Venture investment in the insurtech sector reached an all-time high near $2 billion in the fourth quarter of 2019, according to Willis Towers Watson's Quarterly Insurtech Briefing. It's the sixth straight quarter of more than $1.25 billion invested, dating back to Q3 2018.
"If we look at 2019 as a whole, these last 12 months alone have produced 33.9% of total global InsurTech investment recorded to date," says Dr. Andrew Johnston, Global Head of Willis Re InsurTech, and editor of the Quarterly Briefing. Yet, he cautions, "How this all translates to widespread value creation for our industry and consumers of insurance products and services is still largely to be determined."
The banner year included the introduction of five new "unicorns," or startups with valuations over $1 billion, in insurtech, half of the total; as well as a 90% increase in funding rounds of $40 million or more. At the same time, however, WTW estimates that 184 insurtechs shuttered over the past three years, indicating that winners are being identified from the larger community and the higher investments represent big bets on a few companies.
"Upon reflection we might also come to remember 2019 as the year when the foundations were laid for a trend that we are quite likely to observe in the future months: individual InsurTechs coming to the fore to lead specific parts of the market, whether it be in lines of business or uses of particular technology," Johnston writes. "The winners of the InsurTech race are slowly starting to show themselves, and as such, we are at the crossroads of a massive opportunity."
