There were 63 InsurTech investment deals worth nearly $1.6 billion in the 2018 fourth quarter, according to a new Willis Towers Watson report.
That’s a 24 percent jump in deal count compared to the 2017 fourth quarter, and funding volume grew by 155 percent year-over-year. The report attributes the growth, in part, to an increasing focus on developing tools to manage cyber risk, as well as a bigger drive for partnerships that help boost technology prowess.
“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 specialize 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,” Dr. Andrew Johnston, global head of InsurTech at Willis Re, said in prepared remarks.
According to the report, which covers property/casualty and life/health venture investments:
- The 63 transactions in Q4 2018 were higher than in Q3 but lower than the first two 2018 quarters.
- Seed and Series A investments account for 64 percent of the total deals since 2012 and 62 percent this quarter, up 4 percent since Q3. But 45 percent of financings in 2018 took place at the Series A, B or C rounds. Willis Towers Watson said that this could point to consolidation ahead.
- P/C InsurTech funding volume jumped 89 percent compared to the 2017 fourth quarter and 57 percent versus Q3 2018.
- There were 41 P/C transactions in Q4 compared to 40 in Q3. The number is 52 percent higher, however, than the same period a year ago.
- There were 31 strategic partnerships between insurers/reinsurers and InsurTech companies in the quarter, rivaling Q3, which itself is a highpoint, the report said. Among the partnerships: Munich Re linked with Fraugster, an AI-based fraud detection product, and AXA XL partnered with Parsyl, a supply chain data platform providing enhanced marine risk prevention insights.
The full report is Willis Towers Watson’s “Quarterly InsurTech Briefing” for Q4 2018.
Source: Willis Towers Watson