Despite the challenges faced by the (re)insurance sector in 2020 and the relatively slow start to InsurTech funding for the year, global investment in the sector reached a new accumulated annual high of USD 7.1 billion for 2020, through 377 deals, the most in any year to date, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.
Compared with 2019, total funding increased by 12%, while deal volume increased by 20%. InsurTechs raised USD 2.1 billion across 103 deals during Q4, with 67% of the funds attracted by property/casualty-focused firms. Life & health InsurTechs saw a modest decrease in deal share of 1.6 percentage-points in the quarter, and an 8.4 percentage-point decline in total funding over Q3, 2020.
Q4 fundraisings in excess of USD 100 million by later-stage companies Hippo, Unqork, Waterdrop, Oscar Health, Bind Benefits, and Newfront Insurance totalled USD 1.1 billion, as early-stage deals declined to 47% of the total from 57% in Q3, 2020. Mid-stage Series B or C deal flow surged somewhat to reach 29% of the total number. InsurTechs from 23 countries attracted investor capital, including in previously dormant Hong Kong, Brazil, and Switzerland.
Dr Andrew Johnston, global head of InsurTech at ICMIF Supporting Member Willis Re, said: “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. Many InsurTechs probably feel vindicated that the insurance industry has been forced to realize the value of technology. The issue for InsurTechs now is to survive months, possibly years, of market uncertainty.”
The latest Briefing, which focuses on InsurTech for life, accident and health (re)insurance, opens with a detailed exploration of the segment. The Briefing includes case studies of the InsurTechs Afficiency,a digital life insurance platform that allows new products to be digitized and distributed rapidly; Inclusivity Solutions, focused on hospital cash products and medical association gap protections for emerging markets; Decent, which aims to offer affordable health insurance for underserved groups; dacadoo, which operates a motivational digital health engagement platform; Player’s Health, a provider of digital risk management services to sports organizations; Abi Global Health, a medical micro-consultation service; and Global IQX, which automates new business and renewal processes in the employee and voluntary benefits sector.
The Briefing includes discussions with Stephen Goldstein, Vice President of RGAX, the InsurTech investor and incubator of life reinsurer RGA; with Adrian Gore, founder of insurer Discovery, which through its Vitality program is driving behavioural improvement among insureds and integrates resulting changes into insurance pricing; and with Santosh Gon, Chief Information Officer for Aviva Singapore, who leads development of the company’s technology environment.
The Briefing also includes a deep-dive into the recent USD 14 million Series A investment in Coherent, which provides digital platforms and data intelligence engines, and an exploration of Willis Towers Watson’s Optimum SAA, a web-based platform for strategic asset allocation that helps users find their optimal weightings to achieve better risk management and investment return.
Finally, the issue carries an article by Ryan Jessell, Senior Director and Head of Individual Marketplace Strategy at Willis Towers Watson, on the movement to electronic enrolment, and the new roles of agents and brokers. The article is followed by Jessell’s discussion with John Jevin, Senior Director, Information Technology at Aetna.
Jessell said: “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. That said, the profile of the agent/broker market has continued its evolution, with a proliferation of large-scale call- center 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.”
View the full report here.