The UK’s insurtech sector has emerged as a dominant force in the global market, boasting an impressive total enterprise value of approximately $21 billion, according to recent estimates by management consulting firm McKinsey & Company.
Despite trailing behind the US and China in total enterprise value, where the insurtech giants stand at approximately $100 billion and $28 billion, respectively, the UK’s insurtech industry has distinguished itself in a unique way.
Adjusting for the size of its population, the UK’s insurtech sector has rapidly evolved into a global leader, showcasing its prowess with the highest concentration of insurtech firms among major economies
Since the early 2000s, when the UK witnessed the birth of its first major insurance comparison website, the insurtech sector has flourished. Now, the country boasts around 280 operational insurtech firms, securing a substantial 10 percent market share of the estimated 3,000 insurtech firms worldwide. Only the US, with approximately 1,300 firms, surpasses the UK’s insurtech cluster, making it the second-largest in the world.
The UK’s insurtech firms have experienced impressive growth, with a combined revenue reaching £2 billion to £3 billion in 2022. This represents a remarkable sixfold increase from 2015 estimates, underscoring the sector’s rapid expansion.
Additionally, these companies have played a significant role in job creation, employing an estimated 14,000 individuals across the nation, amounting to about 4 percent of total employment in the UK’s insurance industry. Furthermore, the sector indirectly supports an additional 23,000 jobs through supply chain connections and consumer spending of its employees.
At the forefront of this insurtech revolution is London, which boasts the highest number of insurtechs per capita among major world economies. The city is home to five insurtech unicorns, making it a prominent player in the global insurtech landscape. Surprisingly, this figure equals the total number of insurtech unicorns found throughout the rest of Europe.
Though London remains a pivotal hub for insurtech, the industry’s reach extends beyond the capital city. Insurtechs have emerged in various regions and nations across the United Kingdom, with two-thirds of the workforce located outside London, attributed to the growing trend of hybrid work.
The emergence of thriving clusters in the northwest and south of England, along with a dynamic insurtech industry in Wales, focused on price-comparison websites and insurers like Confused.com and Admiral Group, highlights the sector’s widespread impact on the nation’s economic landscape.
With a booming insurtech sector and a supportive regulatory environment, the UK is poised to continue its dominance as a global leader in insurtech innovation. As the industry matures, experts predict that UK-based insurtechs could potentially rival even the largest players in the US and China, making it an exciting and transformative time for the country’s insurance technology sector.
