In an insurers ideal world, thered be a profitable policy for every conceivable risk. Click once, and youre covered.
In the real world, however, insurance coverage hasnt kept up with the social and economic changes of recent years. Sharing economies have gained scale. Jobs have gonefrom full-time to gig-based. And the vast millennial generation has entered adulthood intent on completing any complex transaction in a couple of minutes online.
Insurance policies, in contrast, look the same as they always have.
But if it seems like old-school terms and sales methods no longer fit, give it some time. If theres a way to make money selling coverage, assume insurers are working on it. If not a big insurer, then probably a startup.
Insurance is such a big sector that even niche categories have the potential for building large businesses, says Caribou Honig, a founding partner atQED Investors, a VC firm with a number of insurance investments. Startups are also competing with incumbents by building better interfaces to sell policies via smartphones.
So far this year, insurance-focused startups have raised more than $700 million in venture funding,according to Crunchbase data, with significant backing from both traditional VCs and large insurers. The lions share of investment has gone to companies pioneering and popularizing coverage categories and delivery models, with a particular focus on millennial customers.
Here are some of the areas new insurers are targeting (outside of healthcare, deemed too massive and politically in flux to address here).
Theoretically, people might like the idea of insuring personal belongings or big life events like weddings and world travel. In practice, however, few of us have time and inclination to shop for policies.
An emerging breed of on-demand insuring apps, however, are betting that more people will choose to buy coverage if doing so is fast, easy and affordable. Several are also folding in options to snap pictures of possessions to be insured, with quick quotes to follow.
The changing nature of work has also created demand for new kinds of coverage.
One of the most richly funded players in this space is Trv, which has an app for quickly insuring personal and work items like laptops, smartphones and high-end cameras. The five-year-old company raised a $45 million Series D round in April led by reinsurer Munich Re, bringing total funding to nearly $90 million. The company has been operating in Australia and the U.K., and is planning a U.S. launch later this year.
Cover, which just closed an $8 million Series A, offers a similar service. Customers take a picture of the item they want to insure and Cover offers a policy, underwritten by a partner insurance firm. Another player, New York-basedSure, has focused on on-demand coverage for events. The company raised an $8 million Series A round in January to build out its mobile app offering quick insurance quotes for things like weddings, baggage, flight cancellations and pet health. (Like Cover, Sure doesnt actually underwrite the policies it sells. Thats done by big insurers like Nationwide, Chubb and MetLife.)
Standard auto insurance policies arent always the best fit for people who drive very little or who borrow a car for a short time. Startups are attempting to deliver to these and other use cases.
One of the most richly funded insurance startups over the past few years isMetromile, which insures based on how much customers drive. Rack up few miles, and pay little beyond a small monthly base rate. Drive more, and it goes up. U.K.-basedCuvva, meanwhile, has raised seed funding to build out insurance offerings for short-term use of a car, for people learning to drive and for people who drive very little.
Startup home insurance providers are also stepping up to compete. The group includes two-year-oldLemonade, a provider of homeowners and renters insurance that uses AI to price policies, while pledging leftover premium money to charity. The New York-based company has raised $60 million from VCs, plus an April investment of undisclosed size from insurer Allianz.
Silicon Valley-basedHippois also marketing itself as a new kind of homeowners insurance company, with policies that offer stronger protections for common valuables like home electronics. Another newcomer in the space, Utah-basedSwyfft, which markets itself as a provider of speedy quotes at competitive prices, raised a $7.5 million Series A earlier this year.
For short-term rentals, meanwhile,Slice Labsis partitioning off a space. The two-year-old company offers policies for homeshare hosts to cover property theft, damage to electronics, bug infestations and other problems caused by bad guests. Slices longer-term goal seems to be to position itself as an insurer for the gig and sharing economy, and its also currently testing a new offering for rideshare drivers.
Like rideshare driving, many of todays most common jobs either didnt exist or werent nearly so popular years ago. The changing nature of work has also created demand for new kinds of coverage.
Insurance coverage hasnt kept up with the social and economic changes of recent years.
Next Insurance, founded last year, sells coverage for yoga instructors, photographers, home contractors and others whose needs dont always fit with standard insurance policies. The Silicon Valley company raised $48 million to date from VC and insurance industry backers.Bunker, which bills itself as an insurer for freelancers and independent contractors, is also scaling up. The San Francisco company closed a $6 million Series A round in May.
Lastly, theres life insurance. While this isnt usually a top-of-mind topic for millennials, it is expected to become more important down the road, particularly as more members of the generation become parents.
A handful of venture-backed companies are looking to update the buying process. One isLadder, which has raised $16 million to build out a platform for offering direct-to-consumer term life insurance online. Another, Brooklyn-basedFabric, has raised $2.5 million for its digital platform offering instant quotes on accidental death coverage, as well as broader life insurance policies.
Honig sees life insurance as one of the most promising areas for startups, which have the potential to supplant the longstanding model of face-to-face sales. The typical life insurance product is overly complex and too opaque, which is in a sense OK when its pushed through a face-to-face channel, he says. But it is a problem for consumers looking to buy online.
With all the varieties of coverage out there, it remains the case that no one can affordably insure a venture capital investment portfolio. There are just too many risky wagers by design.
That said, insurance may be a safer bet than other sectors. It is a massive market. And given the hefty valuations industry leaders command, its easy to envision at least a few of todays early-stage companies joining the unicorn club.
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A college professor was reportedlyfired for writingthe Sandy Hook Elementary School shooting did not happen.
Noah Pozner was 6 years old when he was fatally shot along with 25others in Newtown, Connecticut on December 14, 2012.
His parents, Lenny and Veronique Pozner, wrote an opinion piece in the Sun Sentinel last month discussing “conspiracy theorists that deny [their] tragedy was real.”
The Pozners wrote,
To our horror, we have found that there are some in this society who lack empathy for the suffering of others… They seek us out and accuse us of being government agents who are faking our grief and lying about our loss.
They went on to mention James Tracy, who taughtcourses at Florida Atlantic University about how different types of media report social andpolitical issues, according to The Washington Post.
On the Sandy Hook HoaxFacebook page, Tracy reportedly wrote the shooting was staged in order to introduce laws to tighten gun control.
He claimed it was an “elaborate hoax,” noone actually died and the parents of victims were really “local coconspirators” trying to make money.
In the Sun Sentinel piece, the Pozners saidTracy sent them a letter requesting proof of their son’s existence.
We found this so outrageous and unsettling that we filed a police report for harassment. Once Tracy realized we would not respond, he subjected us to ridicule and contempt on his blog, boasting to his readers that the unfulfilled request was noteworthy because we had used copyright claims to thwart continued research of the Sandy Hook massacre event.
The Pozners then called for Florida Atlantic University to fire Tracy, who apparentlypreviously suggested other recent mass shootings were staged as well.
On Tuesday, the university releaseda statement. It read,
Florida Atlantic University today issued James Tracy with a Notice of Termination. This follows the Notice of Proposed Discipline issued to James Tracy Dec. 16. The effective date of the termination is Jan. 8, 2016. James Tracy was scheduled to teach three classes during the upcoming Spring semester. Alternative instructors will be assigned to teach those classes.
In a letter to Tracy, university officials wrote the termination is also due to his failure to submit necessary documents regarding “outside employment or professional activity” for the past fewyears as was requested.
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Bay Minette, Alabama, July 18 (Reuters) – Dr. Nicole Arthur, a family practice physician, was trained to avoid Cesarean deliveries in child-birth, unless medically necessary, because surgery increases risks and recovery time.
But she has adjusted her approach since arriving last year at the 70-bed North Baldwin Infirmary in rural, southern Alabama.
Low patient admissions and high costs mean the hospital does not have doctors on site around-the-clock to administer anesthesia in the case of an unexpected emergency Cesarean.
As a result, Dr. Arthur performs the surgery if there are any signs of complication, rather than waiting and running the risk that comes with the 20 to 30 minutes it takes for an anesthesiologist to arrive in the middle of the night.
“It’s better for me to do a C-section when I suspect that something may happen,” she said of her new strategy. “Getting the baby out healthy and happy outweighs some of the risk.”
Physicians in rural communities across America are facing the same tough choices as Dr. Arthur. Hospitals are scaling back services, shutting their maternity wards or closing altogether, according to data from hospitals, state health departments, the federal government and rural health organizations.
Nationally, 119 rural hospitals that have shut since 2005, with 80 of those closures having occurred since 2010, according to the most recent data from the North Carolina Rural Health Research Program.
To save on insurance and staffing costs, maternity departments are often among the first to get shuttered inside financially stressed rural hospitals, according medical professionals and healthcare experts.
“It’s been a slow and steady decline,” said Michael Topchik, the National Leader for the Chartis Center for Rural Health, about maternity ward closings. “It’s very expensive care to offer, especially when it’s lower volume.”
More than 200 maternity wards closed between 2004 and 2014 because of higher costs, fewer births and staffing shortages, leaving 54 percent of rural counties across the United States without hospital-based obstetrics, data from the University of Minnesota’s Rural Health Research Center show.
The trend has escalated recently even though the national healthcare law, known as Obamacare, was designed in part to help rural hospitals thrive. But unpaid patient debt has risen among rural hospitals by 50 percent since the Affordable Care Act was passed, according to the National Rural Health Association, especially in states that decided not to expand Medicaid – the state and federal insurance program for the poor.
The outlook for these hospitals was not poised to improve had Congress approved legislation to replace Obamacare. Senate Republicans’ proposed cuts to Medicaid would have pushed about 150 more rural hospitals into the red, according to the Chartis Center for Rural Health, mainly in states that voted Republican in the last election.
But late on Monday, Senate Majority Leader Mitch McConnell said the Republican effort to repeal and immediately replace Obamacare will not be successful, after two of McConnell’s Senate conservatives announced that they would not support the bill
The consequences go beyond politics.
When local doctors and midwives leave town, rural women lose access to essential services. Many skip or delay prenatal care that could prevent complications, premature birth or even death. The U.S. infant mortality rate is among the highest in developing countries at 5.8 deaths per 1,000 births.
Pregnant woman in rural areas are more likely to have their deliveries induced or by Cesarean section that, while potentially life-saving, are more expensive and risky than a normal vaginal birth, according to patients, medical professionals and researchers.
Almost a year after her second son’s birth, Courtney Cross is still repaying money she borrowed because of the smaller paychecks and larger gas bills she had from driving 60 minutes each way to a specialist in Mobile, Alabama.
“There were some days I had to reschedule because of the money factor,” said Cross, a medical technician and mother of two, who some months made the trip multiple times. “I had to make money.”
Cross is not alone. The most common reasons for the hospital closures are people and money. More and more people are moving to urban areas in pursuit of work and a better paycheck. And in most states, lower revenue from insurance and U.S. government payments are pushing these hospitals into financial stress, particularly in states that did not build out their Medicaid programs as Obamacare allowed.
“The majority of births in rural America are paid for by Medicaid, and Medicaid is not the most generous payer,” said Diane Calmus, government affairs and policy manager for the National Rural Health Association. “For most hospitals it is a money losing proposition.”
This is the main reason why Connie Trujillo shuttered her midwife practice this spring in Las Vegas, New Mexico. The local hospital had closed its maternity ward, and the closest hospital to deliver babies was at least 60 miles away. She sees more elective inductions because the patients live far away and can’t afford to go back and forth.
“Some of them just don’t have the resources,” she said. A year after shuttering, the hospital is trying to hire additional staff to reopen the ward.
The number of induced U.S. deliveries nationally has doubled since 1990 to about 23.3 percent, but rates are significantly higher in rural areas, where it is routinely offered to women traveling long distances, especially if the weather is bad.
Induced labor and surgery come at a high cost. Commercial insurance and Medicaid paid about 50 percent more for Cesarean than vaginal births, according to a 2013 Truven Health Analytics report. The report said Medicaid payments for maternal and newborn care for a vaginal birth was $9,131 versus $13,590 for a C-section.
In largely rural West Virginia – where the Summersville Regional Medical Center became the latest hospital to stop delivering newborns earlier this year – elected inductions for first time mothers rose to 28.7 percent in 2015 from 24.1 percent in 2011, according to data provided to Reuters by the West Virginia Perinatal Partnership, a statewide effort to improve care.
“Inductions allow the physicians to manage their case loads and timing of deliveries,” said Amy Tolliver, director of the Perinatal Partnership. “We know that inductions are happening in small hospitals that have difficulty with staffing.”
To address staffing issues at Dr Arthur’s hospital in Alabama, the facility paid temporary doctors for a year to keep the department open when one of its two maternity doctors stopped doing deliveries.
“It’s important to have access (to obstetrics),” said hospital president Benjamin Hansert, who also organized a group of doctors from Mobile about 40 minutes away to cover some of the shifts so that staff doctors would not always be on call. “Where the mother goes for care, the rest of the family will follow.”
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