July 21, 2017
Funding for InsurTech start-ups reached $985mn in the second quarter of 2017 according to research produced by Willis Towers Watson Securities and Willis Re in collaboration with CB Insights.
This compares to a funding volume of $398mn in Q2 2016, representing a year-on-year growth of 148 percent, while Q1 2017 funding stood at $283mn.
Willis Towers Watson noted that there was a record total of 64 transactions in Q2 2017, nearly double the 34 deals reported a year ago.
Geographically, US-based transactions represented 45 percent of the Q2 2017 total, down from 65 percent of all deals since 2012, highlighting a growing interest in InsurTech internationally.
The UK was the next biggest market with 9 percent of transactions, followed by France at 8 percent and Germany with 6 percent.
Of the overall 64 InsurTech transactions during the second quarter, 34 were P&C focused whilst the remaining 30 were life and health focused.
Within P&C, start-ups remained targeted on distribution, with 64 percent of Q2 2017 P&C start-ups focusing on this segment of the market. In contrast, just 9 percent were carrier start-ups – up from 5 percent of all such deals since 2012 – while the remaining 27 percent targeted the B2B market.
Willis Towers Watson said that (re)insurers made a record 31 private technology investments in InsurTech firms in the quarter, up from 27 in Q2 2016.
Meanwhile, funding for early-stage companies, including life and health start-ups, also climbed to a record volume of $289mn, with these types of deals comprising 63 percent of total transactions in the quarter.
Commenting on the findings, Andrew Newman, president and global head of casualty at Willis Re, said: “The $985 million that was invested in InsurTech in the second quarter of 2017 serves as another indication that change is coming to the industry.
Whether disruption beckons or opportunity unfolds is primarily a matter of perception relative to each company’s position in the insurance value chain. It is not the technology that is disruptive, but the degree to which a competitor can successfully wield that technology compared to another.”