[Skip to content]

Sign up for our daily newsletter
The Actuary The magazine of the Institute & Faculty of Actuaries

InsurTech investment hits all-time high

InsurTech firms enjoyed record levels of investment in 2019 following huge spending in the final quarter, research from Willis Towers Watson (WTW) has uncovered.

InsurTech funding hits record high ©iStock
InsurTech funding hits record high ©iStock

The findings show that the insurance technology sector attracted $6.37bn (£4.9bn) of investment worldwide last year, representing more than a third of the historical total.

This included a record-breaking $1.99bn of spending on 75 projects in the fourth quarter, with P&C start-ups taking a greater share of investment than their life and health counterparts.

Last year also saw the creation of five new unicorns – privately held start-ups valued at over $1bn – meaning that there are now 10 InsurTechs to have reached this threshold globally.

Dr Andrew Johnston, global head of InsurTech at Willis Re, said: “2019 was the year when individual InsurTechs began to come to the fore to lead in specific parts of the market.

“For example, UK-based Concirrus is now clearly the forerunner in behavioural-based analytics for the speciality markets.”

However, despite record levels of investment and “postulations of the art of the possible”, Dr Johnston warned that there have also been a significant number of individual cessations.

“The number is very difficult to calculate, but our data indicates that, during the past three years, approximately 184 funded InsurTechs might have closed their doors,” he added.

The study involved discussions with 10 InsurTech firms: Metromile, Benekiva, ClaimVantage, Claimspace, Claim Central, DeepFraud, Global Parametrics, Adjoint, Banqu, and Spixii.

The researchers warned that, despite the insurance industry’s growing reliance on technology, end-to-end automation doesn’t work in all scenarios, even in consumer lines.

“This means that claims handlers will remain in the driving seat," said Tom Helm, head of claims consulting at WTW's insurance consulting and technology business.

"Some aspects of the claims process require complex human judgement or investigation, and other cases, such as the need to empathise with a customer who needs support, demand the human touch.

"It is essential that automated mechanisms are able to identify when a situation needs human intervention, making effective management of the interaction between handler and machine a critical consideration.”

Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession