years. Insurtechs, however, use very rapidly scalable technology and business models and can grow exponentially.

Therefore, insurers realize that they cannot miss the boat. They now not only invest in insurtechs, but simply buy these startups or work intensively with them. Like Allianz: they are working with Lemonade to optimize their own processes. Or Nationale Nederlanden who introduced the British insurtech Laka for bicycle insurance in the Netherlands.

The Insurers' Association actively encourages cooperation between insurers and insurtechs through the open InsurTech Platform. The Alliance - as well as many international insurers - have a structural partnership with Plug and Play InsurTech, the insurtech innovation platform from Silicon Valley/Munich.

The signal is clear: insurtechs are no longer mavericks, but core players in the industry.

Are Insurtechs only small startups?

Asurion is the world's largest technology care company, helping more than 300 million customers get the most out of their devices, ranging from phones and laptops to home appliances. With 24/7 service and a network of more than 730 repair stores, Asurion provides fast and affordable repairs, often within 45 minutes. This makes Asurion a leader in technology insurance and customer focus.

Started in 2014 in Germany, Wefox is an ecosystem that connects insurers, advisors and customers with the aim of streamlining processes and making collaboration more efficient. It has more than 3 million customers in Europe and was valued at €4.5 billion in 2022. The company, which acquired TAF, among others, in the Netherlands, is now undergoing a major restructuring to manage its rapid growth.

Lemonade was one of the first to turn the traditional insurance model on its head. With an AI-driven platform, customers can purchase a policy or file a claim within minutes. The company has more than 1.6 million customers and is known for their unique profit model: a portion of premium income is donated to charity. Transparency is key, and that combined with the desire to make a positive impact appeals especially to younger generations.

Root Insurance uses technology to analyze driving behavior through an app. This allows them to tailor premiums based on how safely someone drives. No more standard rates, but personalized premiums based on behavior. Root now has more than 2 million customers and operates in several states in the US. This model is not only fairer, but also a strong motivator for safer driving behavior.

Oscar Health focuses on the healthcare industry, offering customers direct access to physicians through a user-friendly platform. The company now serves more than 1 million members and scores an impressive customer satisfaction score of 97%. No long waits or hassles with insurance paperwork, just fast, personalized care.

By comparison, Nationale Nederlanden serves 6 million customers in The Netherlands, Allianz Benelux serves 2 million customers.

Bolttech - The world's best-scaled insurtech

Bolttech is one of today's most notable insurtechs. This Singapore-based company raised more than $100 million in December 2024, valuing it at $2.1 billion.

What makes Bolttech so special? First, it is their broad focus on ecosystems. With more than 800 distribution partners and 200 insurance companies in over 30 countries, it is among the largest insurtech platforms worldwide. This ecosystem enables partners to quickly access a wide range of solutions, including device protection, life insurance and property insurance.

Bolttech makes intensive use of technology such as artificial intelligence (AI) and machine learning (ML) to speed up processes such as underwriting, but also enables personalized insurance solutions. IoT integrations play a crucial role here, for example in claims prevention and real-time monitoring.

One of their most notable products is device protection, which insures smartphones, laptops and other devices against claim. Thanks to partnerships with major telecom companies, customers can purchase insurance right at the time of purchase, making for a seamless experience.

Also inspiring is the accessibility and inclusiveness Bolttech strives for. By partnering with local distributors, it reaches millions of customers worldwide, regardless of location or income. The scale and diversity of their offerings - ranging from traditional insurance to innovative solutions such as on-demand and cyber insurance - make Bolttech a true pioneer.

What you can learn from insurtechs

Insurtechs have proven that the insurance industry can be simpler, fairer and more customer-centric. By thinking from first principles and using technology smartly, they have raised the bar for the entire industry. But this also presents opportunities for you as an advisor. By learning from their approach and collaborating with these innovators, you can better serve your clients and position yourself as a modern, forward-thinking professional. Here are a few insights:

Embrace Technology: Insurtechs show how technology can simplify processes and improve the customer experience. Go targeted to find technology that makes your life easier and improves customer experience.

Be Transparent: Clients appreciate simplicity and honesty. Take a cue from insurtechs and make sure your advice is clear and understandable.

Offer Preventive Solutions: Help clients not only with insurance, but also with ways to prevent claim . This adds immediate value and strengthens your position as a trusted advisor.

Target Niche Markets: Insurtechs often target specific audiences, such as cab drivers, small business owners or microinsurance. By sharpening your focus, you can differentiate yourself in a competitive market.

Collaborate with Insurtechs: Don't see insurtechs as competitors, but as partners. Collaboration can give you access to innovative products and services that benefit your customers.

In a subsequent article, I will cover some compelling examples of insurtechs and how they are innovatively offering insurance products, demonstrating that the future of insurance is already possible.

A former intermediary in 2022, Jack Vos founded insurtech Onesurance.ai, which provides scalable AI solutions for insurers and intermediaries with the goal of improving customer service.