Singapore:
Total new worldwide funding commitments to the InsurTech sector in 2019 have already surpassed the 2018 full-year total, and during the third quarter exceeded $1.2 billion for the fifth consecutive quarter-year period, according to the new Quarterly InsurTech Briefing from Willis Towers Watson, a leading global advisory, broking and solutions company.
83 deals with a total value of $1.50 billion were announced in Q3, 2019, up 6 per cent over the previous three months to reach the third-highest quarter for global InsurTech investment to date. Deal numbers were up 20 per cent, and marked the first quarter since Q2, 2018 when investments in B2B InsurTechs outnumbered investments in distribution-focused ventures. The value of investments in property/casualty-focused firms continued to rise, supported up by three mammoth deals backing Root Insurance, Hippo, and PolicyBazaar.
During the first three quarters of the year, a total of US$4.36 billion has been deployed to InsurTech companies across 239 transactions. That already marks a 5 per cent increase from the total amount of investment in all of 2018. Deal activity is on pace to beat last year’s total.
Dr Andrew Johnston, Global Head of InsurTech at Willis Re, says: “The continuing rise in InsurTech investment acknowledges the enormous role technology has to play in our industry, but we need to avoid becoming a sector jaded and frustrated by it. Today’s InsurTech is as much about hype and entrepreneurial culture as it is about appropriate technology for the (re)insurance industry.
“InsurTech’s greatest achievement to date has been to act like a defibrillator on the heart of the insurance industry. People across the sector now talk more positively about the use of technology. Some see it as the potential saviour of a broken system.”
Asia Pacific (APAC)’s share of InsurTech deals has also grown from 16 per cent in 2012 to 23 per cent of all deals for the last four quarters. In Q3 2019, the region was responsible for 30 per cent of all deals. In comparison, Europe as a whole generated 16 per cent of all InsurTech deals. The majority of growth in APAC can be attributed to the rise of China’s growing health insurance industry.
This quarter, China contributed 13 per cent of total InsurTech deal activity globally, driven by an increase of interest in start-ups contributing to the growth of China’s health insurance industry. Start-ups such as Xiaobangtouzi, Mintbao, and Duobaoyu are providing platforms for consumers to engage on health insurance coverage with consultants and brokers, and access educational resources on digital channels such as WeChat. Nuanwa, which spun out of Zhong An Insurance with seed funding from Sequoia Capital China, is helping to provide technology to connect insurance companies to the health care system in China.
Jason Rodriguez, one of the thought leader says: “Policy administration systems form the backbone of policy issuance. Over time, the process has become increasingly automated. With InsurTech innovations, insurers are able to achieve a complex, bespoke information technology solution that fits their businesses by abandoning one-size-fits-all systems in favour of a mix-and-match approach. This allows them to shop for value in one functional area while investing in a best-in-class solution in another.”