InsurTech Start-up Landscape Identify Opportunities and Challenges 2020
Synopsis
Insurtech start-ups are emerging as the insurance industry is waking up to the technological advancements customers have come to expect from other industries. The banking sector has been transformed and disrupted greatly by financial technology (fintech), but insurance technology (insurtech) remains a long way behind and a very different proposition, despite recent progress.
Insurtech start-ups are emerging as the insurance industry is waking up to the technological advancements customers have come to expect from other industries. The banking sector has been transformed and disrupted greatly by financial technology (fintech), but insurance technology (insurtech) remains a long way behind and a very different proposition, despite recent progress.
Funding to insurtech start-ups surpassed US$1.0 billion
halfway through 2016, highlighting the progress made. However, substantial
improvements remain essential in basic areas such as mobile websites and apps,
while more innovative areas such as blockchain and the Internet of things (IoT)
have the capacity to revolutionize the industry.
The vast majority of insurance start-ups are looking to
partner with current insurers, as opposed to challenging them. Areas such as
customer engagement – particularly improving processes and platforms,
increasing efficiency and reducing administration costs – or helping with
regulation are the main areas where start-ups are having success.
Looking to challenge the incumbents is extremely difficult, predominantly due to the capital required to underwrite insurance. The most successful start-ups have been identifying insurers’ weaknesses, and working alongside them to make improvements.
Looking to challenge the incumbents is extremely difficult, predominantly due to the capital required to underwrite insurance. The most successful start-ups have been identifying insurers’ weaknesses, and working alongside them to make improvements.
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Summary
Globally, start-ups received US$1.8 billion in funding in the 12 months to June 2016 – down 20.97% on the previous year – although there were 150 deals in that period, which represented a 44.2% rise on the year before.
Globally, start-ups received US$1.8 billion in funding in the 12 months to June 2016 – down 20.97% on the previous year – although there were 150 deals in that period, which represented a 44.2% rise on the year before.
The substantially more deals being done in the last year and
less overall funds being raised is due to an increase in angel investments and
early-stage deals, with 48% of deals last year being angel investments. This is
because Axa, Allianz, Munich Re, and Swiss Re have established capital venture
funds; usually with a budget of around US$100 million to look into investing in
innovation and start-ups.
Zhong An, China’s first digital insurer and its best-funded
InsurTech startup to date, received US$931 million in 2015, which represented a
considerable percentage of the total for that period.
Scope
The vast majority of insurance start-ups are seeking to enable insurers, not disrupt them.
The vast majority of insurance start-ups are seeking to enable insurers, not disrupt them.
The industry is very difficult to break into due to
competition at an underwriting level, the amount of funds needed and the level
of regulation. This means that most insurtech start-ups are targeting the
consumer engagement side of the business – improving the processes or helping
with regulation and therefore aiming to partner with incumbent insurers.
Motor, health and home insurance are the main areas where
innovation has thrived, and relative success has been seen in the use of
wearable Fitbits, telematics and connected homes. All three are at relatively
early stages of development, but have already seen strong consumer engagement,
which is set to increase substantially over the next five years.
Reasons To
Buy
Primary research, with interviews with people heavily involved in insurance start-ups, including founders and mentors
Breaks the market down by technology, such as big data, peer-to-peer etc., discusses trends, gives examples and insight from relevant primary research
Further break downs into life, non-life and health start-ups
Extensive coverage and analysis of the biggest deals and partnerships around the world in 2016
Insight into upcoming regulation and how it may impact the market
Use of exclusive data from Timetric’s survey on the future of technology in insurance
Primary research, with interviews with people heavily involved in insurance start-ups, including founders and mentors
Breaks the market down by technology, such as big data, peer-to-peer etc., discusses trends, gives examples and insight from relevant primary research
Further break downs into life, non-life and health start-ups
Extensive coverage and analysis of the biggest deals and partnerships around the world in 2016
Insight into upcoming regulation and how it may impact the market
Use of exclusive data from Timetric’s survey on the future of technology in insurance
Key
Highlights
• Start-ups in insurance have only really been a force in the last few years, and certainly after fintech was well-established.
• Start-ups in insurance have only really been a force in the last few years, and certainly after fintech was well-established.
• Unlike fintech, which offers a direct challenge to the
banks ans financial institutions, insurtech start-ups have generally been
looking to work with insurers and improve their weakest areas.
• The non-life lines, motor and property in particular, are
well ahead of other lines of insurance, in terms of both use of technology and
start-up penetration.
• The incumbent insurers are becoming more and more keen to
work with start-ups, with several substantial deals being completed globally
over the past couple of years.
TABLE OF CONTENTS
1 EXECUTIVE SUMMARY
2 INDUSTRY OVERVIEW
2.1 Start-up Summary
3 TYPES OF START-UP
3.1 Big Data
3.2 Peer-to-Peer Insurance
4 LIFE/ NON-LIFE START-UPS
5 KEY CHALLENGES
6 ROLE OF THE LARGER COMPANIES
6.1 Deals
6.2 By Geography
7 FUTURE OUTLOOK
8 REGULATION
9 DEFINITIONS AND METHODOLOGY
1 EXECUTIVE SUMMARY
2 INDUSTRY OVERVIEW
2.1 Start-up Summary
3 TYPES OF START-UP
3.1 Big Data
3.2 Peer-to-Peer Insurance
4 LIFE/ NON-LIFE START-UPS
5 KEY CHALLENGES
6 ROLE OF THE LARGER COMPANIES
6.1 Deals
6.2 By Geography
7 FUTURE OUTLOOK
8 REGULATION
9 DEFINITIONS AND METHODOLOGY
Continued
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