Total new InsurTech funding commitments exceeded $1.2 billion for the fourth consecutive quarter in Q2 2019, as 69 deals with a total value of $1.41 billion were announced in the period, according to insurance and reinsurance broker, Willis Towers Watson (WTW).
The broker’s latest quarterly InsurTech report highlights a buoyant investment landscape, driven by growth in both property and casualty (P&C) and life and health (L&H) deals.
Investments in P&C-focused companies increased by a huge 283% when compared with the same period in 2018, while the value of investments in L&H firms increased by 259% in the quarter. Furthermore, at 36, the number of strategic investments by re/insurers reached a new high.
Dr. Andrew Johnston, Global Head of InsurTech at the firm’s reinsurance arm, Willis Re, said: “Technology as a strategic vertical is now commonplace in nearly every single insurer and reinsurer across the globe, but the technology from the incoming InsurTech pastures may not be quite as green or as impacting as many incumbents had hoped – or at least anticipated.
“Whilst we remain resolute in our position about the value created by some InsurTechs, we are also maintaining our position of realistic pragmatism.”
WTW’s report reveals that later-stage, typically larger investments continued to dominate InsurTech deals in the period, which in turn pushed down overall transaction volume by more than 20%, with the volume of early-stage investments falling to its lowest level since the third-quarter of 2017. WTW states that this is a reflection of increased maturity in the InsurTech sector.
Seed and Series A funding into global InsurTech startups totalled $147 million in Q2 2019, and of that figure, 59% of targeted ventures had a focus on distribution. WTW notes that 54% was invested in InsurTech firms outside of the U.S. or UK.
Global Leader of Willis Re’s Alternative Distribution Operations, Ben Nicholls, said: “There is no reason why commercial insurance sectors around the world, across most classes of business, cannot be supported more ubiquitously by readier access to appropriate Quote, Bind, Issue platforms. But only a few speciality insurers have begun to use technologically sound systems extensively.
“The evolution is relatively slow, but we are now meeting a number of InsurTech businesses that seem genuinely to have cracked it.”