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InsurTech, investment peak in the first quarter of 2019

For the third quarter in a row, Willis Towers Watson reports InsurTech is getting over $1 billion in funding. Growth is higher in Europe, while China is falling

10 Jun 2019

In addition to the 5G, 2019 is also the InsurTech year: according to the report of the advisory firm Willis Towers Watson, in the first quarter investors completed the highest number of transactions, especially in the non-life sector, and the highest number of financing rounds of B and C series ever recorded. As to financing, in the first quarter of the year as many as 85 transactions were reported, for a total value of $1.42 billion globally: for the third consecutive quarter, therefore, the InsurTech sector obtains financing for more than $1 billion. 

According to the report, although the value of each loan dropped by 11% compared to the fourth quarter 2018, the number of transactions increased by 35%. And the growth was mainly recorded outside the United States, where about 54% of the total financing was completed, thus confirming a trend already in progress for several months. However, while in Great Britain, despite the Brexit risk, funding grew by 50% (compared to +44% in the U.S.), China, whose economy is slowing down after years of busting, has recorded a disappointing -38%. 

The report also points out that, at international level, 2/3 of investments came from seed and A series financing; 2019 also recorded the highest number of B and C series investment rounds, 12 and 6 respectively (compared to 9 and 3 in the previous quarter), a further proof that more and more InsurTech companies are now growing and approaching maturity. 

Andrew Johnston, Global Head InsurTech of the reinsurance broker Willis Re, is holding back easy enthusiasm, however: “The eagerness and growing volume for talented InsurTech companies are becoming increasingly difficult to rationalize, and some might argue that many of these are actually like the emperor’s new clothes (in the fairy tale the emperor is naked but his servants pretend he is dressed not to oppose him). However, a number of InsurTech’s are already adding real value to our industry: our approach is still pragmatic in analysing where, in the value chain, this worth can be achieved”. 

According to Neil Chapman, Global Product Leader for Pricing, Product, Claims and Underwriting, Insurance Consulting and Technology at Willis Towers Watson, “to move into a future that is still unknown, flexibility is needed. A more adaptive approach requires companies to put price control back within the underwriting teams. Emphasis should be placed on their ability to modify prices and evaluate algorithms frequently and easily, allowing companies to make fast adjustments in an ever evolving market. 

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