Willis Towers Watson’s (WTW) Quarterly InsurTech Briefing revealed that insurtech firms around the world had raised US$1.56 billion during the second quarter of 2020 – a considerable leap compared to Q1 of 2020, when the Covid-19 economic fallout effected an investment slowdown for the industry. And, globally, the investment in insurtech firms has risen by 71 per cent since Q1 of 2020 (when the industry took a hit due to Covid-19).
“For (re)insurance, (re)insurance firms and their staffs, (re)insurance markets, investable markets in general and individual insurtech vendors/start-ups, most ‘best-laid plans’ for 2020 have probably been put on hold (or scrapped altogether),” the briefing reads. “And yet, as the world around us seems unfamiliar and strange, perversely from a technological perspective at least, we are achieving the goals that we have been opining on for decades at a lightning-quick pace. We have gone ‘digital’.”
WTW explains that property and casualty (P&C) deals continued to comprise the bulk of funding in Q2, representing 68 per cent of dollars invested this quarter. In addition, life and health (L&H) funding into startups grew 32 per cent in Q2, up 17 percentage points, amidst the possible rush to get life insurance coverage and the movement toward telehealth brought on by Covid-19, WTW says.
WTW added that the initial public offering of Lemonade and the acquisition of two incumbent insurance companies by insurtechs, Hippo and Buckle were particularly notable during Q2.
“Businesses in our industry are now either fully floating on the digital rafts they have been inflating for years, or digitising increasingly and relying more and more on remote systems (increasingly cloud-based) that can support electronic quoting, policy binding and issuance, and claims paying technology, to name but a few functions. It may be trivial to state, but now more than ever there seems to be so much truth in the expression ‘necessity is the mother of all invention’,” the briefing stated. “If a (re)insurer is still unable to digitally/remotely procure business, quote business, distribute product and service a living policy up until the contract ends or a claim is made, then it is leaving itself vulnerable to obsolescence.”
Read WTW’s report in full here.