First, the growth of investment players, which rose from 53 in 2012 to 217 in 2017, four times, 30% annual growth.
Since 2012, more than 700 insurtech investments worth nearly $9 billion in committed capital have been monitored from a transaction tally.
The report divided investors into three main categories: traditional venture capital, re-insurance venture capital and corporate venture capital.
Traditional venture capitalists are stand-alone companies, with a focus on seed and early-stage trading, and are the first to be attracted by the fintech/insurtech sector. These companies are typically interested in providing financial returns to investors.
The other two groups are joined since the investment generally represents a strategic value.
The development of re-insurance venture capital is a recent trend. The main driver of this category is not financial performance, rather to create strategic value through the development of a direct investment plan to exploit the potential of new technologies and skills.
There are also a number of corporate venture capital not native to the insurance industry, but nevertheless increasingly involved in insurtech investments. These companies are mainly large technology or financial ones considering opportunities in the insurance industry not yet transformed by new technologies.
In the infographic below there is a chart of the most dynamic venture capitals worldwide, divided into the above categories.
How do these companies select their investments?
Willis Re’s report analyzed this issue through a survey carried out on about 100 VC, according to which the main drivers behind investments in a startup are:
– Business model scalability
– Solution capability to solve far-reaching and challenging issues
– Cutting-edge product, ready to use
– Technologies creating new product areas
– Technologies accelerating digital transformation
– Market fit, market size and the appropriate founder team
– Strategic advantages for the investment fund
– Reliability, user-friendliness and market accessibility
– Technologies to improve insurance underwriting and claims management
– A visionary team with a scalable idea and execution capability
Independent venture capital is considered the most effective at the moment, Sequoia, Softbank, Plug and Play, Andreessen Horowitz and Kleiner Perkins are the most mentioned ones; however, in the long run corporate venture capital (Allianz, Munich Re, XL Innovate, American Family) are considered to prevail..
Full report here.
La tua opinione è importante per noi!