Japanese technology & telecoms investor & conglomerate SoftBank will continue to target tie-ups with unspecified reinsurance players in order to accelerate digital upheaval in the re/insurance industry, David Thevenon, a dealmaker at SoftBank’s Vision Fund, has told Reuters.
In May, SoftBank’s efforts to take as much as a 25% stake in global reinsurance group Swiss Re broke down with no agreement reached, but Thevenon said that the company plans to continue to explore potential partnerships with other large re/insurers.
Reuters quoted Thevenon as saying: “We have talked to big insurance groups to figure out where we can play, what might be interesting. There are several similar combinations and permutations about a bet we could place.”
SoftBank also recently made an investment in ZhongAn, China’s largest online insurer, and has struck deals over the past year with PolicyBazaar, an online insurance distributor in India, and Lemonade, an app-based U.S home insurer.
“We believe that technology and how data is used, processed and collected is going to transform insurance,” Thevenon told Reuters.
He added that SoftBank’s Vision Fund plans to channel much more money into the insurance sector, which it views as ready for disruption and as a way to support its other investments in cars, health and financial services.
The company’s re/insurance investments total nearly $3 billion so far, but the Vision Fund has now raised nearly $100 billion, almost half of which comes from Saudi Arabia’s sovereign wealth fund, according to Reuters.
SoftBank also believes that investments in InsurTech start-ups may complement other companies in its portfolio, such as transport firm Uber and office sharing firm WeWork, the publication said.
“We are going to have to place several bets,” Thevenon explained. “The nice thing about insurance is that this is so big, it’s not exactly a market where you make one investment and you suddenly have 90 percent market share.”
A recent Jupiter report claimed that InsurTech will represent just under 10% of the global insurance market by 2023, or more than $400 billion in premiums.
SoftBank has led three of the ten largest investments in new digital firms over the past year and half of the dozen largest insurance investments in the year to June, according to Willis Towers Watson and CB Insights.