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inspiring threats (part 1) ~ Insurance Academy

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Technology is now entering the insurance sector. Technology brings the power of innovation that will bring about change as we see in the banking industry with the emergence of fintech (financial technology).

Fintech usually starts as a start-up company trying to give color to the banking sector. They break traditional banking by providing lower admin fees, eliminating the need for branch offices, and using websites or applications to make transactions. By developing innovative products and digitizing, Fintech is starting to take over the dominance of traditional banks.

The same pattern will occur in the insurance industry. Insurtech seizes the opportunity to seize market opportunities with technology. Like Fintech, Insurtech can expand innovation through various sectors and create various competitive advantages. People increasingly expect an easy insurance purchase process and a fast claim submission process. Not only that, Insurtech is expected to be able to create innovative products that meet the needs of the community.

The birth of Insurtech

For several years, Insurtech has colored the insurance industry. Based on data from CB Insight, investment in insurtech started in 2011 amounting to $140 million. This value increased to $270 million in 2013. In the same year, several insurtechs successfully secured funding from various investors. The average perinsurtech investment was $5 million in 2011 to $22 million in 2015.

An analysis of the Panorama Insurtech database of company founding geographies shows that while the US has been a pioneering market for insurtech, now only 46 percent of companies are headquartered in the region with another 40 percent based in EMEA. After the US, UK and then Germany is the home of most of the insurtech companies. The Asia Pacific region accounts for only 14 percent of insurtechs but is expected to be the fastest growing region in the future. Insurtech is active in all insurance products and business lines, with a concentration in the P&C business and in the area of ​​marketing and distribution of the value chain (Figure 1).

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