Insurance technology companies attracted a record $7.1bn (£5.15bn) of investment across 377 deals last year, analysis by Willis Towers Watson (WTW) has revealed.
This comes after InsurTechs raised $2.1bn in the final three months of 2020 alone, with 67% of the funds attracted by property and casualty-focused firms.
Life and health-focused companies saw a modest decrease in deal share, declining by 1.6% in the final quarter, with funding falling by 8.4%.
Despite the COVID-19 pandemic, and a relatively slow start to investment last year, total InsurTech funding increased by 12%, with deal volume rising by 20%, in comparison with 2019.
“While our industry is facing extreme issues relating to COVID-19, we also have an unprecedented level of access to technology and technologists who can help it prevail during these times of instability,” said Dr. Andrew Johnston, global head of InsurTech at WTW's reinsurance arm, Willis Re.
“Many InsurTechs probably feel vindicated that the insurance industry has been forced to realise the value of technology. The issue for InsurTechs now is to survive months, possibly years, of market uncertainty."
Insurance technology firms from 23 countries attracted investor capital last year, including in previously dormant Hong Kong, Brazil, and Switzerland.
Fundraising in excess of $100m in the final quarter by later-stage companies Hippo, Unqork, Waterdrop, Oscar Health, Bind Benefits, and Newfront Insurance totalled $1.1bn.
WTW's briefing includes case studies on InsurTechs for life, accident and health (re)insurance, and an article on the movement to electronic enrolment, and the new roles of agents and brokers, by Ryan Jessell, senior director and head of individual marketplace strategy.
“The initiatives winning priority among life and health insurers’ technology departments are those that support agents and brokers by simplifying their efforts to help customers purchase and manage insurance policies,” Jessell said.
“The profile of the agent/broker market has continued its evolution, with a proliferation of large-scale call-centre and web-based agencies experiencing explosive growth. The key for InsurTechs looking for opportunity is to understand the role they can play in facilitating or enhancing connections along the value chain.”
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Author: Chris Seekings
