What was the Insurtech investment evolution in the last ten years?
Insurtech has been keeping up with an increasing investment trend since 2016, although we can observe a slight drop in 2020. Even with the COVID-19 impact, 2020 counts as the second highest level of funding amount that can be attributed to the bias generated by Super Deals* as the previous year (for instance, Bright Health raised more than $1B from 2019 to 2020) and to the reduction of number of deals, that ultimately affirms the idea of industry maturitiy.
General overview & insurtech investment evolution (2010-2020)
Number of Deals
Total Funds 2010-2020
What was the average per deal trend by quarter?
Average funding per deal mantains its trend after the first quarter of 2020. In addition to lower funding levels, the higher average per deal on second, third and fourth quarters were a strong indication of the consolidation of known Insurtechs and investors’ preference for more mature companies this year. In 2020, the first quarter showed evidence of the covid impact and the high level of uncertainty during this period, whilst the fourth quarter showed the highest historical average per deal, consolidating the mentioned assumption.
Average funding per deal. Quarter analysis
What was the best quarter in 2020 for insurtech investments?
Definitively the best average for Insurtech investments was the second quarter. COVID-19 impacted all other 2020 Quarters when compared to 2019, but 2019 Q3 had the largest investment in the past 10 years and more than 100% above average (2015-2020). This fact raises a question on how much of the impact was due to a normal deviation and how much is a result of COVID-19.
General overview & insurtech investment evolution (2015-2020) - Quarters
In 2020, Q3 had approximately a 100% increase compared to the same quarter of 2019.
Six companies raised $1.7B: Bright Health , Ki Insurance, Next, Waterdrop, Hippo and Acko.
Which regions strengthened the third quarter?
North America was the region where the funding amount suffered most in 2020, even when, taking into account the third quarter, where funding reached its maximum since 2016 in both Europe and North America. In the USA, we have seen large funds directed to American Giants such as Bright Health, Next Insurance and Hippo; while in Europe the consolidation of Alan, the expansion of Bought by Many and KI insurance private equity round increased the fundings in 2020. Europe and North America’s quarter comparison growth differed from Asia and showed the contrast of how invested money per region was impacted in different periods during 2020.
Quarter comparison in main regions
4 American companies raised $1B: Bright Health, Next, Hippo and States Title.
2 European companies raised $0.5B: Ki Insurance and Descartes Underwriting.
Which was the leading region during 2020?
The USA slowed down 2020 funding investments. North America led funding amounts from 2016 to 2020. The large representation of the USA in the Insurtech market (in both investors and invested company sides) overcame the increase from 2019 to 2020 in other regions and the high direct impact of this country on a global scale pulls down the general funding amount value.
General regional breakdown – main regions in 2020
What was the series' evolution trend in the last ten years?
Late-stage Insurtechs retained the largest share of the total funding amount. Outliers and lower investor risk appetite enterprises attracted the concentration of funding and other types of rounds. Other types of investments increased its share of total investments in 2020. For instance, other investment vehicles such as Government public funds and private equities fuelled this category.
Evolution of funds by series
Everledger, a blockchain focused company raises $7M USD through debt financing.
Ki Insurance the fully digital and algorithmically-driven company raised $500M USD in 2020 from a private equity fund.
The top 6% Insurtechs make-up more than 70% of the total funding amount, while in 2019 we had 6% accounting for 67%. However, the bar was raised to over 6% from $70M USD to $90M USD. Furthermore, investments in the clusters below is evidence of investors’ positions and their tactical investment strategy.
Total funding Amount adjusted (from 2010 to 2020)
Super Deals in the last two years
In 2020, significant transactions and announcements related to important Insurtechs were significant factors to be considered for upcoming years. Funds were being directed to disruptors of the past that have known business and activities.
Super deals - 2020
2019: $2.6B in 8 companies
2020: $2.3B in 8 companies
Featured insurtechs (foundation in 2019 – 2020)
Investment amounted direct to recent founded companies dropped sharply in 2020, the only exception was KI insurance. In 2020, Leaders Ki insurance and Extend represented completely different approaches in their business. Emerging markets followed American pioneers and additional services such as telemedicine.
Comparison of relevant new founded companies (2019 and 2020)
2020 new companies
KI insurance is a Lloyd’s intelligent brokers platform initiative. The first fully digital and algorithmically, driven syndicate (accessible anywhere and at any time), this insurtech collaborates with Google Cloud to be easily accessible by all users.
Last funding round: 500 M USD (Private equity)
DocDoc has secured a strategic partnership with insurance risk-control firm Kaitaiming Technology (KTM) to expand its reach into China.
The startup will be the exclusive supplier of "doctor-discovery" services to KTM and its affiliates for doctors in South-east Asia, Hong Kong and South Korea. KTM will integrate DocDoc’s doctor-discovery service into its insurance agent application, which will enable the startup to reach the policy-holders of China’s top insurance companies.
Last Funding Round: Pre seed 500 K USD
Asistensi is a Spanish insurtech that protects migrants against the financial setbacks of health emergencies in their families back home. The company offers products 100% Online that include additional services such as telemedicine and sending doctors to clients’ homes.
Last funding round: Seed 3 M USD
2019 new companies
Extend is a personal belonging insurance broker. 100% digital and mobile company. In partnership with large recognized brands, this company can offer dynamic real time pricing in a customer friendly way. Fast claims processing.
Last funding round: 40 M USD (Series B)
Alice is a health insurtech follower in an emerging market. The company brings Pioneers Health insurance standards to Brazilian customers with simplification and digitalization to the Insurance traditional market.
Last funding round: 12.5 M USD (Series A)
Descartes Underwritting is a French insurtech company that collects data with IoT, third parties and satellites, processing them using Artificial intelligence to empower core insurance systems from risk modelling to claims management.
What was the behavior of Life and Health lines of business in 2015-2020 period?
Health maintained its focus on known Insurtechs in the USA and Europe. However, new players surged, based on different technologies and Business models. Due to COVID our natural assumption was that Health would increase its share in investors’ preference however, there is little evidence to confirm this assumption.
The Life line of business was focused on additional services such as prevention, financial planning and digital will services, and simplification of the customer life insurance experience.
Comparison from 2015 to 2020 – Health & Life
What was the behavior of Auto and Cross lines of business in 2015-2020 period?
The Auto line of business investment decreased to 2015 levels of absolute investment value. Usage-based and on-demand auto industry was still relevant, but investors were allowing for other types of Insurtech Business models. Leading Companies of 2020 were different than that of 2019, focused on technology and online platforms.
Cross is driven by technology-focused companies and Indian Giants. The USA and the UK strengthened growth, while Indonesia surprisingly appeared in the top countries in the Cross line of business.
Comparison from 2015 to 2020 – Auto & Cross
What was the behavior of the Commercial & Home lines of business in 2015-20 period?
Commercial line of business did not suffer as much as Auto and Home during 2020. American Insurtechs led the funding direct to the Commercial line of business. Cyber security insurance finished at the top of funded Insurtechs. Technology Platforms also attracted funds in 2020.
In 2020, The Home Line of business showed a significant increase in both money raised and average per deal, led by the American giants and technological Insurtechs. The Insurtech openly presents a different perspective and focuses on brokers & independent agents.