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Giant incumbent insurer Allianz has invested $96 million in BIMA, a Stockholm- and London-based microinsurer that serves consumers in emerging markets. Microinsurers typically target low-income customers, often in emerging economies.

The investment was made through Allianz's digital-focused investment arm, Allianz X, and saw the insurer buy major investor Leapfrog's stake in the startup. BIMA is now valued at $300 million, and will use the money to grow its product suite and expand into more countries.

The startup's expertise will allow Allianz to tap into new demographics. Incumbent insurers historically haven't had the technology to make it worth their while to serve low-income individuals, as manual underwriting is a resource-intensive process and puts restrictions on the prices they can charge for policies. However, Swiss Re estimates that such underserved markets present an opportunity worth circa $40 billion globally for those that can get around this hurdle. BIMA will help Allianz tap into these demographics by reducing underwriting costs.

BIMA offers life, health, and accident insurance for as little as $0.60 per month to poor consumers in emerging markets. The startup's proprietary technology allows it to automate the underwriting process, enabling it to sell policies at lower prices than incumbents. The policies are renewed on a monthly basis, and payment is collected via mobile phone, as mobile penetration is broader than internet penetration in most emerging markets. BIMA already operates in 14 countries, and has 24 million customers. BIMA's expertise will boost the insurer's own push into emerging markets, Allianz said.

It's likely we will see more tie-ups between incumbents and insurtechs going forward.As insurtechs continue to develop better technology to efficiently cater to low-income customers with specific needs, partnering with them will increasingly promise to reduce the difficulty of serving emerging markets for incumbents. As such, given the size of the opportunity in these underserved geographies, we will likely see more pacts between major insurers and emerging markets-focused insurtechs, especially now that a player as big as Allianz is entering these areas and drumming up competition.

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Looks at the world's biggest and most innovative life insurance markets, and trends they're setting for the space.

Explains the major inefficiencies embedded in the life insurance status quo, and the problems they're causing providers and consumers.

Outlines the two main strategies life insurtechs are adopting to drive change in this market, for the benefit of buyers and sellers of life insurance.

Discusses the best practices life insurance incumbents and startups should adopt to steer clear of the risks still attached to applying emerging technologies to such a tightly regulated product.

Gives an overview of what the rise of life insurtechs has in store for the life insurance space going forward.

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