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Booming insurtech investment won’t stop: Willis

Willis Towers Watson says global investment in insurtech reached a new quarterly high of $2.55 billion in Q1.



The global insurtech industry received record investments in the first quarter of 2021 and shows no signs of slowing, says consultancy Willis Towers Watson. WTW is also an insurance broker and is affiliated with Willis Reinsurance.

After a brief stumble in early 2020 due to the onset of the coronavirus pandemic, fundraising activity more than rebounded, with the industry receiving $2.55 billion in Q12021 – an increase of 180 percent compared to Q12020, but also a rise of 22 percent versus Q42020.

Property and casualty companies received 69 percent of deal share, while eight companies won the lion’s share, accounting for more than $1.13 billion in funding, or 44 percent of the total.

These companies are mostly Western, including the likes of San Francisco-based Coalition, which covers cyber risks, and the U.K.’s Zego, a commercial motor insurance provider. These two companies are now valued as unicorns ($1 billion or more). 

The biggest deal in Q12021 was a $250 million Series E to Next Insurance, another Silicon Valley firm, which used the funding to acquire Juniper Labs and AP Intego. Already a unicorn, Next Insurance doubled its valuation to $4 billion.

The U.S. accounted for 48 percent of insurtech funding in Q12021, and the country remains the biggest market. However, the rest of the world is becoming more relevant: in Q12020, the U.S. grabbed 57 percent of funding.

However Q12021 also saw the most geographically diverse funding, supporting early-state insurtech startups across 24 countries, including Bangladesh, Estonia, Brazil, Nigeria, and UAE.

This reflects more than just a growing number of insurtech companies or digital solutions. It’s about the growing acceptance among users of these soluitons.

“Technological innovation gains ground only when a community emerges to support it, and COVID-19, more than any other factor, has rapidly accelerated the change that was already well under way,” said Andrew Johnston, global head of insurtech at Willis Re. “COVID-19 has helped strengthen the narrative, and demonstrably illustrate the results technology can deliver, which are now being achieved at scale.”

He says few insurtechs will achieve grandiose dreams of industry transformation, as the industry is difficult to disrupt. But those with a clear grasp of their customers can do well, and benefit from being in a growing community of companies deploying new technologies.

One of the challenges of measuring “insurtech” is that more companies are identifying themselves as such, as so many aspects of insurance are going digital. Although there is a risk of making a nonsense of the term, it does suggest that funding into “insurtech” is slated to keep growing, Johnston said.

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