Article Synopsis :
Global insurtech investment has exceeded US$2.5 billion over the first three quarters of 2018, according to research from CB Insights. This is already 15% up on the total investment in 2017.
Large investments are more frequent, with 19 financing rounds in 2018 of more than US$30 million, with more startups focused on property and casualty than life and health.
The reinsurance market is driving complimentary startups, and data from Willis Towers Watson shows that in the first two quarters of 2018 had placed more investment in private technology startups than in 2017.
It’s not all about consolidation, either, with US$21.6 billion being spent by reinsurers since 2012 on private tech deals.
General liability insurance is a growth area, while small and medium business insurance is catching up relatively slowly.
Though it has come a long way, from on 4% of small business insurance being underwritten digitally in 2015, estimates suggest this will only have reached about 26% by the end of 2020.
Cyber risk is on everyone’s minds, and insurance market is trying to build infrastructure to support this market. The market for cyber insurance is expected to exceed US$9 billion by the end of 2020 from around US$7.5 today.
More than 50% of this premiums are from the US market, but the rest of the world is gradually waking up to cyber risks and the need to mitigate them.
Industrial risk technologies are being built to help reduce the risk – and causes – of industrial injury through improving safety assessments but also smart devices that can indicate when a worker is about to like something incorrectly.
Not all startups will work, but there is plenty of opportunity. The mysterious decline of life insurance is no mystery, but based upon the rise of the gig economy.
Simplified insurance products may make headway in this very cost sensitive market.
Added benefits may prove attractive and some insurers and brokers are offering policies with perks.
The paper suggests if insurtech follows what has happened with fintech, challengers who have been seen as disruptors will become partners, assisting existing players improve their distribution.
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Digital Insurer's CommentsThis CB Insights paper combines multiple sources of research to give useful insights on the development of the insurtech market.
What is clear that the development and implementation of insurtech shows no signs of slowing down. In fact, the trend has become for fewer, larger deals to be done.
The role of reinsurer as angel or incubator is interesting and demonstrates a belief that insurtech will deliver risk mitigation as well as revolutions in customer experience and engagement.
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