InsurTech investment doubled between 2017 and 2018
- More than $8.5bn was raised by InsurTech companies globally between 2014 and 2018, with 599 deals completed during the period.
- The number of transactions peaked at 151 in 2016, with over $1.4bn raised by InsurTech companies that year. Oscar, a New York-based health insurance provider, raised $400m of private equity funding at a $2.7bn valuation. This round, led by Fidelity Investments, was the largest InsurTech deal of 2016 and is the third largest InsurTech deal to date.
- Investment almost doubled from over $1.6bn in 2017 to almost $3.2bn last year, while deal activity dipped slightly from 141 transactions to 138 during the period. Armour, a Bermuda-based P&C insurance business, raised $500m from Aquiline Capital Partners in Q1 2018 to create a new reinsurance group. This was the largest InsurTech deal of 2018.
Funding in Q4 2018 was almost 80% higher than in Q4 2017
- Global InsurTech investment reached $664.6m in Q4 2018 which is 78% higher than the capital raised in Q4 2017.
- Prima Assicurazioni, a Milan-based online insurance company, raised $115m from investors including Goldman Sachs Private Capital Investing and Blackstone Group in October 2018. This was the largest InsurTech deal in Europe last quarter and Prima intends to use the funds to invest in new technologies and expand its marketing and sales teams.
- InsurTech funding surged in Q1 2018 with over $1bn raised across 44 deals however, $500m of this investment was raised by previously mentioned Armour.
- Q3 2018 was also very strong with InsurTech companies raising $996.2m across 29 transactions. Aforementioned health insurance provider Oscar, raised $375m from Alphabet in the largest deal of the quarter. The funding will allow Oscar to increase its headcount of engineers and data scientists.
InsurTech deals have been shifting from North America to Europe
- The lion share of global InsurTech deals over the past five years have been concentrated in North America, with 312 of the 599 deals in the subsector completed in the region during the period.
- However, the proportion of deals involving InsurTech companies based in the region declined from 58% in 2014 to 49.2% in 2018, as companies in other regions of the world garner the attention of investors.
- Asia still lags North America and Europe in terms of deal activity, however the region has seen 90 transactions over the past five years as InsurTech companies continue to develop solutions to serve the millions of uninsured potential customers across the continent. Policybazaar, an online insurance aggregator, received $200m of Series F funding, led by SoftBank in May 2018, and is now the most well-funded InsurTech company in India having raised just under $350m to date.
- The share of global deals involving InsurTech companies in Europe increased from 23.2% in 2014 to almost a third of all deals last year, with a total of 68 transactions during the period involving UK-based InsurTech companies. Tractable, a developer of artificial intelligence for accident and disaster recovery, raised a $25m Series B round in Q3 2018 which was the largest InsurTech deal in the UK last year. Investment came from investors such as Insight Venture Partners, Ignition Partners and Zetta Venture Partners taking Tractable’s total funding to $35m.
Nearly $340m was raised in the top 10 InsurTech deals in Europe last year
- The top 10 InsurTech deals in Europe in 2018 raised $337.6m, which is equal to 72.3% of the total capital raised by InsurTech companies across the continent last quarter.
- Half of the deals involved companies based in Berlin, with InsurTechs in Paris, London, Vaduz and Milan claiming the remaining five deals.
- Previously mentioned Prima Assicurazioni raised $115m of private equity funding which was the second largest InsurTech deal globally of Q4 2018.
- Coya, a flexible digital home insurance provider, raised a $30m Series A round in Q2 enabling the company to further invest in product development. This funding, led by Valar ventures, was the largest InsurTech deal in Germany last year.
- Paris-based Alan is a digital health insurance platform and the company received $28.3m in a Series A round led by Index Ventures with participation from investors such as Partech. Alan has raised over $40m since inception and now provides coverage to more than 7,000 employees across 850 companies.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2019 FinTech Global