Investment in Insurtech Industry Surged in 2017, with Europe Emerging as Key Insurtech Hub, Accenture Analysis Finds

But consumers won’t experience benefits of technology until insurers
rethink their innovation strategy

LONDON & NEW YORK & HONG KONG–(BUSINESS WIRE)–Global investment in the insurance technology (insurtech) industry
surged in 2017, with Europe emerging as a new insurtech hub outside the
U.S., according to new research from Accenture (NYSE: ACN).

The research, which includes new analysis of CB Insights data on
insurtech deals over the last year, appears in a new Accenture report
titled “Fearless
Innovation: Insurtech as the Catalyst for Change Within Insurance

According to the report, the number of insurtech deals increased 39
percent globally in 2017, with the total value of deals up 32 percent,
to US$2.3 billion.

While North America still leads in terms of both the total value and
number of deals – accounting for US$1.24 billion, or 46 percent of deals
last year – the number of deals there grew only 6 percent in 2017. In
Europe, however, the number of deals increased 118 percent, accounting
for one-third of all insurtech deals globally, and the total value of
deals there jumped an astounding 385 percent, to US$679 million.
Asia-Pacific saw a significant increase in funding, with a 169 percent
rise in deal values, to US$358 million, with the number of deals rising
27 percent.

Despite the uncertainty around the U.K.’s vote to leave the European
Union, the nation continues its emergence as Europe’s insurtech capital,
with 41 deals in 2017, representing total growth of 117 percent over the
last two years. Deal values vastly increased in 2017, with US$364
million invested in UK-based insurtechs, up from US$19 million the year

The report argues that insurtech should serve as a catalyst for
innovation across the insurance industry, but traditional insurers must
recognize that collaborating with insurtech startups is just one part of
this process. Ultimately, innovation needs to become engrained
throughout their organizations.

“The insurtech industry’s rapid growth reflects investors’ response to
consumer appetite for change in an industry sitting on trapped value,”
said Roy Jubraj, Accenture’s UK and Ireland Insurance Strategy and
Innovation lead. “At the same time, however, insurers must recognize
that insurtech investments alone can’t deliver the levels of change and
innovation the industry requires or that its customers expect. The key
is having an enterprise-wide innovation strategy that transforms the
core business and enables the company to drive growth.”

The research reveals that property and casualty was the most popular
insurance segment for insurtech investments in 2017, accounting for 42
percent of global investments, with multiline (26 percent) and health
(18 percent) rounding out the top three. Personal lines accounted for
more than two-thirds (68 percent) of insurtech investments, with
commercial lines and mixed applications accounting for 26 percent and
6 percent, respectively.

From a value chain perspective, marketing and distribution led all areas
in terms of insurtech investment, accounting for more than half (53
percent) of deals globally. This is evident in the number of startups
pitching slick, app-based sales and distribution experiences, as well as
those improving the customer claims journey through mobile
photo-evidencing or chatbot First Notification of Loss.

The report reveals that traditional insurers are quickly getting behind
emerging technology companies, as the percentage of traditional
insurers’ participating in venture capital investments is up 63 percent
over the last five years. The most common areas for these investments
were health and digital health (14 percent of such investments), the
internet of things (13 percent), and big data and analytics (9 percent).

“Insurtech is no longer just a target for private equity and venture
capital — it’s a global phenomenon,” said Michael Costonis, who leads
Accenture’s Insurance practice globally. “Insurers are playing a big
role in helping reshape the technology landscape across the industry,
making investments beyond wearables and telematics to seize the
opportunity that exists within distribution to strengthen the customer
experience. The next step for insurers is to use insurtech as a
springboard to innovate across their entire organization. After all,
$2.3 billion is a small slice of the pie when you consider that
insurance is a $4.2 trillion industry.”

Accenture analyzed insurtech investment data
from CB Insights, a global venture-finance data and analytics firm. The
analysis included global financing activity from venture-capital and
private-equity firms, corporations and corporate venture-capital
divisions, hedge funds, accelerators, and government-backed funds. The
investment data ranged from 2010 through 2017 and included equity and
non-equity financing.

About Accenture
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services company, providing a broad range of services and solutions in
strategy, consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more than 40
industries and all business functions – underpinned by the world’s
largest delivery network – Accenture works at the intersection of
business and technology to help clients improve their performance and
create sustainable value for their stakeholders. With more than 435,000
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