JustInCase gets approval from regulator for P2P insurance, raises $1.4M pre-series A

Image credit: JustInCase

See the original story in Japanese.

Tokyo-based insuretech startup JustInCase has been officially registered as a small-amount / short-term insurer by the Tokyo Finance Bureau. In response to this, the company will officially launch an insurance business and new mobile app called JustInCase on the app store as of July 1st. Unlike an old app they were offering on a testing basis, the new app will start by offering an insurance service to cover repair costs in the event of a malfunction for smartphone users but add new service features later on.

In conjunction with the launch announcement, the company revealed that it had raised 150 million yen (about $1.4 million US) in a pre-series A round from 500 Startups Japan, Globis Capital Partners, Line Ventures and others. They have raised a total of 195 million yen (about $1.8 million) to date including the funds in a seed round.

The new app will score users on a daily basis about how they carefully use their smartphone so that premium rebate will be given to them at renewal of insurance according to the safety score measured in the last three months. If one has no claim which has been filed during the latest insurance period or has a high score indicating a lower risk, one gets a 30% discount on average for payment.

A Screenshot of the new app.
Image credit: JustInCase

JustInCase tried to deal with P2P (peer-to-peer) insurance though the fact of the matter is that they virtually adopted it due to regulatory limitations.

Generally speaking, P2P applies the concept of a sharing economy to insurance, i.e. friends and groups of users (pools) who are interested in insurance against the same risk pay the insurance premiums, and a system is adopted whereby insurance money is paid out from this pool. P2P insurance has various merits including the risk being easier to calculate compared with conventional insurance, insurance products that were impossible in the past can be easily developed, insurance money fraud and moral hazard problems are less likely to occur, and ex-post facto premiums can be kept cheap (through cashback, etc.).

Meanwhile, JustInCase took a while to get approval from the regulator because it was the first attempt to launch a (virtual) P2P insurance in Japan where users can complete all application steps in the app and require no interaction with any insurance representative. The company says that it actually needed 467 days to complete the registration as an insurer on June 25th while its application process started back in March of 2017.

In this space, we’ve seen emerging P2P insurance startups such as Sure (having raised $10.6M US so far), Lemonade (recently raised $120M US from Softbank, GV or Google Ventures, Sequoia Capital and Allianz last year-end) or Berlin-based Friendsurance (raised more than $15M US from Horizon Ventures, the investment firm of Hong Kong billionaire Li Ka-Shing).

Edited by “Tex” Pomeroy