Risk Management

Investors from outside insurance sector buying into insurtech: Report

Matthew Lerner

May 23, 2018 Reprints

Willis Towers Watson United Kingdom Agents & Brokers Risk Management Technology More + Less -

Investors from outside insurance sector buying into insurtech: Report

Explosive growth in the insurtech sector is attracting interest from investors outside the insurance industry, driving deal levels to new heights, according to a report from Willis Towers Watson P.L.C. issued on Wednesday.

In its Quarterly Insurtech Briefing Q1 2018, the broker says that the $724 million of insurtech funding made available in first quarter 2018 was 16% higher than fourth quarter 2017 and 155% more than first quarter 2017.

The highest-ever volume of funding was during second quarter 2015 when $1.852 billion transacted, the report said.

The first quarter's 66 transactions were the most recorded for a quarter and 29% higher than the 51 transactions in fourth quarter 2017 and 74% up on the 38 from first quarter 2017, the report said.

While the U.S has led deal activity, 60% since 2013, the report said, it accounted for just over half, 53% in first quarter 2018, showing increased international investment, the report said, with the U.K. coming in second during first quarter 2018 at 12%.

One figure, however, stood out, according to the report.

Of the seven transactions that each raised over $30 million, “there was only one developed market incumbent insurer participating in the fundraising while the remaining funding rounds were dominated by traditional venture capital money.”

The broker questioned whether insurers are ceding the vanguard of development to outsiders.

“Perhaps the stakes are becoming too high for insurers, especially if they are mostly investing in order to learn how to improve their existing processes,” the report said.