1. Market Research
  2. > Financial Services
  3. > Banking
  4. > Bank Lending Market Trends

InsurTech Start-up Landscape

  • November 2016
  • 27 pages
  • Timetric
Report ID: 2117016

Summary

Table of Contents

Search Inside

Synopsis
Insurtech start-ups are emerging as the insurance industry is waking up to the technological advancements customers have come to expect from other industries. The banking sector has been transformed and disrupted greatly by financial technology (fintech), but insurance technology (insurtech) remains a long way behind and a very different proposition, despite recent progress.

Funding to insurtech start-ups surpassed US$1.0 billion halfway through 2016, highlighting the progress made. However, substantial improvements remain essential in basic areas such as mobile websites and apps, while more innovative areas such as blockchain and the Internet of things (IoT) have the capacity to revolutionize the industry.

The vast majority of insurance start-ups are looking to partner with current insurers, as opposed to challenging them. Areas such as customer engagement – particularly improving processes and platforms, increasing efficiency and reducing administration costs – or helping with regulation are the main areas where start-ups are having success.
Looking to challenge the incumbents is extremely difficult, predominantly due to the capital required to underwrite insurance. The most successful start-ups have been identifying insurers’ weaknesses, and working alongside them to make improvements.

Technology investment is a major priority for global insurers, Axa, Allianz, Munich Re and Swiss Re have established their own capital venture funds, with a ringfenced budget to invest in new technologies and start-ups. There have been over 80 separate investments in start-ups already as of July 2016, with the year on course to finish with a 42% increase in the number of deals compared to 2015.

Partnering with insurtech start-ups is ideal for large companies which do not have to take on the risk of development. It is also easier for an incumbent to drop a start-up after outsourcing if it does not work out, or if regulations change, than to get rid of a whole department. These companies often struggle with creating the right atmosphere for true innovation, largely due to in-built processes and a reluctance to tolerate failure.

Almost all start-up activity is occurring in the non-life sector, and particularly in motor, home and health insurance. The life market is not exactly primed for innovation, with huge capital requirements, very little customer engagement and heavy regulation, although quantified self is an area to watch.

Non-life, on the other hand, is a much more active segment, with the increased use of data, in particular, starting to have an impact in terms of both tailored policies and even preventative measures. The switch from insurance companies offering financial cover following a claim, to a valuable service, that customers interact with regularly and benefit from greatly, is already happening to an extent, but is set to become mainstream. Examples include telematics as a way to reward good driving, while both health wearables and connected homes look to identify problems before they occur.


Summary
Globally, start-ups received US$1.8 billion in funding in the 12 months to June 2016 – down 20.97% on the previous year – although there were 150 deals in that period, which represented a 44.2% rise on the year before.

The substantially more deals being done in the last year and less overall funds being raised is due to an increase in angel investments and early-stage deals, with 48% of deals last year being angel investments. This is because Axa, Allianz, Munich Re, and Swiss Re have established capital venture funds; usually with a budget of around US$100 million to look into investing in innovation and start-ups.

Zhong An, China’s first digital insurer and its best-funded InsurTech startup to date, received US$931 million in 2015, which represented a considerable percentage of the total for that period.

Scope
The vast majority of insurance start-ups are seeking to enable insurers, not disrupt them.

The industry is very difficult to break into due to competition at an underwriting level, the amount of funds needed and the level of regulation. This means that most insurtech start-ups are targeting the consumer engagement side of the business – improving the processes or helping with regulation and therefore aiming to partner with incumbent insurers.

Motor, health and home insurance are the main areas where innovation has thrived, and relative success has been seen in the use of wearable Fitbits, telematics and connected homes. All three are at relatively early stages of development, but have already seen strong consumer engagement, which is set to increase substantially over the next five years.

Reasons To Buy
Primary research, with interviews with people heavily involved in insurance start-ups, including founders and mentors
Breaks the market down by technology, such as big data, peer-to-peer etc., discusses trends, gives examples and insight from relevant primary research
Further break downs into life, non-life and health start-ups
Extensive coverage and analysis of the biggest deals and partnerships around the world in 2016
Insight into upcoming regulation and how it may impact the market
Use of exclusive data from Timetric’s survey on the future of technology in insurance


Key Highlights
- Start-ups in insurance have only really been a force in the last few years, and certainly after fintech was well-established.

- Unlike fintech, which offers a direct challenge to the banks ans financial institutions, insurtech start-ups have generally been looking to work with insurers and improve their weakest areas.

- The non-life lines, motor and property in particular, are well ahead of other lines of insurance, in terms of both use of technology and start-up penetration.

- The incumbent insurers are becoming more and more keen to work with start-ups, with several substantial deals being completed globally over the past couple of years.

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 60 Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

Ahmad helps you find the right report:

Testimonials

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at
Ikea

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at
Ingredion

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

Purchase Reports From Reputable Market Research Publishers

Signature Group Holdings Inc (RELY:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry

  • $ 1995
  • Industry report
  • July 2017
  • by Plunkett Research

Signature Group Holdings Inc (RELY:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry Key Findings: - Unique new report provides deep financial ...

THL Credit Inc (TCRD:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry

  • $ 1995
  • Industry report
  • July 2017
  • by Plunkett Research

THL Credit Inc (TCRD:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry Key Findings: - Unique new report provides deep financial benchmarks ...

Atlanticus Holdings Corp (ATLC:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry

  • $ 1995
  • Industry report
  • July 2017
  • by Plunkett Research

Atlanticus Holdings Corp (ATLC:NAS): Analytics, Extensive Financial Metrics, and Benchmarks Against Averages and Top Companies Within its Industry Key Findings: - Unique new report provides deep financial ...


Download Unlimited Documents from Trusted Public Sources

Bank Lending Industry - Forecast

  • August 2017
    7 pages
  • Bank Lending  

  • United States  

    Saudi Arabia  

    Qatar  

View report >

Bank Lending Markets

  • August 2017
  • Bank Lending  

View report >

Auto Financing Industry in Mexico, Monthly Update

  • August 2017
    5 pages
  • Auto Financing  

    Bank Lending  

    Retail Banking  

  • Mexico  

    North America  

View report >

Bank Lending Industry

10 days ago

Related Market Segments :

Mortgage
Banking

ref:plp2016

Reportlinker.com © Copyright 2017. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.