Companies listed in last year InsurTech 100 have gone on to raise over $300m in combined funding since October 2018.
Insurance may have been a little late to the party for integrating cutting edge technology, but it is here now and is making a lot of noise. While it still has some way to go in catching up with other parts of FinTech, like payments, banking and lending, the sector is fraught with new innovative opportunities.
Since 2014, more than $9.4bn has been invested into the InsurTech sector, of which, $3.3bn was invested in 2018 alone, according to FinTech Global data. Further depicting the increasing appetite for solutions, the first quarter of 2019 has already seen $1.5bn deployed into InsurTech startups, 46 per cent of total funding raised in the whole of last year.
Due to this bustling marketplace, 100 companies were hand-selected by a panel of FinTech experts to create the inaugural InsurTech 100 list. FinTech Global helped compile the data of entire InsurTech landscape in which the 100 most promising businesses were chosen. The requirement to be picked was simple, any of the world most innovative InsurTech companies that every leader in the insurance industry should know about in 2019.
The list received a lot of attention and excitement around the world, not just from those 100 companies but all players in the market.
One of the biggest funding rounds to be raised since the list announcement, was Acko General Insurance $65m Series C which is closed in March 2019. The India-based insurance company uses data and analytics around customer behaviour to create personalised digital insurance products. Policies available are for car, bike and mobile protection.
Since Q4 of 2018, over $2.2bn has been invested into the global InsurTech sector. The InsurTech 100 companies were responsible for more than $300m of this; however, this figure could be a lot higher due to several undisclosed funding rounds.
Alongside funding rounds, a number of the companies in the list completed partnerships and acquisitions. Most notably was that Applied Systems acquired TechCanary, a fellow InsurTech 100 company, in April 2019.
Applied Systems is a cloud-based software developer which gives insurance firms lifecycle automation tools and data exchange systems for brokerages, insurers and clients. TechCanary is an insurance CRM service and has integrated within Applied Systems broker management system. The acquisition was made to help Applied Systems boost its sales and marketing solutions and boost automation efforts.
This was not Applied Systems only activity since October. The InsurTech has since acquired the employee benefits service provider Dynamis Software and received a minority investment from private equity firm CapitalG.
Following the reveal into the InsurTech 100, Applied Systems CEO Reid French said, ?Applied is at the forefront of innovation, driving digital transformation across the insurance industry to accelerate business growth. We are proud to be recognised as one of the most innovative providers of digital solutions for the insurance industry.p>
Last month, it was reported in the market that Paytm, a payments giant in India, is looking to acquire InsurTech 100 company Coverfox. The deal is expected to be worth around $120m. Coverfox is an online broker which helps consumers in India compare insurance policies for vehicles, health, travel, life, investment and general cover.
There were a handful of interactions between InsurTech 100 companies, aside from the Applied Systems and TechCanary acquisition. Renters insurance company LeaseLock, which closed also closed $10.1m in November 2018, formed a strategic partnership with API-driven insurance platform Boost Insurance.
This agreement saw Boost provide its infrastructure-as-a-service to LeaseLock, to support its back-end processes, improving its risk capacity and claims administration.
Commenting on the partnership, Boost CEO and founder Alex Maffeo said, ?LeaseLock mission is perfectly aligned with Boost; they are transforming the real estate industry by applying an InsurTech solution. We are their insurance technology partner to help power their impressive growth to date and beyond. LeaseLock is truly cutting-edge in the InsurTech space. We are excited to partner with them.p>
It not only companies which have shown their interest into the InsurTech 100 companies, with a handful investing or partnering occurring in this time period. Aon was one of the large insurance firms to interact with the 100, forming a commercial partnership with CoverWallet, a digital insurance company for small businesses.
Through the deal, Aon has been able to grow access to the SME insurance segment and CoverWallet has been able to reach new geographies. In addition to the partnership, Aon made a strategic investment into the company.
Top investment rounds
The largest deal for an InsurTech100 company was the previously mentioned $65m Series C of Acko General Insurance. The round was backed by Intact Ventures, RPS Ventures, Accel, SAIF, and TechPro Ventures, and a number of other investors. The series investment brought the InsurTech total equity raised to $107m and brought it valuation up to $300m.
CoverHound was responsible for the second largest funding round, bagging $58m for a Series D round. The investment was led by global specialist insurer Hiscox, with participation also coming from Chubb, Aflac Ventures and MS&AD. The round put its total funding efforts up to $112m, since it was launched in 2010. CoverHound is a digital insurer which supplies small businesses with tools to purchase protections including online operations, general liability, business ownership, workers compensation and commercial auto.
The company recently released is CyberPolicy, where businesses can compare, quote and buy cyber insurance.
On the back of the investment into CoverHound, Hiscox USA EVP of Small Business Insurance Kevin Kerridge said, ?We are delighted to have this opportunity to work more closely with one of the few truly digital agencies that shares our passion for making material strides in the changing SMB landscape.
?CoverHound, as reflected more recently through its CyberPolicy brand, is leading the charge in providing a best-in-class digital cyber solution for businesses, and we are excited to be part of that both as a carrier and the lead investor in this funding round.p>
The third largest deal of the period was closed by worker compensation insurance platform Pie Insurance. Closing its Series B on $45m, the InsurTech raised the funds in order to expand its geographical presence, add additional distribution sources and smoothen customer experiences.
Other companies from the list to raise funding were online SME insurance platform Embroker ($28m), AI-powered services for underwriting Cytora (?25m), and on-demand car insurance By Miles (?5m).
Following the success of the 2018 InsurTechs, nominations for the 2020 InsurTech 100 list are set to open to all InsurTech companies offering solutions for financial services firms.
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