High Levels of Global Insurtech Investments Continued During Q2: WTW

July 29, 2019

Insurtech investment worldwide continued at high levels during the second quarter of 2019, marking the fourth consecutive quarter during which total new funding commitments exceeded $1.2 billion, according to the new Quarterly InsurTech Briefing from Willis Towers Watson.

The report said 69 deals with a total value of $1.41 billion were announced in Q2 2019, which was a 2% reduction from Q1 2018.

The value of investments in property/casualty-focused firms rose in Q2 by 283% compared to Q2, 2018, while Life & Health deals rose by 259%. At the same time, the number of strategic investments by re/insurers hit a record high of 36.

This quarter’s funding has come from a number of later-stage investments, four of which total an excess of US$100 million, said the report.

The continued predominance of later-stage, typically larger investments, pushed down overall transaction volume by more than a fifth, as the number of early-stage investments dipped to its lowest point since Q3, 2017, said the report, noting that this indicates increased maturity of the insurtech sector.

Seed and Series A funding into global insurtech start-ups attracted $147 million in Q2, WTW said. Of that total, 59% of target ventures focused on insurance distribution, while 54% was invested in insurtechs outside the U.S. or UK.

“Technology as a strategic vertical is now commonplace in nearly every single insurer and reinsurer across the globe, but the technology from the incoming insurtech pastures may not be quite as green or [may not be] impacting as many incumbents had hoped – or at least anticipated,” said Dr. Andrew Johnston, global head of Insurtech at Willis Re.

“There is no reason why commercial insurance sectors around the world, across most classes of business, cannot be supported more ubiquitously by readier access to appropriate quote, bind, issue platforms,” commented Ben Nicholls, global leader of Willis Re’s Alternative Distribution Operations.

“But only a few specialty insurers have begun to use technologically sound systems extensively,” he added. “The evolution is relatively slow, but we are now meeting a number of insurtech businesses that seem genuinely to have cracked it.”

Source: Willis Towers Watson

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