Insurance and insurtech looking to be more lucrative than ever
Innovation is always going to attract investment and insurtech is no different.
As always, the amount of investment is changing the way the market works as it does every sector. Look no further than to Manchester City’s second title win in a row to see how much money talks.
“By 2030, almost a quarter (24%) of the personal insurance market could be interrupted due to the changing nature of risk and better data. As a result, it will give a £6.6bn boost to the business.”
In fact, the first quarter of 2019 saw the most insurtech deals ever recorded in a single quarter. Furthermore, it was the third quarter in a row that saw the value of these deals reach over $1bn.
According to Willis Towers Watson, there were 85 deals with a total value of $1.42bn. However, while the deal count increased by 35% from the last quarter, the funding volume decreased by 11%. But, in another record, there were 10 deals over a value of $40m, a 67% increase from the previous quarter. There were also 15 investments over $20m and 11 investments over $30m.
The largest deal of Q1 2019 was a $500m Series E funding round into Clover, a medicare advantage start-up from Greenoaks Capital Management.
Other notable deals included:
- Wefox received $125m in Series B investment. The German firm’s total funding now stands at $164.31m;
- Baloise Group invested $84.25m into Friday, a Germany-based car insurer;
- China-based Shuidihuzhu gained $74m to hit a new total of $105.7m;
- Acko General Insurance completed a Series C funding round of $65m. This takes its total funding to $107m, and
- Shift Technology also completed a Series C funding round to the tune of $60m which brings its total funding to $99.72m.
All of insurance on the up in the UK
The insurance sector in the UK is expected to get a $64.3bn (£49.5bn) booster shot due to tectonic changes in technological, macro-economic and behavioural patterns by 2030, reveals a report published by PwC.
Overall, the UK financial sector is expected to gain more than $137.66bn (£106bn) in new business in service developments as companies work to fulfil the changing habits of consumers.
Titled ‘Harnessing the power of disruption’, the report highlights that the emerging risks and new tech could drive disruption in commercial lines insurance, which will be equal to 25% of current revenues.
This change will lead to an estimated market surge of £27.6bn by 2030.
Additionally, the report predicts that disruption opportunities in the life and pensions sector could benefit the market by £15.7bn.
By 2030, almost a quarter (24%) of the personal insurance market could be interrupted due to the changing nature of risk and better data. As a result, it will give a £6.6bn boost to the business.
The disruptions, according to report, is being fuelled by “new entrants” due to their approach of offering new, more customer-centric and digitally enabled services.
It’s clear that now is a very lucrative time to be in insurance and insurtech. Inside this issue, we look at one of the most hyped in the sector, Lemonade. Also Dead Happy is trying to reinvent the entire process for the benefit of the customer while Zego build partnerships over the globe.
The money is only set to increase as firms develop their offerings and more insurtechs enter the sector.
Patrick Brusnahan, Editor