Tracking the emergence of the growing LifeTech ecosystem.
New York Life Ventures has identified an emerging “LifeTech” start-up ecosystem that is distinctly different from the prevailing InsurTech landscape. While InsurTech is an umbrella term applied to the many segments of new technologies that have implications for the insurance space, LifeTech embodies technologies that address the challenges specifically faced by life insurance companies. The LifeTech universe includes start-ups within established technology categories like data and analytics, cloud architecture, cybersecurity, RegTech, HealthTech, and HR Tech.
"The emerging LifeTech ecosystem includes aspects of InsurTech and FinTech, but is truly its own universe. Beyond those two established categories, we see a substantial group of start-ups that deliver value propositions more appropriately identified as LifeTech due to their significant relevancy to the life insurance industry. In fact, only about 20 percent of the start-ups we track overlap with the InsurTech world." - Joel Albarella, head of New York Life Ventures
Over the last six years of testing and investing, New York Life Ventures has screened over 1,700 start-ups and facilitated more than 160 “proof of concept” tests that explore the viability of business ideas. From these efforts, the team has identified the following insights on LifeTech and the future of life insurance:
“InsurTech” is an imperfect proxy for life insurance
Life insurance is fundamentally different than other lines of insurance, yet these various lines are often lumped together. New York Life Ventures expects an increased focus on LifeTech as a discreet start-up category and to see other subsectors emerge as well.
Significant opportunities for enabling technologies
Start-ups that aspire to directly compete with established life insurers face significant headwinds. More promise exists for LifeTech start-ups that deliver enabling technologies and find new and creative ways to support the current life insurance value chain.
For example, Trifacta, a New York Life Ventures portfolio company, delivers enabling technology that converts raw data into an analyzable format for companies across a wide range of industries. New York Life has partnered with Trifacta to modernize its analytics platform and has experienced positive impacts in areas like customer relationship management and risk analysis.
The future of life insurance may be found in adjacent technologies
Adjacent technologies in the LifeTech space are those start-ups that aren’t InsurTech focused at all, but whose offerings may become complementary to life insurance companies over time. Two examples of this are scientific wellness company, Arivale, and digital health start-up, Wellth, both portfolio companies of New York Life Ventures. Companies like these represent a growing breed of start-ups that have the potential to significantly impact the future of the life insurance industry.
As Albarella explained, “LifeTech has quickly become a strong focus area for start-up founders and investors. The opportunity to create value in the life insurance space by connecting with those outside the industry is undeniably massive and the corporate venture capital teams of major life insurers are investing accordingly. The growing intersection of technology and life insurance that we’re seeing in LifeTech will surely have profound implications for life insurance consumers, agents, and employees alike.”
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