There is a wide variety of possible business models for insurtech companies along the value chains of insurance products. To describe the various business models of insurtech companies, many different terms are used (e.g. on-demand insurance, peer-to-peer insurance, open insurance etc.). Insurtech companies can also provide support to insurers during the technical transformation of particular points in the value chain (e.g. product design, claims processing) or bring about new trends on the market. The use of innovative technologies is often in the foreground here , including big data and artificial intelligence as well as distributed ledger technology, e.g. in the context of smart contracts.

If insurtech companies wish to bear the risks inherent in an insurance contract themselves, they require authorisation from BaFin to carry on insurance business under section 8 (1) of the Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG). Applicants may also find it helpful to refer, early on in the process, to the information provided in the expert article "Starting out is always expensive", published on the BaFin website on 12 February 2021. Insurtech companies that wish to apply for such authorisation are subject to the same legal requirements as other insurance companies. In BaFin’s day-to-day supervision, it does not differentiate between traditional insurers and insurtech companies. However, its experience supervising insurtech companies has shown that uncertain forecasts for the future represent a particular risk factor, which in part requires supervisors to define particular areas of focus.