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There were 85 insurtech deals with a total value of $1.42 billion announced in first-quarter 2019, the third straight quarter to top $1 billion in funding, according to the new Quarterly InsurTech Briefing from Willis Towers Watson PLC.
While the property/casualty sector has seen its share of deals increase, activity continues to move outside the U.S., according to the report data.
Deal count increased by 35% from Q4 2018, although total funding decreased by 11%, the report said.
Property/casualty transactions reached 56, the highest total recorded, and a 37% increase from the property/casualty deal count in fourth-quarter 2018 and up 30% from the year-ago period’s count, the report said.
Property/casualty funding, however, was off 27% from fourth-quarter 2018, but up 160% from first-quarter 2018, the report said.
For the first-quarter 2019, 54% of all insurtech deals took place outside of the U.S, compared with 42% of all insurtech deal activity that took place outside of the U.S in 2016.
“This matches a trend set over the last two years in which an increasing amount of insurtech activity is taking place outside of the U.S.,” the report said.
The first quarter also continued a trend of larger deals, with the first three months seeing a record high of 10 deals over $40 million, a 67% increase from fourth-quarter 2018, the report said.
Of the 21 quarters from first-quarter 2014 to first-quarter 2019, first-quarter 2019 accounts for 15% of all investments of $40 million and over, the report said, and also saw 15 investments of $20 million and over, and 11 investments over $30 million.
“The sheer volume of hopeful InsurTech companies and hype is becoming increasingly difficult to rationalize, and one could argue that much of the space is akin to the fable of the emperor’s new clothes,” Andrew Johnston, global head of insurtech at Willis Re, said in a statement with the report. “We are seeing, however, that a number of InsurTechs are already adding some genuine value to our industry. We remain pragmatic about where in the value chain we believe this can be achieved.”
Insurtech investment increased by 700% in Europe to more than $400 million in the first half from just $50 million a year ago as insurers strive to extend risk management assistance to more customers, Reuters reported. Britain accounted for the biggest rise in insurtech investment, up to $279 million from $9 million in the first half of 2016. In the rest of Europe, investment jumped to $134 million from $37 million, with some insurers also forming partnerships with insurtech firms.