Insurtech Report 2H2019
Over the past three years, insurance vendors in the industry have seen emerging technologies penetrate the insurance mainstream. Typically, these new technologies offer solutions to underserved markets, enhance business models, or create new markets altogether. Usage-based insurance in connected homes, for instance, has been possible through the introduction and adoption of IoT. Other emerging technologies include cybersecurity solutions, drones, or telematics.
Insurance vendors need to adapt and are thus adopting these new technologies, taking advantage of global trends in smart device tech to shift towards proactive risk management for policyholders, rather than reactive risk assessment, in this new disruptive business model.
This has led to a huge increase in the number and value of fundraises worldwide. Start-ups and disruptive insurtechs have received investment from both large insurance vendors and growth financing entities. Furthermore, M&A activity continues to remain stable, with around 15 per cent of acquisitions made by financial buyers seeking out solution provider veterans in need of modernisation.
The report includes:
- Trends and analysis of deal activity
- Deal geography
- Top acquirers
- Valuation metrics
Global insurance tech investment 2012-2019
Fundraising in new insurtech start-ups has demonstrated impressive growth. Annual value raised by insurtech firms almost doubled from 2017 to 2018, reaching a record $4.2 billion in 2018 from $2.2 billion in 2017.
In 2019, growth in value has continued. As per CB Insights and Reinsurance News, a handful of large insurtech funding deals in the first two quarters of 2019 brought the total amount raised so far this year to almost $3 billion. This reflects the maturation of fintech unicorns; rising valuations; higher burn rates, as sophistication and market penetration advance; and the resulting need for significant capital.