InsurTech Investment Robust Second Quarter with Slow Evolution

InsurTech investment worldwide continued at high levels during the second quarter of 2019, according to Willis Towers Watson, marking the fourth consecutive quarter during which total new funding commitments exceeded $1.2 billion.

Sixty-nine deals with a total value of $1.41 billion were announced in Q2 2019. The value of investments in property-casualty-focused firms rose by 283 percent compared to Q2 2018. The number of strategic investments by (re)insurers hit a record high of 36.

The continued predominance of later-stage, typically larger investments pushed down overall transaction volume by more than a fifth as the number of early-stage investments dipped to its lowest point since Q3 2017, indicating increased maturity in the InsurTech sector.

Seed and Series A funding into global InsurTech start-ups attracted $147 million in Q2.

Dr. Andrew Johnston, global head of InsurTech at Willis Re, said, "Technology as a strategic vertical is now commonplace in nearly every single insurer and reinsurer across the globe, but the technology from the incoming InsurTech pastures may not be quite as green or as impacting as many incumbents had hoped—or at least anticipated. Whilst we remain resolute in our position about the value created by some InsurTechs, we are also maintaining our position of realistic pragmatism."

Ben Nicholls, global leader of Willis Re's alternative distribution operations, added, "There is no reason why commercial insurance sectors around the world, across most classes of business, cannot be supported more ubiquitously by readier access to appropriate quote, bind, issue platforms. But only a few specialty insurers have begun to use technologically sound systems extensively. The evolution is relatively slow, but we are now meeting a number of InsurTech businesses that seem genuinely to have cracked it."