The US is the biggest region in terms of investment in insurtech projects, but Europe is catching up with more than double the number of deals in 2017 compared to the previous year.
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According to analysis by Accenture during 2017, the number of insurtech deals in Europe grew 118%, while the value of deals in 2017 was $679m, 385% more than in 2016.
The US is still the biggest, with $1.24bn worth of deals, but the number of deals only grew 6% in the last year.
Insurtech is a subset of the fintech sector which sees challenger companies focus on consumer-friendly technology in the insurance sector.
According to the World Insurance Report 2017 from Capgemini and banking and insurance association Efma, which surveyed 8,000 people globally, 31% of people already receive insurance products through insurtechs.
An example of an insurech is Honcho, a free mobile app that promises to take on the established price comparison websites for car insurance. Rather than the customer looking for the best deal, they put their details into the app and the insurance providers make bids to the customer.
Insurers pay £1 to bid and there are three rounds of bidding, with insurers able to see what prices competitors are offering.
According to the Accenture research, the UK is Europe’s largest insurtech hub, with 41 deals in 2017. The amount invested in UK insurtech grew massively, with $364m invested in UK-based insurtechs compared to $19m the year before.
“The insurtech industry’s rapid growth reflects investors’ response to consumer appetite for change in an industry sitting on trapped value,” said Roy Jubraj, Accenture’s UK and Ireland insurance strategy and innovation lead.
“At the same time, however, insurers must recognise that insurtech investments alone can’t deliver the levels of change and innovation the industry requires or that its customers expect. The key is having an enterprise-wide innovation strategy that transforms the core business and enables the company to drive growth.”
The research found that property and casualty was the most popular insurance segment for insurtech investments in 2017, accounting for 42% of global investments.
In 2017, Altus Consulting said disruption caused by new technology in the insurance sector is likely to mirror that in the travel sector. In 2006, 57% of people in the UK booked their holidays on the high street. By 2016, this figure dropped to 19%.
Today, brokers on the high street have been replaced by websites such as Expedia.com and Lastminute.com, which offer online and app-based travel booking services: through these, and combining different parts of their holidays – such as accommodation, flights, hotels and car hire – from a range of companies.