Insurance Business More than half of insurtech funding worldwide is invested in this area, report says

More than half of insurtech funding worldwide is invested in this area, report says More than half (56%) of total investment in insurtech start-ups globally for 2016 was channelled to analytics, artificial intelligence (AI), and the internet of things (IoT), according to research from Accenture. They also accounted for 70% of the total value invested.

The combined number of deals across AI (including automation) and the IoT (including connected insurance) increased 79% in 2016. Results were based on “The Rise of Insurtech” report – an analysis of more than 450 insurtech deals.

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Some 96% of insurers think that digital ecosystems are having an impact on the insurance industry, and 87% agree that technology is advancing at an exponential rate.

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Just 14% of insurtech deals in 2016 featured an insurer or its strategic venture arm. But the figure represented a significant increase over the preceding two years – up from 3% in 2014 and 12% in 2015.

“Insurers’ investments might represent just a small proportion of total insurtech funding, but these companies are actually investing significantly larger amounts in other types of start-up,” said the report.

A global analysis of investments made in 2016 by 75 insurers revealed that only 17% of deals related to insurtech companies.  The other 83% related to start-ups from outside the insurtech space, “but often with a focus on technologies that hold potential for the insurance industry in the future.”

Deals relating specifically to non-life insurance still account for most insurtech activity, although the proportion declined from 69% in 2014 to 63% in 2016.

“There is a growing recognition among insurers that insurtech ultimately represents more of an opportunity than a threat, and that they should seek to collaborate more closely with this latest breed of technology-fuelled start-ups,” said the report.

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