Insurtech funding surges in 2018 third quarter: Willis Towers WatsonPosted On: Dec. 20, 2018 11:44 AM CST
Funding for technology in the insurance industry during the 2018 third quarter rose — although the volume of deals dropped — as $1.26 billion of insurtech funding was placed in 57 reported transactions, Willis Towers Watson PLC said Thursday.
The amount is more than double the $579 million from this year’s second quarter despite a 20% decline from 71 deals reported, the broker said in its quarterly tech review.
Compared with third quarter 2017, funding volume increased by 303% from just $312 million while the deal count increased by 19% from 48, the report said.
Data showed that the third quarter of 2018 saw eight transactions over $40 million, compared with six in the entire first half of 2018, Willis Towers Watson said.
The United States saw 47% of the 57 third-quarter deals while the U.K. hosted 18% and China 9%, data showed.
The report also featured an examination of the potential for growth among parametric insurance products — event-based coverage tied to a measurement or index.
“From weather-based crop insurance, to micro-life insurance products, any parametric insurance product pre-defines a single source of information (e.g., a specific weather index) and a threshold-based trigger (e.g., earthquake reached a magnitude above 6.5) to activate a process that executes an insurance policy,” Magdalena Ramada, director and senior economist for Willis Towers Watson, said in the report.
Technology may enhance and/or enable the further development of parametric insurance coverage, she added.
“Data from drones, satellites, smart devices and wearables can deliver automation in many parametric insurance products. They can further help to improve the efficiency and pricing accuracy of indemnity-based insurance. They can increase the pool of insurable people and enable pricing and products that adapt with people and businesses’ needs and behavior,” she said.