Contact Us

Our Top Predictions for 2024

By The Boost Team on Jan 4, 2024
3 min read
Boost's Top Predictions for 2024

It’s a new year, and you know what that means: time to break out the crystal ball and make our list of predictions for the biggest trends of 2024. Here’s what we think will take shape over the next twelve months.

#1: Capacity Will Remain A Scarce Resource

It’s no secret that markets were very frothy in the last few years, and the fallout’s probably not over yet. While there’s some indication the Fed might start cutting interest rates this year, the days of free money aren’t coming back any time soon. For the foreseeable future, current profitability is going to outweigh future potential.

In the insurance world, one of the biggest impacts is on the availability of capacity. With greater emphasis on profits, many carriers are likely to be more risk-averse than they might have been a few years ago. New and emerging-risk products in particular might struggle to get the risk capital they need to launch or expand their programs. It’s never been easy for emerging-risk products to get off the ground, but a tight market is likely to ratchet up the already-considerable difficulty. 

It’s not hopeless for companies looking to launch new types of insurance products (in fact, bringing emerging risks to market is a specialty of ours), but the most successful businesses will be market-savvy and well-prepared to get what they need.

Which brings us to our next prediction.

#2 We’ll See a Shakeout Among Insurtechs

In boom times, investors are a lot more willing to open their wallets for a flashy presentation and the promise of eventual returns. This can allow shaky businesses to coast along much longer than they might otherwise - or, frankly, than they should.

With the easy-money tap shut off, insurtechs looking to fundraise will likely need to dig deeper. For new startups, investors will want to see credible GTM plans with a clear plan for profitability. For more established insurtechs, who already have a raise or two under their belts, investors are likely to have more direct questions about growth plan and metrics.

Insurtechs that can point to concrete revenue, product, and customer growth will be in a much better position to raise another round; insurtechs whose business fundamentals are largely unchanged from their previous raise are likely to have a harder time securing additional money in 2024. We’re expecting to see more failures and consolidations this year among companies in the second category. 

While this isn’t a new trend - 2023 had its own share of notable insurance flameouts, though few as spectacular as Vesttoo - we’re likely to see it accelerate over the next twelve months as the market continues to separate reality from hype.

And speaking of reality and hype, we come to our third prediction.

#3 Insurtech AI Will Get Serious

2023 was the year of AI hype, and the insurance industry was no exception. At the most recent ITC conference, AI was unquestionably the focus of most discussions around innovation in insurtech - and also the biggest buzzword. While we expect both those trends to continue through 2024, we also expect to see some growing pains as insurtech AI transitions from an exciting idea to a business reality.

It’s easy to just slap some AI-related marketing copy on a website, but 2024 will likely see the industry move past initial AI excitement to get serious about opportunities and results. Once various stakeholders are able to get hands-on with more AI-powered offerings, it will start becoming more obvious if a particular product or service is genuinely innovating, or if it’s just cashing in on the hype.

Over the next year we’ll likely see increasing discernment on what AI means for insurtech, where it adds the most value in the insurance lifecycle, and how it helps specific products or services. Real, game-changing workflow innovations will be well-positioned to succeed in the market, and to set new standards for how insurtechs get things done. The hype train riders, however, will likely see diminishing returns.

Regardless of what 2024 has in store, it’s sure to be a memorable year. And if this is the year your business wants to finally build that new insurance program or add that new LOB? Let's get in touch.

Previous articles
A businessman types on a calculator while holding a pen. His desk is covered in financial charts.
Build, Buy, or Boost: A Cost Breakdown for Insurance Infrastructure
Feb 28, 2024
A big reason that businesses choose Boost is that we can help them launch scalable, profitable insurance programs much more quickly and cost-effectively than the alternatives. In this blog, we’ll explore the time and cost requirements for using Boost to develop a new program vs traditional build or buy, and how Boost is able to offer a better option. We’ll break it down by the three main components you need for a new program: the MGA infrastructure to support it, the new product itself, and the distribution technology to sell it online. The first step to developing a new insurance program? Being legally permitted to do so. And if you want to create your own product versus just selling someone else’s, your company needs to be an MGA. In this section, we’ll look at the cost and requirements for building a new MGA. There are two big requirements for building your own MGA: hiring the right people, and securing the right partnerships. On the hiring side, you’ll need to build an organization to run a full-stack insurance business. This includes everyone from underwriters to claims administrators to compliance managers to regulatory experts. As you might imagine, this is a significant, ongoing resource commitment, particularly for positions requiring experienced senior employees. On the partnership side, you’ll need to build relationships with reinsurers and other risk capital providers, and with fronting carriers who will allow you to write on their paper. This can be difficult, especially without existing connections. Total estimated cost: $5 million Total estimated time: 2 years When creating an MGA, there’s actually not much difference between building and buying.  You can contract with qualified professionals instead of hiring directly (like using a licensed third-party agency for handling claims instead of building an internal claims team), and work with consultants that specialize in other MGA requirements, but you’ll still need to do a lot of the same things that we saw in the build section. The most important and challenging pieces, like the reinsurance and fronting carrier partnerships, can’t be bought. Total estimated cost: $5 million Total estimated time: 2 years Boost has already invested the time and money in building a robust MGA infrastructure to support our customers’ insurance programs, including:  When you work with us, you can leverage our already-existing infrastructure to get what you need to support your insurance programs right away, for an annual platform fee.  Total estimated cost: $150,000 annually Total estimated time: Immediately available The core of a new insurance program is the product itself: the coverages you’re going to offer, the risk capital to back them up, and the administration to support its operations. In this section, we’ll look at what it takes to create a brand new insurance product from scratch. If you choose to build your product from scratch in-house, you’ll need to hire experienced people to do everything mentioned above, including: Additionally, you’ll need to secure capacity for your product. This is often harder than it sounds, especially if you don’t already have relationships in place with risk capital providers. Particularly in the current economic environment, convincing reinsurers to commit financial resources to insuring a new, unproven risk can be a long, difficult journey.  Total estimated cost: $8 million to set up, with $2 million annually to maintain Total estimated time: 5-6 years If you go the “buy” route for developing your new product, you’ll need to contract out to a number of partners to get what you need, including: Each partner will deliver their piece of the puzzle, but it will be up to you to assemble the pieces and ensure everything happens as it’s supposed to. You’ll need to invest resources in project-managing a complex multi-year, multi-partner project. Additionally, some partners’ contracts may include ongoing fees, or a certain percentage of the product’s GWP. Total estimated cost: $5.8 million + 1% of GWP Total estimated time: 3-4 years If you choose to partner with Boost to create your product, you’ve already streamlined the process considerably. Boost can provide everything you need to build and launch your new insurance program under one roof (in fact, we’re currently the only partner that can).  Boost’s in-house team of insurance experts will work with you on market research and scoping for your opportunity, then develop a product sketch for how to address it. Once you and Boost have agreed on what the new product should look like, our team will get to work developing the forms, guidelines, and other program documentation. They’ll also help you design the program’s operations and claims workflows. When the product is ready, Boost will submit it to our panel of reinsurance and fronting carrier partners. Once we’ve secured paper and capacity for your product, our compliance specialists will start the filing process with the states that you intend to sell in. Total estimated cost: $400K Total estimated time: 4-7 months Modern buyers expect convenient, all-digital purchase experiences, and delivering those experiences requires a policy administration system (PAS) with the right capabilities. In this section, we’ll look at options for acquiring a PAS that can support end-to-end digital workflows. A PAS is a very complex piece of software, in no small part because of varying insurance regulations between each state. To function smoothly, your PAS will need to automatically identify and follow all applicable laws for the state a policy is sold in. This includes areas such as:  The time and difficulty of building a PAS also increases with each additional insurance line that it must support. If you build in-house, you’ll also need to plan for regular updates and maintenance to the software, and ensure your organization has the necessary resourcing in place. Total estimated cost: $2 million annually Total estimated time: 1-2 years If you opt to buy the technology you need, the cost will vary by PAS vendor pricing, and also by the amount of development work necessary to customize an off-the-shelf PAS to support your product and workflow needs. Traditional vendors often charge per-year service costs for your PAS buildout and subsequent maintenance. Newer vendors tend to forgo the large fixed annual rates, and instead collect a relatively low baseline platform fee along with a percentage of your gross written premium. In many cases, however, you’ll also need to separately arrange and pay for the custom dev work to configure your PAS for your products. Total estimated cost: $250k + 1% of GWP Total estimated time: 6 months to customize/implement Boost’s state-of-the-art PAS is at the heart of our platform, and is pre-configured to support all Boost products. The annual $150,000 Boost platform fee includes access to the PAS - just integrate with your front-end via API, and you’re ready to get started selling your Boost-powered insurance product.  The Boost API was built from the ground up to be easy for developers to build to and implement, reducing deployment times vs. complex legacy software. This includes a design that leverages RESTful patterns, comprehensive API documentation, and permanent access to a dedicated testing environment, at no additional fee. Total estimated cost: Included in the platform fee Total estimated time: 4 weeks deployment Considering if a new insurance program is the right move for your business? Learn everything you need to know with our free ebook How To Succeed with a New Insurance Program. And if you’re ready to get started with Boost, get in touch today.
Continue Reading
A stylized concept image  that shows a person working on a laptop, with various security and internet iconography superimposed over it.
3 Reasons Cybersecurity Firms Should Offer Cyber Insurance
May 19, 2023
Cyber threats are on the rise, and businesses of all sizes and industries are at risk of significant financial losses and reputational damage in the event of a cyber attack. While SMBs are regularly targeted by cyber criminals, however, it can be difficult for them to secure cyber insurance coverage that meets their needs.  For cybersecurity firms that serve SMBs, this is a great opportunity to expand your business by offering cyber insurance. In this blog post, we break down 3 compelling reasons why cybersecurity firms should offer cyber insurance to their clients. Cybercrime is rising across the board. In 2021 the FBI's Internet Crime Complaint Center received 845,000+ complaints, with total losses that exceeded $6.9 billion. 2022 had the second-highest number of data compromises in the U.S. in a single year, and the total cost of cybercrime is predicted to hit $8 trillion by the end of 2023 (then grow to $10.5 trillion by 2025) As frequency has grown, so has the cost to individual businesses. The average cost of a data breach for businesses in the United States reached a staggering $9.44 million in 2022. These kinds of unexpected costs would be taxing for even a large, highly profitable enterprise, but they can be devastating for small to medium businesses. Some never recover.  Your customers need a way to safeguard their operations from the harmful consequences of a cyber incident, and cyber insurance can help.   Cyber insurance protects individuals and businesses from digital risks such as data breaches,  phishing attacks, and other types of cybercrime. It usually provides financial coverage for expenses related to recovering from a cyber attack, such as legal fees, data recovery, customer notifications, and reputation management. It offers a safety net that allows your customers to mitigate the financial burden and operational disruptions caused by cyber incidents and provide some relief while they recover and rebuild.  With the increasing frequency and complexity of cyber threats, cyber insurance has become an essential component of any comprehensive risk management strategy for all businesses. This creates an opportunity for you to offer your customers a solution.  With approximately 33 million SMBs in the United States alone, this segment represents a significant portion of the business landscape. The insurance industry as a whole is also quite substantial, with P&C premiums totaling over $710 billion in 2021. Providing comprehensive cyber insurance lets you tap into this market, and creates the opportunity to generate significant revenue streams while filling a critical gap and meeting SMBs’ legitimate needs for cyber insurance protection.  Cybersecurity firms are already at an advantage in the market. Because cyber insurance is so aligned with your core business, you’ll be selling to your existing customers. Younger buyers in particular have reported that they prefer to buy financial products like insurance from brands they already know and trust, rather than a traditional provider. Since you already have a relationship with your customers around protecting them from cyber threats, buying their cyber insurance from you is a natural choice.  Expanding your business and adding new products can be a significant (and expensive) undertaking. But an important aspect to remember with cyber insurance is that you won’t be marketing to new customers. Instead, you would be selling to the same audience with whom you’ve already invested time, effort, and money. Not only does this streamline your sales and marketing processes, but it also allows you to generate additional revenue without incurring new customer acquisition costs. By weaving cyber insurance into your current marketing efforts, you can seamlessly expand your service offerings and build additional revenue per client.  Providing insurance to your existing clients can also help boost your customer retention. Insurance is a very “sticky” product with an average 84% customer retention rate. The additional touchpoints can help keep your brand top of mind, and the valuable protection your customers buy from you is another differentiation point against the competition.   By strategically integrating insurance into your product lineup, you can boost your revenue, strengthen customer loyalty, and further position yourself as a trusted partner for all their cybersecurity needs.  If you offer cybersecurity services to small to medium businesses and want to learn more about how you can grow your revenue by offering cyber insurance, learn more in our free ebook
Continue Reading
Conceptual image with a graphic of a barchart rising up from the surface of a tablet. The tablet is held by a man in the background.
Boost in Q1 2024: $130M in New Capacity with 12+ Reinsurance Partners
Feb 8, 2024
Risk capital is one of the most critical components of an insurance program: a program can’t operate without sufficient capital to respond to its policyholders’ potential losses, and it can’t grow unless its capacity does too.  At the same time, risk capital is also frequently one of the most difficult components to obtain, especially for products aimed at new or emerging risks. Insurance and reinsurance providers can be understandably hesitant to commit their resources to unproven programs, or to expand in areas they feel are high-risk. In the current macroeconomic environment, with investors increasingly prioritizing profits over growth, the already-difficult risk capital market has grown even tighter. That’s why we’re excited to share an important milestone here at Boost: at a time when the risk capital market as a whole is contracting or staying stagnant, we’ve just added over $130M in new reinsurance capacity, and expanded our reinsurance panel to over a dozen partners. This is great news not just for Boost, but for all of the insurtechs, MGAs, brokers, and embedded insurance platforms that work with us. We’ll be able to expand the capacity behind all of the programs we support, including SMB commercial cyber, startup management liability, parental leave, pet health insurance, and more. This in turns means our partners can scale even further with the programs they white-label from Boost. It’s not just our current programs that can grow. One of our specialties here at Boost is developing innovative new programs to address emerging market risks, which requires new risk capital. Some of our additional capacity is earmarked for new program launches throughout 2024. While we can’t talk about our plans yet, we’re very excited for what’s coming down the pipeline later this year. This expansion is also a big vote of confidence in Boost by our reinsurer partners. If you read our press release, you know that one of our partners said that they expanded their relationship with us because of our consistent track record of program profitability, with a data-driven and technology-enabled approach to risk management. We’ve worked hard to deliver great results for our capital partners, our customers, and their customers, the policyholders. We look forward to doing even more in the year to come. If you’re looking to expand your insurance offerings, or develop an innovative insurance program for emerging risks, Boost can help you get started today.
Continue Reading