Insurtech continues to gain traction as companies in the space raised US$1.41 billion in Q2 2019, making Q2 the fourth consecutive quarter of global insurtech investment surpassing the US$1.2 billion mark, according to the Quarterly Insurtech Briefing Q2 2019 report by Willis Towers Watson Securities and CB Insights.
Insurtech investment trends
Though the US has historically dominated insurtech investment, a shift is progressively coming. In Q2 2019, 42% of all insurtech deals took place in the US, a 4%-point decrease from the previous quarter, showcasing the growing important of investment centers outside of the US. 11 deals took place in the UK, 6 in China, and Lebanon recorded its first insurtech deal since Q1 2017.
This quarter’s funding has come from a number of later-stage investments. Four of them totaled an excess of US$100 million, and several have achieved unicorn status.
Lemonade, a US renters and homeowners insurance startup, was priced at a pre-money valuation of over US$2 billion after raising US$300 million from Allianz X, General Catalyst, Google Ventures, OurCrowd, Softbank Group and Thrive Capital.
Similarly, Indian aggregator site PolicyBazaar, which raised US$152 million in a Series F in May, is valued in excess of US$1 billion.
According to the report, in the slipstream of these insurtech unicorns, companies like MetroMile, Slice, and Oscar couldl also soon attract billion-dollar-plus valuations.
Softbank’s investment involvement in this latest quarter was significant and noteworthy. The three largest deals in Q2 2019 by dollar amount — Lemonade, Collective Health (US$205 million) and PolicyBazaar — all involved Softbank as a lead investor.
The other US$100 million+ deal in Q2 2019 was Shuidi Huzhu, an insurance platform focusing on the problem of high medical fees. Shuidi Huzhu raised US$145 million in a Series C funding round from Boyu Capital, China Capital Investment Group, Gaorong Capital and Tencent Holdings.
Other significant transactions that took place in Q2 2019 include GoBear, a financial products comparison site (US$80 million), Beam Dental, a company that offers employers, individuals and families dental insurance coverage (US$55 million), Health I.Q., a company that partners with insurance carriers to offer health conscious people lower rates on life insurance (US$55 million), and Zego, a pay-as-you-go drivers’ insurance company (US$42 million).
Q2 2019 also recorded a significant number of strategic tech investments by (re)insurers. At 36, it is the highest quarterly total, the report says.
Some of the larger deals by insurers include online investment management platform Wealthsimple’s US$75 million round by Allianz X, and online health management firm More Health’s US$74 million investment from China Pacific Insurance.
(Re)insurers also inked several partnerships in Q2 2019: Pacific Life partnered with Blueprint Income to modernize the purchase of annuities, CoverWallet is working with Zurich Insurance Group to launch an online platform for small and medium-enterprise insurance in Switzerland, and CSAA and Owlcam announced a collaboration where CSAA will use Owlcam’s video security and safety services to improve claims experience for its customers.
Insurtechs in the spotlight
The report features four insurtechs: UK-based Simply Business, US-based Bindable, Germany-based massUp and UK-based Confused.com.
Founded in 2005, Simply Business is a leading insurance provider for small businesses and landlords. The company handles the full customer life cycle on behalf of its insurer partners and partners can build proprietary products on Simply Business’ platform. Simply Business serves more than 590,000 micro-business customers across over 1,000 different trades and professions.
Bindable offers an enterprise software-as-a-service (Saas)-based solution that enables insurance companies and intermediaries to more efficiently grow business through preferred channels. The company’s software enables customized partner distribution and rapid market expansion for industry leaders and brands alike.
Germany’s massUp is a digital solution for the insurance industry that enables carriers to sell micro-insurance policies through its own white-labelled software direct to consumers.
Finally, Confused.com, the flagship business in Penguin Portals Group, is a leading price comparison insurtech that allows customers to enter their risk details online once only and then obtain quotes from over 120 brands within seconds. This is possible across 40 different product lines. Confused.com revolutionized the personal insurance quote-and-buy journey in the early 2000s and continues today to develop novel and value-adding data and insight products for its insurer partners.