Life & Health Insurance is critical to our lives. Here is why.


I’ve always been a Life guy when it comes to Insurance.  While there is a lot of interesting stuff on the Property and Casualty space (P&C), there is always interest (and a special place in my heart) for Life. It’s where I started and grew up in this industry and where I plan to focus for years to come.

A few weeks ago, I was speaking with my friend Andrew Johnston, (Global head of InsurTech Research for Willis Re).  He informed me that the Q2 2018 Quarterly Briefing (which is put together by Willis Re and Willis Towers Watson Securities, with data and graphs from CB Insights) would be focused on Life and Health. This got me very excited and I asked if I could review the report earlier this week before it was publicly released (under embargo of course), so I could be the first one to write about it.

Of the many research publications on Insurtech (not the daily/weekly ones I previously shared), the Insurtech Quarterly Briefing is one that I look forward to the most.

I look forward to it because it is a great combination of 1) numbers/investments 2) thought leadership, and 3) quality company profiles (aka – if a company is in this report, I know they are a quality company).  

This week, I summarize some key findings from the report along the lines of these three areas.  I do encourage you to read the full report here.  I’ve also included a link to all the previous Quarterly Briefings at the end of this article for reference.

Q2 Investment in Insurtech

Funding throughout the quarters

Investments by country

The quantitative analysis can be found toward the end of the report.  Some highlights from these numbers can be found below (taken from the report):

  • There were 71 InsurTech deals with a total value of $579 million
  • The deal count was 8% higher than in Q1 2018, with total funding amount down 20%
    • While deal volume is up from Q1, total funding is down 20% due to a lack of high-dollar transactions, like the seven $30+ million transactions we saw in Q1 (vs. the two $30+ million transactions in Q2 2018)
  • 71 transactions in Q2 2018 represents the highest transaction volume of any quarter to date
  • For Life and Health (L&H), the 27 transactions announced in the quarter were the highest amount since Q2 of 2017 and the second highest on record
  • 43% percent of P&C and 56% of L&H transactions in Q2 2018 involved B2B companies, compared with 35% and 47%, respectively, of all transactions since 2013
  • With a total of 34 investments, Q2 2018 set a new record for the volume of technology investments by (re)insurers and represents an increase of 26% and 6% from Q1 2018 and Q2 2017, respectively
  • Investment from international markets remains strong; transactions outside of the U.S. account for 58% of total transactions since 2013 and 62% in the quarter
  • There were 22 strategic partnerships between (re) insurers and technology companies in the quarter, which equaled the same amount seen in Q1 2018

Further, as noted in Willis Towers Watson Securities’ CEO, Rafal Walkiewicz’s forward, ‘Life & Health InsurTech has attracted more than $5 billion in funding over the last five years, 20% more than P&C over the same time period’.  Further, L&H ‘funding rounds leading to an average funding round size that is 45% larger than the average for P&C.’

What can be derived from these stats?

Firstly, seeing more investment in Insurtech outside of the U.S. should come as no surprise, especially from countries like China, India and the UK.  China has actually leapfrogged a few other countries to go second after the US last quarter – perhaps a sign of things to come?

Secondly, a record number of investments from (re)insurers should also come as no surprise.  After all, just take a look at the number that have VC arms now.

Lastly, I was pleasantly surprised to see that there has been more investment into L&H vs. P&C since 2013.

At the many conferences and events I have attended, as well as the daily articles I read, there seems to be a slightly higher focus on what’s happening in the P&C space vs. the L&H.  I’ve even had some people from the P&C side tell me they think the L&H side is boring as compared to P&C.  

I would agree there are more products in P&C to enhance and innovate  (travel, home, renters, auto, business, gig economy, etc etc).

However, with L&H, we have the opportunity to help people live longer and healthier lives.  

How boring can that be? (italics inserted in place for cynicism I can’t express through just writing…)

Data, Customer Centricity and Advisory Services

3 pillars

Regardless of the line of business of focus for Insurtech initiatives, how to harness new sources of data, build more customer centric products and provide services above and beyond just paying claims are on the agenda of all (re)insurers and entrepreneurs.  

For L&H, as Mr. Walkiewicz points out, ‘the complexity of change occurring within the Life & Health insurance value chain is much greater than in other insurance subsectors and the potentially positive impact on the quality of life for the consumer is much more profound.’  

All three of these pillars can help to enhance the L&H value chain to help individuals live longer and healthier lives.  


Use of Data

Data areas of interest

As with other lines of business, there is a lot of data already existent within the L&H processes and more and more data becoming available.

The need and amount for medical information in order to provide preventative advice as well as to pay claims is very high and very messy.  How can this information be shared between doctors and patients to provide better care? How can this information be shared between hospitals and (re)insurers to pay faster claims?

There are new data sets being brought to the foray from use of wearables and genomic reports.  How will this data be used for underwriting (taking into account legal and ethical considerations)?  How will this data be used to provide better advice and engagement to customers?

And how will all of this data be incorporated into existing (legacy) systems, processes and analytics that the company undergoes?

dacadoo is one company helping with this, by creating a Health Score, similar to a Financial Credit Score.  Their solution helps with engagement of customers by providing personalized feedback on their lifestyle.  The Health Score also provides Insurers with a different data set to help them with underwriting and ongoing monitoring of premium rates based on the individual’s health choices.  

Atidot is a company helping on the data and predictive analytics side.  They are one of the only providers I have seen specifically focused on Life products.  Their solution targets three groups of individuals – CFOs and Actuaries, Sales/Distribution teams and Retention/Customer Care teams.  They help all of these teams with providing better insights on their in-force book of business as well as information to reach out to their policyholders (in the case of a cross-sell/up-sell or potential lapsation).  For full disclosure, Atidot has been a client of mine this year.

Customer Centric Products

products area of interest

For all Insurance products, the way in which consumers determine their needs (especially when purchasing digitally) can definitely be improved.  Further, the products that they buy can be more flexible in nature.

In P&C, we have seen UBI products, especially for Auto, which offer policyholders the opportunity to pay for the exact amount of miles that they drive.  The use of telematics will also help in providing policyholders discounts for driving better (and potentially premium hikes for driving poorly!).

For L&H, these types of products (UBI based) are a bit more difficult to imagine.  However, using the advanced data and analytics as described above can help with providing policyholders and Insurers with more information as individuals progress through their lives.  

As such, the process for determining the amount of coverage an individual needs at the purchase of their policy as well as throughout the term of their policy are of utmost importance.  Further, products should be built in such a way that are more flexible for policyholders and less onerous if they have a change in needs (i.e. limited additional invasive underwriting).

Anorak is a fully automated, fully digital Life insurance advisory platform looking to tackle the meaningful protection gap of nearly 8.5 million individuals in the UK who are currently uncovered or under-covered by Life insurance.  The process starts with a ‘check-up’, which is like a needs analysis for the individual on their current situation.  Once this is done, ‘impartial advice’ is provided on what type of cover the individual may need. Then, three policy options are provided to the individual.  Their product offers an API which can be integrated into price comparison sites, agencies, online retailers and more.

As a person that likes to focus on the needs of and suitability of products being recommended to an individual, I love what Anorak is offering.  

Ladder Life is a digital MGA that offers online Term Life Insurance.  Their tagline of ‘Life Insurance Just Got Easier’ can be seen through their quote and application process:

  • Consumer answers a brief set of questions (many responses are avoided through supplemental data).
  • Consumer receives an instant insurance quote with no obligation to purchase.
  • If supplemental information is needed, Ladder sends a medical professional to complete an exam (free of charge to the customer).

In most cases, the need for blood and urine samples for underwriting has been eliminated.  

Further, they offer a solution to allow policyholders to adjust their coverage as needs change (called ‘laddering’), without paperwork, meetings, phone calls, cancellation or penalty fees.

For those of you who have ever sold or bought Life Insurance, I hope you would agree that the process and flexibility outlined above are better than some of the ‘traditional’ methods.

Lastly, they have just launched the Ladder API and a partnership with Sofi, helping to provide a more extensive offering to the individuals in Sofi’s ecosystem.

Regard has designed products to address coverage gaps and rising out-of-pocket expenses that many customers in the U.S. face as more employers shift to high deductible Health plans.

This is a huge and increasingly larger problem for the U.S. health market.  

According to the report, Regard differs from many other InsurTech agencies in three important ways: (1) emphasis on institutional distribution needs as the starting point for product and technology vs. a direct to consumer strategy; (2) its position at the nexus of new specialty insurance products and proprietary technology vs. traditional products with off the shelf IT; (3) its ability to participate in premium income through risk retention in addition to MGA commissions compared to a commission-only revenue model.

Digital Advisory Services

advisory services area of interest

Insurance is in an age where we are transforming from a collector of premiums and payor of claims, to a service provider that helps individuals manage and prevent risk in their day-to-day lives.  

The solutions that are becoming available in the L&H space are helping with this to enable policyholders to connect with their doctors and hospitals as well as have 24/7 services through the use of AI and machine learning.  This will help to make L&H products more interactive for their policyholders with an ultimate aim of living longer and healthier lives.

Boundlss provides a AI-powered health assistant for L&H insurers.  Their platform helps to support individuals with their wellness goals and acts as a ‘personal trainer/health coach’ for users.  

The Boundlss platform collects, analyzes and aggregates data from over 400 wearables and mobile apps, allowing insurers to gain new insights into their member populations and their behaviors.

Further, if the AI engine does not provide a response that is sufficient for the individual, a human coach can be brought seamlessly into the conversation.  

Oscar is a fully licensed Health Insurer operating in New York, New Jersey, California, Texas, Ohio and Tennessee.  I’ve covered Oscar before when writing about my own Health Insurance purchase and I believe they are a company to watch for the years to come.  With their recent rise from Alphabet, you can ensure that building a digital ecosystem will continue to be at the forefront for this company.  I liken the ecosystem they are building to that of Ping An and believe they have begun to build a company that is focused equally on advisory services as it is on delivering a quality product.    

‘The Insurtech Grand Prix’

It would be remiss of me if I did not mention the thought leadership piece in the Briefing by Greg Solomon, Head of Life & Health Reinsurance at Willis Re International.  Greg is based in Hong Kong.   

In this, he uses the analogy of the Grand Prix to identify initiatives that are:

  • ‘In the Driver’s Seat’ – Insurers taking a lead in initiatives to better distribute and interact with their policyholders with examples coming out of South Africa and Asia.
  • ‘Rear-wheel drive’ – developments outside of the L&H sector that are changing the dynamic of how products are distributed and built for customers.  Examples here include the joint healthcare venture with JPMorgan & Chase, Berkshire and Amazon, online search and aggregator sites
  • ‘Emerging Tech: Towing Them Along’ – different technologies such as Machine Learning, AI, Blockchain, cryptocurrency and genetic testing, that could change/enhance many elements of the L&H value chain.  
  • ‘Along for the ride’ – tools like wellness platforms that help Insurers be alongside of their policyholders throughout the life of their policy.  


From this summary, I hope for two things:

  1. That you are inclined to read the whole report!  You can find the link here. There is a lot more information in there, especially deep-dives on the companies mentioned including interviews from their management team.
  2. That I was able to change some of the P&C folks’ opinions of L&H from boring to at least interesting!

I am pleased to see the amount of investment and transformation in the L&H space.  As with all other lines, it is long overdue.

The opportunity for our industry to be part of helping individuals live longer and healthier lives is extremely exciting for me (and should be for you, too).   

Previous Quarterly Briefings

Q1 2017

Q2 2017

Q3 2017

Q4 2017

Q1 2018

Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

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UK set to land a Funding Circle sized Unicorn

Back in October 2015, Bernard covered what was then a fledgling UK fintech startup in a promising space – Funding Circle. He spotted the company’s potential, and noted it could also be the future ‘unicorn’ the UK needed to back up its ambition to be the centre of the fintech universe.

“So it looks like Funding Circle could be one of those big winners that London needs in order to earn its coveted Fintech Capital of the World status. Lots of exciting new ventures is not enough. London needs a couple that scale to be global winners” 

He also speculated on Funding Circle’s IPO. An IPO that has just been announced in the past few days.

The question for Funding Circle is, when they get to that stage, do they IPO in America or the UK? In the days when Israeli ventures pioneered the “American flip” (switch to look like an American company) there was no choice – you did your IPO in America.

Luckily for Bernard and his fellow UK fintech followers, Funding Circle looks set to make good on its UK origins, indicating it intends to float on the London Stock Exchange, in a formal announcement, prior to the release of the prospectus.

The company is reported to be aiming for a valuation north of £2 billion.

So what’s to like?

  • The business has originated more than £5 billion in loans to over 50,000 SMEs, across the UK, US, Germany and the Netherlands.
  • In doing so, it claims it has helped create more than 75,000 jobs
  • 32% of lending (ex property loans) is to repeat purchasers, which must dramatically lower customer acquisition costs across the board. In H1 2018, more than 40% of revenue came from existing customers.

And what’s the risk?

  • While revenue grew to £63.0 million in H1 2018, from £40.9 million in H1 2017, the company is yet to turn a profit. Investors will be asked to buy into the growth over profitability story for the foreseeable future.Revenue is growing as fast as operating costs are growing, when you compare H1 2017 with H1 2018. Expansion is an expensive game, although the company must have a relatively solid playbook for it now, having already completed a few sojourns.
  • Focus will be another question mark. The announcement claims the business has only tapped into an estimated 1.9% of the addressable market in the UK. Use of funds is partly slated for opportunities in new geographies.

Either way you slice Funding Circle, there is no question what they have achieved to date is phenomenal. We will be watching this one with significant interest going forward!

Daily Fintech Advisers provides strategic consulting to organizations with business and investment interests in Fintech. Jessica Ellerm is a thought leader specializing in Small Business and the Gig Economy and is the CEO and Co-Founder of Zuper, a new superannuation startup in Australia.

A Thinktank Fintech initiative out of Greece

“Necessity is the mother of invention” is an English proverb that is not at all outdated. Small countries are developing regulatory frameworks to embrace and take advantage of the so-called “future technologies” because it will enable them to play vital roles in the 4th and 5th industrial revolution. As tech accelerates, it is expected that one generation may actually live through two major revolutions.

Smaller countries, policy-making organizations and think tanks are actively building the next layer to welcome the socio-economic changes that are inevitable.

A Greek think tank, To Diktio, was founded in 2013 with a European focus. To Diktio (the network in the Greek) is a member of the Foundation of Progressive Studies based in Brussels and focused on proposing reforms in Greece and Europe. I would like to thank the President of To Diktio, Anna Diamantopoulou[1] for reaching out to me. We can only grow through collaboration – see partnerships of ToDiktio, here.

To Diktio hosted yesterday a Fintech focused event for its members during which a very thorough Fintech report was presented by Dr. Kourouthanassis, of the Ionian University and Dr. Doukidis, of the University of Athens; and several policy reforms were suggested. I had the honor and pleasure to review the report (in Greek) and also participate virtually in the event to share some of my insights on Fintech global trends and the first necessary steps for Greece to dive into the Fintech opportunity which is much broader than simply reforming banking services (see video here – in Greek only).

The 40-page report offered a thorough overview of Fintech subsectors and also of the policies that have enabled countries to become Fintech hubs.

Naturally, mentioning first the FCA as an early pioneer in the Fintech. Highlighting that the first European Union country that developed a regulatory framework for “specialized banks”, was Lithuania.

The UK and Japan, are the leaders in establishing frameworks to facilitate the Open Banking movement.

Regulatory sandboxes exist in the UK since 2016 and only this summer the Central Bank of Spain announced a Fintech sandbox to be launched.

In Europe, only the UK launched Project Innovate last year to facilitate the dialog between Fintechs and regulators to innovate in the interest of consumers. Only in Australia, there is a comparable setup of the Capital markets authorities who setup as early as 2015, an Innovation Hub program to encourage the cooperation of regulators and innovators.

Fintech pulse

Screen Shot 2018-09-17 at 9.15.36 AM


Based on the Greek Fintech report, already in 2018, the median size of M&A fintech deals in Europe has nearly tripled from last year.



Screen Shot 2018-09-17 at 9.15.42 AM

Challenger banks, a European specialty, are the ones that have absorbed large Fintech investments; Revolut, Atom Bank, and N26.



Revolut has already opened offices in Greece, this past Spring. The penetration in the Greek market is remarkable. By the end of 2017, Revolut had acquired 55,000 customers in Greece, making Greece the 4th largest country/client for Revolut after the UK, France, and Lithuania. Revolut is planning to triple the customer base in Greece.

The first homegrown Greek challenger bank is PraxiaBank. The two also homegrown e-money companies are Viva Wallet and Tora Wallet. Viva is already well established with 60k retails clients and 280k business clients and 30mil euros of transactions only for 2018.

As expected several payment Fintechs have presence and business in Greece. Payments are the most mature but thin margin Fintech subsector. From the 375+ payment businesses with EU passporting, ten have reps in Greece and 9 have licenses to operate in Greece. From the 170+ e-payment Fintechs with EU passporting, 3 have a presence in Greece.

The largest Greek telco, OTE, has a new subsidiary Cosmote payments with a plain vanilla topup card. But what is more interesting is to watch what OTE does with their dormant insurance license and their newly acquired full banking license.

Opportunity via Fintech

The low hanging Fintech opportunity in Greece lies in alternative funding for SMEs. Greece is one of the few EU countries that lacks a crowdfunding and P2P lending framework.

The Greek government needs to launch a Digital ID platform borrowing design elements and tech from Estonia and India. Combining this with a basic regulatory reform for alternative lending, would be a short and long-term strategic move. In a traumatized economy that is recovering from foreign investments in real estate, Digital identities and access to alternative funding would make magic.

[1] Anna Diamantopoulou, has served in the Greek parliament for 11yrs and as European Commissioner for Employment, Social Affairs and Equal Opportunities (1999-2004). She has served as Minister of Education, Lifelong Learning and Religious Affairs and as the Minister of Development, Competitiveness and Shipping. She active in several European think tanks.

Efi Pylarinou is a Fintech thought-leader, consultant and investor. 

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Blockchain Weekly Front Page: Regulations R Us


The Blockchain Weekly Front Page is a CXO level briefing. Our mission is to serve the mainstream business community by selecting one major theme in the Blockchain Economy each week and three news stories to illustrate that theme. This is all you need to know, each week, jargon free for CXO level business leaders and investors who will use this technology to change the world, in your email inbox each Monday at 7am CET. 

For more on the format please click here.

Last week our theme was Institutions moving into trading on Blockchain. A related theme is Regulation, which we cover this week.

Ten years ago on September 15th, the Lehman Brothers collapse rocked the entire world, triggering the financial crisis of 2008. It happened just 110 days before a new revolution was born: Bitcoin.

“The root problem with conventional currency, is all the trust that’s required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve.“ —Satoshi Nakamoto

Bitcoin was born in a time, when the trust we showed in banks failed. For many, including myself, trustless money holds answer:

“I’ve developed a new open source P2P e-cash system called Bitcoin. It’s completely decentralized, with no central server or trusted parties, because everything is based on crypto proof instead of trust.”

Could Bitcoin and blockchain have saved Lehman and averted the financial crisis? An accurate and immutable record of all of Lehman’s transactions on blockchain, in combination with smart contracts could of helped identify the abnormalities about the bank’s creditworthiness, alerting the right people ahead of time, so they could take necessary actions to prevent everything that followed.

Ten years later, while Bitcoin and the entire crypto ecosystem has reached a $195 billion dollar market cap, it has also reached a crossroads. It could achieve real-world adoption, but plenty needs to happen, most importantly, regulation and consumer protection.

In recent news two new stablecoins have been approved by regulators. The New York regulator approves Winklevoss, Paxos dollar-linked tokens. The first being the GUSD by Gemini, and the second PAX, Paxos Standard Token.

These two new coins work just like other fiat-backed stablecoins, They are pegged 1:1 with the US dollar. Before GUSD and PAX, there were a couple of others, Tether (USDT) and TrueUSD (TUSD).

But up to now, Tether has been plagued by controversy for its transparency. Many claim that Tether’s supply is not fully backed, by its dollar reserves. So, the emergence of fully audited, legal and licensed stable cryptocurrencies is big news, that will have a profound impact on the market.

Gemini Trust Company LLC, the issuer of GUSD, is registered in the US and is regulated by the New York State Department of Financial Services (NYDFS) and the US federal department. The company, promises to publish monthly capital verification reports issued by third-party accounting firms.

Regulated stablecoins are a new frontier of growth, because they tackle two major important issues:  trust and volatility.  The truth is that the USD isn’t going out of fashion, any time soon. The easier it is to send money around the world and to get into and out of crypto, the faster the crypto economy can grow.

In other news a US Judge Rules ICO Frauds Fall Under Securities Law. In Brooklyn, New York, District Judge Raymond Dearie affirmed securities laws could be pertinent in a case concerning two fraudulent ICOs. The defendant in the case supposedly misrepresented the amount of money the ICO as able to raise, claiming the company took in $2-4 million dollars, when the actual amount was closer to $300,000.

This is a landmark judgement, with far-reaching implications for the ICO market. The ruling creates a precedent that U.S. securities laws apply to ICO token sales.

The attitude toward ICOs is shifting around the world, and we’re seeing most countries take some kind of stance, ranging from official recognition to open defiance.

While we’ve been reading that the ICO Market Has Hit the Brakes, the reality is very different. Running an ICO is not longer a walk in the park, but investments in 2018 have been impressive. Collectively, ICOs in 2018 have already raised $11.7 billion, 10 times more than ICOs Q1-2 2017.

Initial coin offerings offer incredible opportunities and we can expect the market to continue to grow. But we can also expect consumer protection to be very high, in an effort to protect investors from bad actors and fraud.

Teams that plan ICOs should be very careful and make sure to be compliant with regulators. Even in absence of a well defined legal framework, they should take proactive steps, to avoid getting into hot water later on.

Last but not least for today, FBC Bitcoin Fund Now Eligible for Accredited Investor RRSP and TFSA Accounts.

First Block Capital announced FBC Bitcoin Trust, the first regulated Bitcoin fund that has achieved mutual fund status in Canada.

High-net-worth investors can now hold Bitcoin investments in their registered accounts, including registered retirement savings plans and tax-free savings accounts. The fund is available only to accredited investors and will offer the same easy and efficiency of trading as ETF funds. The trust is available on NEO Connect, under the ticker FBCBT. It has removed the 30-day redemption clause and has now enabled daily settlements.

The trust gives investors exposure to Bitcoin without having to acquire, hold, or manage the actual asset. The trust has been approved by the British Columbia Securities Commission (BCSC) and Ontario Securities Commission (OSC) and it marks the first and only product of its kind that is approved in Canada.

Currently, the FBCBT has approximately $20-million in assets under management, a significant drop from its peak of $40-million last year.

Despite the drastic decline in the price of Bitcoin, we can expect the price to go up. Currently around $6,500, BTC has settled down since price spike last December, that was mostly driven from speculation and the market getting ahead of itself.

Despite the overwhelming sense of a bear market, there is a lot going on everywhere around the world, which could trigger the next bull run in the coming months.

The Lightning Network continues to make advances and more channels open every day. The upgrade should allow Bitcoin to handle a far greater number of transactions and lower transactions fees. Then there is news like Bakkt which is set to launch this November. The platform, backed by ICE, Microsoft and Starbucks, will make exposure to BTC easier than ever before, for both retail and institutional investors.

Like anything else, trust and utility are two of the crucial factors that can drive the price of BTC. If people can trust Bitcoin and find ways of using it, you can count on the price to surge far beyond anything in the past.

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Ilias Louis Hatzis is the Founder & CEO at Mercato Blockchain Corporation AG. He writes the Blockchain Weekly Front Page each Monday.

An interview with OKCoin CEO after the incident in SH

Xu Mingxing

Since the afternoon of September 10th, a video clip of a conversation between Xu Mingxing, CEO of OK group and police officers in Shanghai has been circulating in China’s media platform.

Soon the news becoming Xu Mingxing was taken by the police to assist an investigation. Many individual investors came to the police station to file allegations against Xu Mingxing on swindle the second day.

Media reporters managed to reach out to Xu Mingxing on September 12th. During the interview, Xu explained what on earth has happened and the reasons behind.

Original interview can be read here.

Xu also said he does not suggest Chinese users to engage in digital assets trading and he does not think it’s a good idea for ordinary users who are not specialized in risk control and trading to participate in leveraged deals.


On the incident in Shanghai

Q: Several OKEx users whose crypto position was wiped out due to leveraged deals have filed allegations to Shanghai’s police office. According to the description of witnesses, those users have called police on you. What have you been through on that day?

A: No one called police on me. Some strangers knocked my door so I called the police and briefed them.

Q: Investors have filed allegations against you and your company for fraud and swindle. How do you want to respond to that?

A: It’s everyone’s civil right to call police when they are accused of fraud, theft, robbery or battery. Police will also ask you to make a brief.

So when someone called police on me in Shanghai, I went to the police station to make a brief and to prove that I did not commit frauds. I don’t think my behaviors constitute fraud. The one who called police on me has never made wire transfers to me or my companies, nor did he sign a contract with me. I have nothing to hide. I never committed frauds.

After I finished my brief, I left the police station.

Q: But the informant was a victim of the leveraged deals on OKEx. He believes that OKEx is your company.

A: I’m not legal representative of OKEx, nor its shareholder, board member. OKEx is a Malta company.


On the leveraged deals

Q: What’s your opinion on the leverage tools provided in digital asset exchanges?

A: Leverage deal is invented by mathematicians and financial workers. It is designed for arbitrage and hedge deals. Leverage is a neutral tool. But there is a lot to learn in its application. It’s harder to handle and requires much more professional knowledge on risk management.

One major risk regular investor will meet in leverage deal is out of position. They need to have enough margin to run leverage deals. When their account can’t meet the requirement of margin call, they will be out of position.

Leverage is a tool to optimize user’s trading strategy.

Q: If leverage deal requires professional knowledge, should exchanges set a few restrictions to keep it away from regular users?

A: Leverage deal is not suitable for regular users. When your deals are leveraged, the rate of profit/loss is amplified. I do not suggest Chinese users to engage in digital assets trading and I do not think it’s a good idea for ordinary users who are not specialized in risk control and trading to participate in leveraged deals


On digital asset exchanges

Q: What’s your opinion on digital asset exchanges?

A: Digital asset exchange is under different regulation in different districts. In China, all the crypto-related business is forbidden. And exchanges in China have all been shut down last year.

In US, you need to acquire licenses from FinCEN and MTL to run a crypto exchange platform. If the tokens on your platform are considered as security, you will also be regulated by SEC.

Anyway, digital asset exchange is clearly prohibited in China.

Q: As far as I know, Chinese exchanges like OKEx, Huobi, Binance are still serving Chinese users.

A: As far as I know, most of the users are non-Chinese users in those platforms. Some Chinese users might be using VPN to access to them.


On Xu Mingxing himself

Q: OKcoin has set an office in Shanghai, what do you come to Shanghai for?

A: We have acquired an instrument examination company in Shanghai in 2016. The office belongs to that company.

We are working on blockchain technology and have set up OK Blockchain engineering lab. We want to explore blockchain in a higher level. That’s what I’m doing now.

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Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.

Get fresh daily insights from an amazing team of Fintech thought leaders around the world. Ride the Fintech wave by reading us daily in your email.


On the anniversary of the Lehman collapse, Satoshi Nakomoto is finally revealed


On this historic day, the story was finally revealed, on an obscure Fintech discussion forum.

Was that a good clickbait headline?

The Satoshi Nakomoto story starts in 2002, after the Dot Com crash, when Elon Musk created SpaceX. Believing that mankind was doomed unless we could populate Mars he took some of his winnings from PayPal to create the rockets to get us to Mars.

That part of the story is well known. What was revealed today is the part of the story that has so far remained secret. Musk also took an idea that was being hatched in the early days of PayPal, to create a digital currency that was Internet native, and brought it to life.

PayPal had discarded the idea, even though the founders were super excited by it, because the team had opted for the more pragmatic strategy of working within the existing bank payment rails.

This is where the story gets weird. 

When Musk dusted off the early plans for a cryptocurrency and exposed them to some serious cryptographers, they found some showstopper issues.

Musk is not a man who gives up easily. He also knew two things. The first is you cannot rush great software. The second is that timing is everything.

So he did a deal with the cryptographers – who agreed on condition of anonymity forever. The deal was that they would get first class tickets to Mars in return for creating a “purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”. They could take as long as they needed and were instructed to release it when they could see an event back on earth that shook human’s faith in the existing financial system.

It took them 100 years. They finished it in 2102, in the MuskVille colony on Mars. Fortunately some colleagues on Mars had perfected digital time travel. So they programmed their AI machine to release the code just after the Lehman Brothers collapse. In the news release today, they also uploaded what looks like a documentary. It is the history of mankind on Earth after 2008 WITHOUT Bitcoin. It is tough to watch. 

So now we know! Satoshi Nakomoto is an AI program from the future sent back to help mankind during dark times, created by a new breed of Humano-Martians.

For more in our science fiction series please see:

If you want a more serious look at the next ten years of the global financial system, please come to the event called  Finance Disrupted 2018 (the next ten years) in New York, on 2nd October 2018. This conference is managed by the Economist and as I have been a subscriber to that publication for decades I am excited to attend. They have assembled speakers who really understand the intersection of tech and finance as it relates to major disruptions such as the Global Financial Crisis and what may happen in the next ten years. There is a 15% discount for Daily Fintech readers. Here is the link to learn more about the event. To get the 15% discount for Daily Fintech readers please quote: dailyfintech15

While there are still a few tickets to this conference, I am told that the first flight to Mars is fully sold out and non-millionaires need not apply.

Bernard Lunn is the CEO of Daily Fintech and author of The Blockchain Economy. He provides advisory services to companies involved with Fintech (reach out to julia at daily fintech dot com to discuss his services).

A true story: Techfins (Amazin) beat Fintechs and Banks on SME lending

No – the title doesn’t have a typo. It actually started as a typo, but I chose to keep it that way. Google SEO will learn.


They are really Amazing Amazon for the work they do in the SME lending space (not for just that). This is a real life story, where I was involved with an SME and witnessed first hand how hard they had to struggle before they got funded by Amazon.

The SME is Ausha foods, I know them personally as they are run by a friend. After a few months of ideation and planning in 2016, they launched in 2017. They sell organic food products in the UK, based out of London. Their supply comes from Kerala (mostly) in South India.

They made sure they went for all the top certifications and are very quality focused across their supply chain. Now, this is not to provide free marketing for them, but just to set the ground for the firm under discussion.

Ausha listed themselves on Amazon as seller, and for a year have seen some serious sales happen through the platform. They have sold 18 products on Amazon over the past 12 months. After hitting good revenues there, and with 4.8 stars on Amazon reviews, they decided to expand. They wanted to ship larger volumes of their products, and needed some financing options. And like any typical funding request, they wanted the monies in 2 weeks.

For an SME who haven’t done fund raising for expansion before, it can be quite daunting. They reached out to me, and I gave them a few tips, and suggested to go for debt rather than equity as their need was small, and my ecosystem of equity investors were largely tech focused.

I put them in touch with a Fintech I knew, who were good at connecting SMEs to lenders. They got two lenders who were interested in talking to them. But both lenders wanted them to fill in tonnes of paper work, and gave a minimum time line of 6 weeks to even get to the approval stage. The result could also be a reject.

The founding team didn’t give up, and reached out to Amazon for financing their expansion. Amazon already had all the details about their products (about 18 products listed on the platform), the sale they make and the reviews they have from customers. They knew that the business was scalable, and gave them the approval for the funding request on the same day of applying. Ausha got the money in their bank account in 2 working days.

I met the founding team at a party, and I was surprised when they told me what had happened, and felt compelled to write this story.

Its critical that SMEs felt well supported by the financial services ecosystem they operated in. The founders of Ausha were well educated engineers who knew the right doors to knock on – but most SMEs don’t.

Its critical that SMEs atleast have the information on who to reach out to when they need funding. Despite the efforts of the British Business Bank, I believe, there is still a lot of work to be done in the UK to bring awareness in this space. It is also critical for these lenders to tap into data available on social media and other platforms where a borrower trades.

In an open banking day and age, they can proactively reach out to these firms when they see anomalies in their transactions, and find out if they needed any funding help. How hard can that be?

Techfins like Amazon and Alibaba have an information advantage over the Banks, and even Fintechs. These giants have transaction level information on the SMEs trading on their platform and get to see demand for their products. And when an SME fully relies on, say Amazon, it is an Amazon family SME. By funding the SME, Amazon are really funding their own growth in the e-commerce space and in the Financial Services space.

Amazon rules. Go Ausha.

Arunkumar Krishnakumar is a VC investor focusing on Impact investments, a writer and a speaker.

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Clearcover’s Expanded API and the power of incidental Insurance


Prediction #2 from my 2018 Insurtech predictions focused on 2 buzzwords that I thought would be quite prevalent this year; API and Ecosystems.

For APIs, this centered around a couple key premises:

  1. APIs help to enable digital ecosystems/platforms to distribute Insurance products with more ease and,
  2. Insurance carriers with API-enabled police admin systems/infrastructure will be able to be more nimble in their ongoing operations.

There are quite a number of companies within the Insurance industry now offering APIs across the Insurance value chain.  There have also been a number of new API announcements over the past couple of months.

This week, Clearcover, an Insurance MGA headquartered in Chicago and currently selling auto policies in California launched an expanded API offering for its product.  

I had the chance to catch up with Clearcover’s CEO and Co-Founder Kyle Nakatsuji to learn more about his background, how Clearcover compares to other incumbent and startup Car Insurance companies as well as what their expanded API offering is all about.  

Kyle’s background and why he started Clearcover


Kyle started his career as a startup attorney.  In 2013, he left to co-found American Family Ventures (the VC arm of American Family Insurance) along with Dan Reed.  

‘I spent four years there investing in all sorts of really cool insurtech startups.  At the beginning, we were mostly investing in software companies that sold to the Insurance industry.  Towards the end of 2014 and early 2015, Insurtech started gaining momentum and people started getting interested in the category.  We started to see all sorts of really interesting startups that were no longer just doing things that were adjacent to Insurance, but were actually trying to be integrated in the insurance value in a more meaningful way,’ Kyle explained to me.

He went on to add, ‘One of the things that we got really interested in as we started exploring Insurtech more in-depth was this idea we called incidental Insurance.  What we believed was that if you could use a modern technology stack and APIs to integrate Insurance more naturally and seamlessly in places where it was going to be highly relevant to people, you could give them great customer experience, make the product easier to buy and use, and also save them a lot of money because you could avoid spending on things that end up driving costs.’

With this in mind, Kyle left American Family Ventures in 2016 and founded Clearcover with co-founder Derek Brigham.  They decided that Car Insurance was the right line of business to start experimenting with this model.  

‘In P&C, we thought that the last fundamental distribution innovation was back in the 1930s, when GEICO started selling its product without the traditional commissioned agent.  In doing so, they were able to dramatically change their cost structure as an insurance company.  Because of that, they were able to offer the product for less money. Fast forward 80 years, the Internet came around and it changed how much money people spent or where they put their money, but it didn’t fundamentally change anyone’s (Insurance carrier) cost structure the way that the first distribution innovation did.  So, when we looked at what categories where customers serve to benefit the most from the affect of our distribution and business model, it was clearly Car Insurance.’

Clearcover went live with auto products in California February of this year.  As of today, they have sold over 6000 policies with annualized written premium approaching $10 million USD. Their premium run rate for the year is $17-18 million USD.

Clearcover’s Value Proposition

When it comes to startup Car Insurance providers in the US, many look to Root and Metromile.  

Both are fully-licensed Insurers, have raised some recent large funding rounds ($90m Series E for Metromile and $100m Series E for Root) and have Usage-Based Insurance (UBI)offerings within their products.  

Further, because they are fully-licensed Insurers who file quarterly earnings, their financials are regularly analyzed by Insurtech Influencer Matteo Carbone and Deputy CEO of P&C Partners for SCOR, Adrian Jones (a great quantitative analysis I must say!).

While these type of UBI offerings can be an interesting propositions for consumers, they are not for everyone.  ‘With a lot of these UBI-based products, you have to drive around for a while before you can get a quote. It’s not the type of system which lends itself well to relevant moments, because you have to commit to the insurance process for a very long time before you can make a decision,’ Kyle shared with me.  

Personally I agree.  While I like the concept of UBI, it is a bit of a commitment to me in terms of time and my personal data that I am not willing to give.

Building on the concept of incidental Insurance which Kyle mentioned to me above, is where Clearcover stands out in the current new offerings of Car Insurance in the US.

‘Kudos to them (Root and Metromile) for positioning and marketing this way.  For us, we have an Insurance product that doesn’t have a lot of complexity to it and is of really high quality, which also doesn’t require you to do much different than you would do if you were buying from a GEICO, Progressive or a State Farm. The difference is that the technologies that we’ve built allow us to deliver a better customer experience at a much lower price. Further, the use of integrated channel partnerships and our API to deliver the product in moments when it’s relevant to people allowing us to be more efficient with our advertising marketing money compared to what incumbents and startups spend,’ Kyle said.  

‘When we launched, we began with a product called Quote API, which helped us to work with price comparison engines and neo agents (digital agency platforms).   These were places where the customer is already looking for an Insurance quote. The Quote API also works in places like online shopping for a car, financing for a vehicle and online personal finance managers.  We think these areas were where we thought seeing an insurance quote would be relative to people and signed up a whole bunch of partners really quickly to use that API.’

Expanded API Offerings

‘What we’re now launching is an expanded API platform with more integration options for a partners outside the insurance industry so we can go directly to a consumer whether it’s when they’re shopping for a car, financing a vehicle, managing their personal finances, getting a loan, looking for ways to save money on bills, exploring different vehicle options, etc.’

‘There’s all sorts of opportunities for us to now say, look, you are doing something where Insurance is relevant, if you’re interested in saving a bunch of money, here’s a really easy way to start and finish that process with Clearcover.  We’re expanding the breadth of opportunities to bring Insurance to people when it’s going to be relevant to them, but the time in which they can go from interested shopper to Clearcover customer [and all while saving a bunch of money] is the fastest it’s ever been,’ Kyle explained to me regarding their new API offering.  

‘By the end of Q3 2018, we should have somewhere around 20 integrations live and that’s just the beginning.’

Some of the companies they are working with are, Gabi, Insurify and The Zebra (to name a few).  They are also starting to add more independent agencies as they continue the move some of their business online.  

If you are interested in learning more about their API for your business, visit this link.  A further write up of their expanded API from Clearcover’s VP of Product, Adam Fischer, can be found here.


As I was preparing for this article this week, I was speaking with one of my closest friends, who is in the tech industry.  I told him that this week’s article was on APIs. His reply was ‘oh, are APIs now the buzzword for Insurtech? That’s soooo 3-4 years ago, bro.’

Well, we know the Insurance industry has taken some time to catch up to the rest when it comes to digital and innovation.  Once we are in it, though, there is no turning back.

There are a number of reasons why the API is important to the Insurance industry.  As mentioned at the beginning:

  1. APIs help to enable digital ecosystems/platforms to distribute Insurance products with more ease and,
  2. Insurance carriers with API-enabled police admin systems/infrastructure will be able to be more nimble in their ongoing operations.

Ryan Hanley, now CMO of Bold Penguin, wrote a very interesting article last week about the value of APIs.  In this, he highlighted the APIs of Lemonade, Ask Kodiak, Roost, Bold Penguin and Risk Genius.  

A list of all Insurer, Intermediary and Enabler APIs can be found here from Coverager. You can also find links to many of the Insurance APIs themselves here.

Looking at all of these offerings, one can see that APIs are adding to the flexibility that needs to come into our industry.  

What Clearcover is doing is leveraging the concept of that flexibility along with the power of the ecosystem (the other buzzword mentioned in Prediction #2) to create cost-savings that they pass along to customers in the form of significantly more affordable car insurance paired with great service.

The combination of these two buzzwords and the concept of incidental Insurance may help to turn it from a product that is sold, not bought, to one that is bought without the need to sell.  

Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

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4th Money Laundering Directive for Prepaid Cards

Dear Valued Clients:

As you are probably aware, on the 20th May 2015 the European Union approved the Proposal to Amend Regulation 648/2012. This has become commonly known as the 4th Money Laundering Directive (4MLD).

As stipulated by the EU, the 4MLD will be finally adopted by all member states on the 26th June 2017. Gibraltar, being a member of the EU, will be adopting this Directive and it has already been transposed into local legislation.

The 4MLD brings along several important changes to the way that PAA CAPITAL can do business. It also makes important changes to the way our products can be sold and used.

Although our ability to continue issuing prepaid cards has not been affected, the initial load limits under which we can issue cards without cardholder verification, which you already know as KYC 1 (Know Your Customer Level 1), has significantly changed.

What are the main changes?

As of the 26th June 2017, the maximum load limit for KYC 1 cards will be reduced from . 2,500 to .250.

KYC 1 cardholders with less than .250, will have limited spend up to .100 through ATM or point of sale transactions.

To summarize, to load more than .250 or to exceed spend of .100, the cardholder must be verified.

What does this mean?

Prior to 4MLD, a KYC 1 cardholder could load .2,500 onto his prepaid plastic or virtual card before his identity and address information required verification. With 4MLD in place, a cardholder.s identity and address information must be verified to allow any loads above the new limit of .250.

A verified cardholder becomes KYC 2 and the full range of services of your Program would be available under the corresponding KYC 2 limits.

What will happen to KYC 1 cardholders on 26th June 2017?

As of 12:00 AM BST, on the 26th June, KYC 1 plastic and virtual cardholders, with a card balance that exceeds .250, will be unable to use their card(s) for any transaction. KYC 1 cardholders would need to have their identity verified to be able to spend their funds.

4MLD allows KYC 1 cardholders with less than .250 to spend up to .100 through ATM or point of sale transactions. To exceed spend of .100, the cardholder must be verified.

What does PAA CAPITAL recommend for Cardholders?

We recommend that KYC 1 cardholders verify their identity prior to the 26th June 2017.

Do these limits also apply to residents of France and Overseas Territories of France?

No. These new limits do not apply to residents of France or Overseas Territories of France as they are covered by the limits which have already been released and provided prior to this 4th Money Laundering Directive for Prepaid Cards.