Europe has emerged as the fastest growing InsurTech hub with the number of deals in 2017 increasing by 118%, accounting for one-third of all InsurTech deals globally, according to analysis by Accenture.
The total value of deals in Europe nearly quadrupled in 2017, jumping by 385% to US $679 million, demonstrating an unparalleled InsurTech investment emphasis in an era where traditional and emerging re/insurance hubs are racing for future relevance and dominance.
According to the report, the number of InsurTech deals increased 39% globally in 2017, with the total value of deals up 32%, to $2.3 billion.
While North America still leads in terms of both the total value and number of InsurTech deals, accounting for $1.24 billion, or 46% of deals in 2017, the number of deals there grew by only 6% last year.
The Asia-Pacific region was another fast growing InsurTech hub, with a 169% rise in deal values, to $358 million, with the number of deals rising by 27%.
These statistics suggest that while the U.S. still dominates much of the InsurTech space, Europe and Asia are the key growth regions for the industry with potential to become very significant hubs of the digital revolution.
Perhaps surprisingly in light of Brexit, the UK continues to lead the way as Europe’s InsurTech capital,
with 41 deals in 2017 representing total growth of 117% over the last two years.
Deal values vastly increased in 2017, with $364 million invested in UK-based InsurTechs, up from $19 million the year before.
However, Accenture cautioned that despite the flurry of investment activity and hype surrounding the InsurTech space, consumers won’t experience benefits of technology until insurers rethink their innovation strategy.
“The insurtech industry’s rapid growth reflects investors’ response to consumer appetite for change in an industry sitting on trapped value,” said Roy Jubraj, Accenture’s UK and Ireland Insurance Strategy and Innovation lead.
“At the same time, however, insurers must recognize that insurtech investments alone can’t deliver the levels of change and innovation the industry requires or that its customers expect. The key is having an enterprise-wide innovation strategy that transforms the core business and enables the company to drive growth,” he said.
Michael Costonis, who leads Accenture’s Insurance practice globally, added: “The next step for insurers is to use insurtech as a springboard to innovate across their entire organization. After all, $2.3 billion is a small slice of the pie when you consider that insurance is a $4.2 trillion industry.”
Commenting on how insurance innovation is driving crossovers into other sectors, Costonis said: “Insurers are playing a big role in helping reshape the technology landscape across the industry, making investments beyond wearables and telematics to seize the opportunity that exists within distribution to strengthen the customer experience.
“InsurTech is no longer just a target for private equity and venture capital — it’s a global phenomenon.”
