Insurtech transactions reach new peak but volumes fall

A total of 71 Insurtech funding transactions during the second quarter of 2018 marks a record high, according to the new Quarterly InsurTech Briefing from Willis Towers Watson (WTW).

The second quarter has also set a new record for the volume of incumbent participation in insurtech investments.

At the same time the total of $579 million invested is down 20 percent against the prior quarter.

The latest WTW briefing focuses on insurtech for the life & health insurance industry and how the complexity of change occurring within the value chain is much greater than in other insurance subsectors.

New forms of underwriting data are expanding exponentially as a result of advances in the understanding of the human body and the proliferation of wearable sensors that track activity and monitor behaviours, the report says. Insurtech companies are developing tools to harness this data in order to create insightful information that can be used to enhance life & health products. As the ecosystem for data and analytics continues to develop, one potential outcome may be greater convergence between health insurers and life insurers, the report notes.

“While P&C insurers certainly have a chance to develop real time dialogues with their customers, the opportunity hardly compares with that for life & health insurers” said Rafal Walkiewicz, CEO of Willis Towers Watson Securities. “We believe that the eventual winners in the life & health industry will be the ones who shift their attention from primarily offering death benefits, investment support and coverage for protection gaps to offering customers a true partnership to live longer and healthier lives.”

Greg Solomon, head of life & health reinsurance at Willis Re International, added: “The application of insurtech in the life & health sector ranges from the explicit use of new technologies to distribute and underwrite insurance policies, to more indirect usage such as wellness, where technology is deployed simply to make policyholders healthier and happier. But everything overlaps. Innovations are either driven by re/insurers or used by them, or engaged by prospects and policyholders, which affects re/insurers’ experiences. The change will be profound, but many incumbent carriers have some way to travel yet.”

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