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InsurTech investments break records in Q1 2019: Willis Towers Watson

9th May 2019 - Author: Luke Gallin

For the third consecutive quarter, InsurTech funding surpassed the $1 billion mark in the opening three months of 2019, with 85 deals recorded with a total value of $1.42 billion, according to the latest quarterly InsurTech Briefing from insurance and reinsurance broker, Willis Towers Watson (WTW).

willis towers watsonWhen compared with the fourth-quarter of 2018, the deal count increased by 35%, while total funding actually fell by 11%.

However, WTW notes that during Q1 2019 InsurTech investors across the world executed the highest number of transactions, the highest number of property/casualty transactions, and the highest volume of Series B and Series C funding rounds.

Of the 85 deals recorded in the period, around 54% were outside the U.S., which is a continuation of more recent trends. In the UK, the number of deals increased by 50%, while the U.S. deal count improved by 44%. At the same time, deal count in China declined by 38% in the first-quarter of 2019.

Around 66% of investments made in the quarter were in Seed and Series A rounds, although Q1 2019 did produce the highest ever numbers of Series B and C investment rounds, at 12 and 6, respectively, explains WTW.

The number of P&C transactions increased by 37% on the fourth-quarter of 2018, to a huge 56.

“Agile pricing systems inherently recognize that flexibility is needed to meet the unknown future. Adopting a more agile approach requires companies to put control of pricing and price changes back into the hands of underwriting teams. The emphasis should be on their ability to change prices and rate algorithms frequently and easily, allowing companies to make rapid adjustments in an ever-moving market,” said Neil Chapman, Global Product Leader for Pricing, Product, Claims and Underwriting, Insurance Consulting and Technology, WTW.

As global insurers and reinsurers strive for increased efficiency and lower costs, the InsurTech community continues to evolve and advance rapidly, a trend that appears unlikely to reverse anytime soon.

WTW’s most recent InsurTech Briefing has a focus on pricing and underwriting, providing case studies of the InsurTech HazardHub.

Dr. Andrew Johnston, Global Head of InsurTech at WTW’s reinsurance arm, Willis Re, said: “The sheer volume of hopeful InsurTech companies and hype is becoming increasingly difficult to rationalize, and one could argue that much of the space is akin to the fable of the emperor’s new clothes. We are seeing, however, that a number of InsurTechs are already adding some genuine value to our industry. We remain pragmatic about where in the value chain we believe this can be achieved.

“Our quarterly InsurTech reports for 2019 will focus on the four major functional areas of insurance, exploring the activities required to make each work, and how technology could be applied to improve those processes. We continue to believe that success for any InsurTech must follow that bottom-up approach, rather than targeting reinvention from the top down.”

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