Investment in the insurtech space continues to grow. Investment in the space was just US$140 million in 2011; by 2018, it had grown to US$4.9 billion. As insurtech continues to expand, it is increasingly important for the industry to stay abreast of key trends, according to a new report from QBE North America and Village Capital.
The Impact InsurTech report pinpoints three themes in insurtech: Insurance for all, society shaping insurance and micro-transformations influencing macro risks. Innovations like process automation, AI and blockchain are making insurance processes more efficient, increasing both the affordability and accessibility of insurance, the report found. Insurtech is also changing the way that real-time and predictive data can be used to promote the development of insurance products that are more responsive to emerging risk.
“Insurance has shaped patterns of economic and social growth since its inception,” said Allie Burns, CEO of Village Capital. “Insurance technologies are fuelling the emergence of affordable, accessible and customisable solutions and enabling consumers, companies and communities to create a more resilient future.”
“These findings unequivocally demonstrate why we need to remain resolute in our devotion to advanced innovation, and QBE was pleased to sponsor this important research,” said Ted Stuckey, managing director of QBE Ventures, the venture capital arm of QBE Insurance Group. “We are committed to fostering the development of industry-changing ideas. Delving deeply into the state of the insurtech space is critical to building a more customer-focused, sustainable industry – which is good for all of us.”
Key findings of the report include:
- 79% of insurance executives said that AI will revolutionise the way their firms produce and deliver products
- 37% to 56% of insurtech start-ups focus on improving distribution, creating new opportunities to cater to underserved markets and contributing to better economic stability across society
- Insurtech is increasing transparency, allowing greater customer engagement and improving consumers’ understanding of how their decisions influence their costs
- The internet-of-things sector is projected to be worth US$1.7 trillion by 2020, and insurers are accordingly ramping up IoT initiatives
- 72% of consumers believe that insurance companies use confusing jargon; however, insurtech products are helping consumers engage with and understand their policies