Insurtech : everyone after a piece of the action

With the worldwide insurance market worth nearly £4trillion, and £2.1billion invested in insurtech last year alone, it’s not surprising that there’s a feeding frenzy going on among service providers. Because, as the latest Future of Insurance publication from Raconteur clearly reveals, everything is up for grabs.

Right across the value chain, from law firms and big data specialists, to Silicon Valley entrepreneurs and fintech pathfinders, there is no shortage of hungry businesses ready and able to move into the insurance space – a fact clearly reflected in the advertisements in the Raconteur paper. Our analysis of its contents (see graphic above) reveals the wide range of players and the main areas of focus for insurtech. Consultancy services, software solutions and customer experience dominate, with a large number of new entrants and technology providers highlighting their skills as risk managers and data specialists. All are poised to disrupt the industry in the same way that fintech transformed banking.

Collaborate and conquer

Insurtech can be a double-edged sword for insurers, a fact underlined in a report published in the Financial Times on October 14. The heading – ‘Insurance sector worried as insurtech startups cosy up to customers’ – reflects the growing threat posed by new technology as challenger brands move into space that was once the preserve of traditional insurers.

Research by the US investment bank Financial Technology Partners reveals that insurtech companies raised $2.6 billion last year – more than the five previous years combined – while PwC reported earlier this year that almost half of insurance companies believe they will lose 20 percent of their business to insurtech companies over the next five years.