2019 InsurTech Investment Achieves All-Time High

Businessman holding hands out with globe, technology and "map" of network

February 04, 2020 |

Businessman holding hands out with globe, technology and "map" of network

Total new worldwide funding commitments to the InsurTech sector in 2019 were $6.37 billion, 33.9 percent of the historical total, following a record-breaking $1.99 billion of investment in 75 projects during Q4 2019, according to Willis Towers Watson.

During the year, eight "unicorn making" rounds of investment took place, creating five new unicorns (privately held start-ups valued at over $1 billion); only 10 InsurTechs globally that have reached this threshold. 2019 also saw a 90 percent jump in investment rounds that exceeded $40 million.

Property-casualty (P&C) start-ups continued to take a greater share of total InsurTech investment than their life and health counterparts, continuing a trend seen since Q3 2016. Early-stage funding to P&C companies grew to 69 percent, up slightly compared with Q3 2019. Distribution- and managing-general-agent-focused InsurTechs accounted for 57 percent of all deals by number.

Dr. Andrew Johnston, global head of InsurTech at Willis Re, said, "2019 was the year when individual InsurTechs began to come to the fore to lead in specific parts of the market, whether in certain lines of business or in the use of particular technologies. For example, UK-based Concirrus is now clearly the forerunner in behavioral-based analytics for the specialty markets. But while InsurTech news is awash with the huge valuations and postulations of the art of the possible, there is also a very real story that is not so positive―individual InsurTech cessations. The number is very difficult to calculate, but our data indicate that during the past 3 years, approximately 184 funded InsurTechs might have closed their doors."

Commenting on the implementation of technology in insurance for end-to-end claims technologies, Tom Helm, head of claims consulting at Willis Towers Watson's insurance consulting and technology business, said, "Although the very simplest common claims, such as automobile windscreen, may already be handled entirely by automated systems at some insurers, end-to-end automation can never work in all scenarios, even in consumer lines. Some aspects of the claims process require complex human judgment or investigation, and other cases, such as the need to empathize with a customer who needs support, demand the human touch. This means that claims handlers will remain in the driving seat. It is essential that automated mechanisms are able to identify when a situation needs human intervention, making effective management of the interaction between handler and machine a critical consideration."

February 04, 2020