With all the options that InsurTechs have these days to raise money and build prestige, partnerships can offer an efficient way to do both. But they’re not without their own risks.

“Partnerships are about many things, and some [of that] is brand. Especially if you’re a new InsurTech. Having some big brand like Progressive behind you is a great thing for you,” Kat Utecht, co-managing partner at Core Innovation, noted during a panel discussion on May 12. “That’s a lot of the reasons why these partnerships work so well.”

Panelist Matteo Carbone, founder and director of the IoT Insurance Observatory, said he sees partnerships as having potential, but noted they require a lot of commitment and don’t always work.

“The collection of brands of partners is not so good in the long term,” Carbone said. “I’ve seen players running and signing a new client and not working in making this client [or incumbent partner] more successful.”

Partnerships work, Carbone said, with a long-term commitment to working on the details.

Matteo Carbone

Partnerships “are not only to sell, but you need to consult, you need to co-create the solutions,” Carbone said. “This is what lasts over time, and this is what over time makes revenues, because at the end, the contract is a framework.”

Utecht and Carbone spoke on the “InsurTech Survival Tools” panel as part of Carrier Management’s InsurTech Summit 2021. The panel focused on other financial survival tools available to InsurTech startups as they navigate their growth and development. Click this link to check out the full panel discussion or other Summit events. Below is a summary of their thoughts on some other major InsurTech financial tools.

Venture Capital

Utecht said that venture capital interest in the sector “has been wild” and become rather intense.

“There is so much money out there and so many investors that are interested in this as a sector…Specifically if you are doing anything in B2B or if you even say the word ’embedded insurance,’ people just want to throw gobs of money at you,” Utecht said. “Throw in the word ‘API’ (application programming interfaces) and you’re really good.”

Kathleen Utecht

Carbone noted that InsurTech venture capital has reached new global highs [$2.5 billion in Q1 2021 according to a recent Willis Towers Watson report]. He said the cash bonanza has enabled a “a new wave of players” coming from initial employees of the earlier batch of InsurTech startups who are now starting their own ventures.

According to Utecht, this phenomenon should fuel the VC surge for at least a few more years barring a catastrophic event such as the coronavirus pandemic, which dampened venture capital investing during COVID-19’s first few months.

Carbone said he hopes venture capital investment becomes more cautious, focusing on more sustainable concepts over time.


Utecht said the InsurTech IPO trend remains steady, though less robust after 2020 initial public offerings from the likes of Lemonade, Root and others.

“It depends on the company,” Utecht said. “It depends on the very specific niche that [the IPO candidate] is in…I just think you have to be really careful and make sure that you test the market before you just go on out there.”

Carbone said he expects many more IPOs in the InsurTech space, but added he’s hoping for “a little more rationality” before a startup hits the public markets.

“I miss the good old times where a startup began with family and friends’ funding,” Carbone said, after which they gradually build their business, attract investment and only consider an IPO once they reach some level of financial stability.

Asked to display an example of less rationality, Carbone cited an example of an unnamed InsurTech that generated just $400,000 of revenue coming to the public markets valued at more than $1 billion.

Utecht acknowledged these extreme examples but said some of those bigger investment gambles are based on a belief in the technology and the players involved.

“Maybe it’s something about the team or something proprietary that they have, [and] that’s getting people to value it,” Utecht said.


“We’ve seen a very active M&A market, and again you have all of these large [insurance player] incumbents that have a ton of cash,” Utecht observed. She said the practice is gaining traction this year with non-InsurTechs eyeing InsurTech acquisitions to broaden their technology capacity. But also embedded insurance is coming into play, with “great consumer brands” deciding they want to embed insurance into their offerings, potentially buying an InsurTech to make that happen.

“It’s the [broadest] market that we’ve seen of buyers for some of these InsurTechs,” Utecht said.

At the same time, there are lots of combinations between InsurTech players out there that can create value, making M&A an attractive option, Carbone said.

With that in mind, Carbone predicted more mergers between startups in the insurance space that see greater potential together than alone. Combinations can also create greater stability and a broader chance at profitability, he said.

Utecht said B2B and B2C InsurTech mergers have particular potential.


Special purpose acquisition companies, known as SPACs or reverse merger entities, are another way for InsurTechs to hit the public markets, and a number have taken that option in the early months of 2021.

Carbone said this is a good option for companies to raise money after they build up their businesses responsibly. Utecht said the SPACs remain a safer option, create certainty for InsurTechs and other companies that pursue them in terms of options to raise cash.