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Value of InsurTech deals up by 155% in Q4: Willis Towers Watson

25th February 2019 - Author: Luke Gallin

Global insurance and reinsurance broker, Willis Towers Watson, has said that the number of InsurTech deals announced globally in Q4 2018 increased by 24% to 63, with a total value of $1.59 billion, which is growth of 155% on the same period in 2017.

insurtechThis is according to the broker’s Quarterly InsurTech Briefing, which states that the total, including all-stage investments in P&C and L&H ventures, is the second-highest ever after the record second-quarter of 2015.

After rising for some years and reaching its peak in the second-quarter of 2018, the number of strategic InsurTech investments by insurers and reinsurers had declined by 6%, although funding increased significantly.

The broker’s latest report notes that 11 insurance-sector investors dedicated $218 million into InsurTechs in Q4 2018, which is growth of 230% from the third-quarter of 2018. This shows that the majority of InsurTech investments is still coming from outside the insurance industry.

Willis Towers Watson notes that currently, the global industry maintains 31 strategic partnerships with tech companies, which is the highest ever recorded.

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Global Head of InsurTech at Willis Re, Dr. Andrew Johnston, said: “Cyber is a multifaceted, ever-evolving phenomenon. The appropriate response to this is to task our industry with an equally multifaceted approach. Rather than trying to specialise and excel in each tenet required, InsurTechs offer our industry a huge opportunity through strategic commercial partnering to allow incumbent insurance firms the ability to become part of a broader, more resilient jigsaw puzzle.”

The broker’s most recent quarterly InsurTech brief has a focus on new and sophisticated industry tools that are designed to help manage the growing cyber risk issue. The report includes case studies of numerous InsurTechs, including Cyence, Corax, Paladin Cyber, Zeguro, and Refirm labs.

Global Head of Cyber at Willis Re, Mark Synnott, added: “There’s a healthy ecosystem of InsurTechs, insurers, reinsurers, and brokers working to quantify and price individual and portfolio cyber risk under affirmative coverage. More work needs to be done to address silent cyber, since potential accumulation exposure is enormous, but it is under way.

“For example, we have a module in our PRISM-Re cyber model that assesses exposure to silent cyber and several InsurTechs have developed software that deploys policy-analysis algorithms that help insurers expose and quantify silent cyber coverage. As the cyber threat grows, such tools will become increasingly valuable and commonplace.”

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