The investments in the InsurTech space took a huge growth leap in terms of investments in 2015 with more than 100 deals signed by InsurTech providers. It reached investments of more than $2.5 billion in 2015. Zhong An received huge investment in 2015. In 2016, the investment volume reduced however the number of deals increased significantly. While 2015 witnessed the launch of nearly 300 InsurTech companies, which reduced in 2016.
US companies: The US companies are showing strong growth in investments while the Chinese companies witnessed less investments after the peak investment in 2015. Oscar, an insurance provider raised $400 million in a round of investments from Fidelity Investments. Few other companies raised funds worth than $100 million in recent past.
M&A of Insurance providers: In 2018 – 2019, the deals are poised to grow substantially with more M&A activities from the traditional insurance providers. Online insurance is growing rapidly in terms of innovation and investments are expected to pour in for InsurTech providers. Enhancing the geographical reach of insurance players. Most of the leading insurance providers are enriching their product portfolio to retain their old customers and gain new customers.
FinTech is witnessing major transformation from the adoption of digital technologies, with investments and acquisitions expected to shape the insurance industry in the near future. The health insurance among all other insurance segments is expected to witness major transformation in terms of premium, claims, and broker distribution. While the major focus of InsurTech companies continues to be the retail sector, the commercial sector is also expected to witness growth with more innovative offerings from insurance providers. Around 45% pf the InsurTech are focussed on property and casualty, 35% in health, and remaining on life insurances. The InsurTech companies are constantly disrupting the value chain of traditional insurance provision for clients. The InsurTech companies are focusing increasing the top-line as well as bottom-line growth for insurance providers with enhanced customer experience, increase up-selling, and enhance cross-selling. It also reduces the loss-ratio, decrease capital risk, and reduce administrative costs and thus proving to be favourite spot for investment for financial service providers.
– Swarup Bhowal,
Research Analyst – ICT,