Investment in the insurance technology industry increased by 385% to $679m (£480m) across Europe last year, with the continent emerging as the world’s top InsurTech hub outside North America.
That is according to a new report from consultancy firm Accenture, which finds that Europe accounted for one-third of all global investment in 2017, with the number of deals there jumping by 118%.
Britain continues to be the key driver of this growth, with investment in UK-based InsurTechs increasing from just $19m in 2016 to $364m last year, despite uncertainty around the country’s vote to leave the EU.
Total investment around the world increased by 39% over 2017, with the value of deals rising by 32% to $2.3bn.
“The InsurTech industry’s rapid growth reflects investors’ response to consumer appetite for change in an industry sitting on trapped value,” Accenture insurance managing director, Roy Jubraj, said.
“However, insurers must recognise that investments alone can’t deliver the levels of change the industry requires. The key is having an enterprise-wide innovation strategy that transforms the core business and enables the company to drive growth.”
Despite accounting for 46% of the InsurTech deals last year, growth in North America only increased by 6% last year, compared to the 118% rise recorded in Europe, and a 27% increase in the Asia-Pacific.
The analysis shows a steady decline in North America’s share of global InsurTech investment since 2014, with Europe increasingly accounting for more.
Deals by region over the last four years are shown below:
It was found that property and casualty was the most popular insurance segment for InsurTech investment in 2017, accounting for 42% of funding, followed by multiline and health which were responsible for 26% and 18% respectively.
The research also shows that the number of traditional insurers participating in venture capital investments is up 63% over the last five years, with health and digital health, the internet of things, and big data and analytics most popular.
Michael Costonis, who leads Accenture’s insurance practice globally, said InsurTech was now a “global phenomenon”, with insurers helping to reshape the technology landscape across the industry.
“Insurers are making investments beyond wearables and telematics to seize the opportunity that exists within distribution to strengthen the customer experience,” he said.
“The next step is to use InsurTech as a springboard to innovate across their entire organisation. After all, $2.3 billion is a small slice of the pie when you consider that insurance is a $4.2 trillion industry.”
InsurTech is expected to help generate over $400bn (£312bn) worth of premiums worldwide by 2023, more than double the estimated $187bn today.
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