Peter Thiel, co-founder of PayPal and an early investor in Facebook, has returned his attention to the fledgling insurtech scene by leading a $10m investment into Berlin-based startup Coya.

What sets Coya apart from other insurance start-ups is that it has applied to German financial regulator BaFin be a fully licensed and regulated insurance carrier.

The vast majority of insurance start-ups have been looking to enable incumbent insurers – by offering expertise in areas where they are particularly weak, such as digitalisation and social media – rather than disrupt them.

Peter Thiel’s fund, Valar Ventures, led the seed funding in August and has previously invested in other insurance companies such as Brolly.

Read more: Forget fintech — insurtech is here and it’s got bots

Coya describes itself as a fully digital insurer; it will use artificial intelligence and provide personalised cover, and already has around 30 employees.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Disruption from start-ups in insurance is so limited due to the substantial barriers to entry in the market.

Startups need huge capital to begin underwriting risk, which has further increased under new regulations like the so-called Solvency II, and face a range of regulation and compliance requirements.

Therefore the easiest route to market for techies, following the success of fintech, has been to work with the established players.

This is why Coya could cause such a stir.

It is set to launch in 2018 and is yet to announce the particular insurance lines it will cover, but the big-name investor, the amount already raised, and the intention to become a carrier set it apart from other insurance start-ups.

Read more: London named “undisputed centre for European insurtech” as UK investment booms

Even with these advantages, the route to writing insurance will be extremely tough for Coya.

However, a precedent will have been set.

Insurers that are only concerned about technology to the extent that their direct competitors are embracing it may have far more to worry about from insurtech than they expected.