Insurtech is thriving in the UK, having spun out of the Fintech revolution and UK Insurtechs are providing solutions across the whole insurance market. This is enabling insurers and carriers to deliver innovative products that challenge the status quo of the incumbents, in personal lines, commercial insurance and for specialist markets.
London as the birthplace of insurance, is also the centre of significant investment in the Insurtech scene across the UK. With a thriving, driven, insurance ecosystem, the opportunities exist for investment across the whole market to drive efficiencies, create new products, and build new ways to acquire business.
It’s recognised that the consumer perception of the industry is currently very low, and insurtechs are central to ensuring the industry can change these views, with innovation that’s redefining insurance from a policyholder (both individual customers and corporate business) perspective.
Investment is strong, with over $1bn in UK Insurtech in 2018, and good investments to date in 2019.
Investment in Insurtech businesses in 2018 was strong with ~$1bn of investment in UK Insurtech businesses in over 30 deals. This is up by ~25% from 2017 ($800m). (Compared to 2018 global investment of $5.7bn investment in over 240 deals).
Significant focus of investment (~40%) is on the greenfield opportunities – i.e., “getting more business”, through new ways to acquire business or new products. The remaining investment was on solutions that provide efficiencies in the value chain, support operating cost reductions and improve customer experience.
In 2019, whilst there have been some significant headline deals (US: Lemonade Series D $300m in April, EU: WeFox Series B $125m in March), the investment in UK Insurtechs has been positive. Already this year, we have seen 6 of the 50+ Insurtech UK members receive additional funding at Seed or Series A.
Insurtech UK alliance set up to provide a common voice to the industry and is rapidly onboarding Insurtech firms across the UK.
Insurtech UK is an alliance of over 50 UK-based Insurtech firms covering the entire cross-section of the Insurance value chain in personal lines (i.e., direct to consumer), commercial lines (i.e., business/organisations), and specialist areas, including London Markets.
They can be categorised broadly into different areas:
- Acquisition – companies focussing on disrupting the approach to purchasing insurance
- Product – typically companies providing new and focussed products to consumers
- Platform – innovative, technology-led solutions to enable new and incumbent insurers to build products quickly and efficiently – re-vamping the “back-end” technology
- Claims – technology-led solutions to support throughout the claim lifecycle
- Analytics – data-led companies who are producing information that can support the risk analysis and underwriting of insurance.
"In the UK last year, 40% of Insurtech investment is broadly in ‘getting more business’, new ways to acquire business and new products - with 60% focused on cost reduction and efficiencies within the value chain"
Martyn Evans, Consulting Director, Altus