Category Archives: InsurTech

2017 Magic Ball on Insurance

It’s that time of year when insurance predictions for 2017 are being made, and as we look ahead, it’s clear that these are innovative times for our industry.

First up, Insurance Networking News with 10 Insurance Tech Predictions for 2017, based on a research report by Strategy Meets Action (SMA). Karen Furtado, SMA Partner and co-author of the report explains: “In many cases, the 2017 trends reflect a move by insurers to operationalize strategies that have been in development or early phases in the past couple years.” Predictions include: insurtech remains sizzling hot and 2017 will be pivotal for its future; digital transformation will expand; and telematics starts a new growth phase.

Keeping it hot, next up is The Financial Brand with Top 5 InsurTech Trends for 2017. Check out #1 Micro-Insurance to Handle Usage-Based Needs which highlights the growth of micro-policies covering specific risks for specific durations of time. At #3 Emergence of Blockchain as a Key Driver says smart contracts are emerging as the ideal way to automate claims management and underwriting creating billions of dollars in savings. It tips the B3i partnership between Aegon, Allianz, Munich Re, Swiss Re and Zurich as one to watch in 2017.

Talking of specifics, there’s Fast Company with 5 Fintech Startups To Watch in 2017 and pay-per-mile auto insurer Metromile headlines the list. “Insurance investors say Metromile has become an important proof point for the industry’s hottest topic: Measuring observable behavior in order to get more granular about risk.” Fast Company describes insurance is a “massive opportunity” in fintech in the year ahead.

And as we ring in 2017, CB Insights takes stock with a look back at some of the most notable partnerships, hires and financing rounds in insurance tech in the past year. Of particular note are the 29 startup-insurer partnerships in 2016, a reflection of insurers’ growing participation in the tech startup landscape. Insurance Information Institute’s Insuring California blog writes more on this here.

InsurTech: Outlook Positive

Investors are expected to become more confident in the FinTech sector, including InsurTech startups, as fallout from the Brexit vote in the United Kingdom and uncertainties associated with the U.S. Presidential election stabilize.

A quarterly report from KPMG and CB Insights says that while many investors in Europe and North America took a break from deploying capital in the third quarter of 2016, fintech investment is expected to regain momentum in the fourth quarter of the year and into 2017.

In the third quarter of 2016, venture capital-backed fintech companies raised $2.4 billion across 178 deals, accounting for 83 percent of the $2.9 billion in overall global fintech funding.

Both the number of deals and value of investments were lower than in the second quarter of the year, and when compared to the third quarter of 2015.

Still, the outlook is positive, with InsurTech and other sectors flagged for growth, the report said.

“Over the next few quarters, artificial intelligence is expected to gain more investor attention in addition to RegTech, InsurTech and data and analytics.

At the same time, fintech areas that have emerged over the past year (particularly blockchain) may receive more scrutiny as investors assess when and if investments will deliver returns.”

(RegTech refers to technologies that reduce the cost of regulatory compliance and improve risk outcomes for financial institutions.)

InsurTech VC-backed global investment activity totaled $204 million across 22 deals in the third quarter of 2016, KPMG and CB Insights noted.

The U.S. led the way with 10 InsurTech deals and $104.7 million in investment activity, followed by Germany with 4 deals and $47.2 million in investment.

The top InsurTech deals in the third quarter were pay-per-mile auto insurer Metromile ($50 million in funding), cybersecurity analytics services provider Cyence ($40 million in funding) and insurance brokerage app FinanceFox ($28 million in funding).

Year-to-date some $10.3 billion has been deployed globally across 612 fintech deals through the first three quarters of 2016, according to the report.

Read about the top InsurTech deals of the year as reported by Insurance Networking News here.

More stories on InsurTech over at the I.I.I. Insuring California blog here.