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.
83 deals with a total value of $1.50 billion were announced in Q3, 2019, up 6% over the previous three months to reach the third-highest quarter for global InsurTech investment to date. Deal numbers were up 20%, 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-focussed 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% 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.”
The latest Briefing focuses on policy administration and central management systems. The Q3 edition features RiskGenius, which uses AI techniques to understand the contents of an insurance policy; the Canadian InsurTech ProNavigator, an AI platform to automate workflows that deploys natural language processing; and Britecore, a cloud-native administration platform delivered through Amazon Web Services.
The Briefing also includes a discussion with Philip Walker, CEO of iptiQ Americas, about the development and potential impact of the digital end-to-end platform iptiQ; an article about Willis Towers Watson’s Unify, an end-to-end business process automation tool that allows users to integrate and automate disparate systems; thought leadership from Jason Rodriguez, Data Science Lead at Willis Towers Watson’s Insurance Consulting and Technology Americas; and an examination of recent fundraising rounds by Hippo, the California-based home insurance provider, and Root, the American app-based motor insurer.
Rodriguez 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.”