InsurTech investment predicted to reach record high

Insurance technology companies attracted $3bn (£2.4bn) of investment in the first half of 2019 worldwide, and are on track to receive a record $6bn by the end of the year.

InsurTech investment predicted to reach record high

That is according to a new report from Hampleton Partners, which highlights growing interest in emerging technologies like telematics, drones and mobile-first platforms.

It shows how annual InsurTech investment almost doubled from $2.2bn in 2017 to a record $4.2bn in 2018 across 257 deals, with 324 transactions predicted this year.

“Emerging technologies offer solutions to underserved markets, enhance business models, or create new markets altogether,” Hampleton Partners founder, Miro Parizek, said.

“For example, InsurTechs are taking advantage of global trends in smart home device tech to shift towards proactive risk management for homeowners, rather than reactive risk assessment.”

How InsurTech investment has changed since 2012 is shown below:

 

 

The report reveals how European companies have attracted nearly one-third of InsurTech funding, with Europe’s global investment share growing from 23% to 31%.

This has been spearheaded by Germany, the UK and France – half of the 10 largest insurance technology investments in 2018 flowed into companies based in Berlin.

Meanwhile, there have been 132 InsurTech mergers and acquisitions since 2016, with 18 of acquirers having been involved in more than one transaction over the last three years.

The findings come after data analytics firm GlobalData recently urged insurers to offer instant, flexible, digital quotes, warning that they can no longer rely on their brand to retain customers.

“Established players have to adapt to progress made by start-ups or consumers will begin to go elsewhere,” said Ben Carey-Evans, insurance analyst at GlobalData.

“They can no longer rely on their trusted brand names as they are not just competing against start-ups, but can be left behind by their competitors partnering or investing in them.”

 

Image credit | iStock

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