Insuretech investments hit record heights
Insuretech raised £1.6bn in funding during 2017, a 36% increase on its 2016 figure of £1.2m.
The final quarter set new benchmarks with 35 technology investments, more than ever before in a single quarter.
According to Insurance Times, more than two thirds (65%) of insurtech investment was in companies improving the value chain or efficiency within the investor’s key functions. These included underwriting, claims and product delivery.
Rafal Walkiewicz, chief executive of Willis Towers Watson Securities (WTW), said, ‘Incumbents sent a clear message to potential disruptive outsiders: by investing heavily in start-ups and technology, (re)insurance companies appear to have assumed a semblance of control over the insurtech revolution. During the year, conversations about disruption of the existing value chain evolved towards an efficiency-driven search for incremental innovation. However, technology revolutions rarely result in redistribution of power among incumbents. It can be argued that incumbents’ collective response to insurtech hype has diminished their ability to recognise true disruption.”
Alice Underwood, global head of insurance consulting and technology, WTW, added, ‘(Re)insurers are evaluating the cost associated with early adoption of new technology; this investment can yield great reputational and financial benefits if handled well, but companies that position themselves as fast followers can reap a fair amount of benefit with relatively less risk. However, companies that wait too long may find they can’t make up lost ground once anti-selection and other competitive pressures set in.’