A new analysis of 2,000 global insurtechs shows rapid growth, evolving product focus, and a growing crop of innovative opportunities.
Over the past decade, the insurance industry experienced a technological revolution. Emerging skills like aerial imaging, artificial intelligence, big data, claims automation, and telematics has become more widespread as insurers have increased technology usage to optimize cost and processes.
However, not all insurers have been swift in adapting their in-house competencies. Some insurers have instead increasingly relied on the platforms and services of a growing insurtechs landscape that’s witnessed unsteady growth recently.
Insurtechs proposing artificial intelligence, machine-learning solutions, and software as a service (SaaS) have been leading recent insurtech focus. Key technology trends include:
An analysis of approximately 2,000 global insurtechs focusing on health insurance, life, property, and casualty (P&C) found that from the years 2010 to 2020, about 1/3rd of them gained funding and a few created strategic partnerships with at least one incumbent. Insurtech funding peaked in 2020 with over €6 billion in deals.
In product categories, 66% of insurtechs work in P&C lines of business (led by auto insurance), while 18% and 16% respectively focus on health insurance and life insurance. Around 47% of insurtechs launched between 2000 and 2020 focused on personal lines, with the number of operations in commercial lines increasing recently.
With the increasing focus on commercial lines, the increased funding might push insurtechs into exploring new and exciting breaks, especially for small and midsize enterprises (SMEs). The SME segments need customization, experience, and lower product complexity making this space suitable for insurtech interest.
Global Insurance Pools insurtech database, P&C insurance leads health and life segments, in technological innovation. Across the insurance value chain, the most substantial insurtech presence has been felt in marketing and distribution, with several insurtechs achieving footholds with traditional insurers’ investment and partnerships.
However, increasing innovation is also apparent in operational aspects like policy servicing (particularly in life), claims (notably in auto), and back-office functions and operations (especially in health).
As the insurance industry is dynamic, the timing of entry and focus is critical. Focusing on the themes mentioned at the right time can be a distinctive factor—not just for investment and acquisitions but also for mutually beneficial relationships.