Insurance technology

Insurance technology, popularly called InsurTech., is the subset of financial technology (FinTech) that concerns the insurance industry. Specifically, it refers to the automation of processes and operations of insurance business, aiming to improve efficiency and effectiveness of the insurance business.

Growth

Investment in so-called InsurTech rose from $800m in 2014 to more than $2.6bn in 2015, and according to a survey by PwC in 2016, almost half of insurance companies think they will lose 20 per cent of their business to InsurTech companies over the next five years.

Big US insurers have established corporate venture capital arms to invest in InsurTech ventures, including MassMutual, Transamerica and American Family, and big non-US insurers include Axa, Allianz, XL and China’s Ping An.

Global FinTech consultancy Capco Digital’s 2018 report states, Asia is fast reaching an inflection point as the catalyst for InsurTech transforming the insurance industry. Asian insurers spent $35bn on InsurTech enhancements in 2018,.

Types

InsurTech is automating all segments of the insurance industry, from business insurance to pet insurance (via fitness trackers).

Two InsurTech ventures that have been in the headlines are Zhong An - “World’s first ‘InsurTech’ IPO raises $1.5bn”, and Lemonade, which raised $300m in its last venture capital fundraising

Also, celebrities Jay Z, Robert Downey Jr, Will Smith and Kevin Durant have added some celebrity glamour to an $11.5m funding round for InsurTech start-up Ethos Technologies, which is looking to make the process of getting a life insurance policy fast, easy and cheap

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