The data for insurtech investments in 2018 is in. It reveals a maturing landscape characterized by ballooning investment volume and growing geographic diversity.

For years, insurtechs have been producing some of the most exciting and innovative ideas in the insurance industry, from cutting-edge uses of AI to radical new business models. Accenture’s analysis of data from CB Insights suggests that 2018 was the biggest year yet for investment in the space.

The headline takeaway from the analysis is the $4.4 billion of global investment that insurtechs as a whole attracted—an all-time high. That’s up 98 percent from 2017 and represents a third of all insurtech investment since 2010. The number of deals reached 410, up 11 percent from 2017, while the median deal was worth $3 million.

The number of insurtech deals involving industry incumbents also continued to grow—another strong signal of the growing importance of insurtechs to the broader industry. According to Accenture Research analysis, 230 insurtech deals last year involved at least one traditional insurer. That’s up from 192 such deals in 2017 and 178 the year previous.  As the figure below illustrates, the compound annual growth rate for the number of such deals since 2012 is an impressive 49 percent.

The geographic location of insurtech investments also broke new ground last year. North America has been the leading destination since CB Insights began tracking these investments in 2010. In 2013, for instance, 77 percent of deals funded insurtechs based in North America.

Last year that changed. North America accounted for just 42 percent of deals in 2018; its lowest portion since 2010. This shrinking portion is due not to a decline in the number of North American deals but to rapid growth elsewhere, especially in Europe and the Asia-Pacific region.

Analyzing the offerings of the firms attracting investment reveals another ongoing shift in the insurtech ecosystem. To date, marketing and distribution has been the most popular segment of the value chain for insurtechs to target. That was still the case in 2018, but deals aimed at other parts of the value chain proliferated like never before.

For instance, 13 deals involved insurtechs using analytics and data science to improve underwriting, while 21 related to artificial intelligence in underwriting, claims management, or IT. This is an exciting indication that insurtechs are moving beyond their traditional confines of marketing. They now offer innovation that can improve core business processes for traditional insurers.

Breaking down deals by insurance sector produced similar results to 2016 and 2017. The P&C sector once more attracted the largest number of deals, with the health, life-annuities, and multi-line sectors again accounting for most of the remainder.

However, the P&C, health and multi-line sectors did all attract significantly more funding than in 2017. In P&C, investment value jumped from $897 million to $1.7 billion. In health it grew from $679 million to $1.5 billion, while multi-line grew from $347 million to $809 million.

For a closer perspective on the sort of firms that were attracting investment, let’s take a look at the 10 biggest insurtech deals of 2018.

  1. Cambridge Mobile Telematics, $500 million, United States, P&C sector, trend: telematics
  2. Oscar Health, $375 million, United States, health sector, trend: digital insurer
  3. Devoted Health, $300 million, United States, health sector, trend: price-comparison platform
  4. Bright Health, $200 million, United States, health sector, trend: digital insurer
  5. PolicyBazaar, $200 million, India, multi-line sector, trend: price-comparison platform
  6. Oscar Health, $165 million, United States, health sector, trend: digital insurer
  7. Gusto, $140 million, United States, multi-line sector, trend: digital services
  8. Prima Assicurazioni, $116 million, Italy, P&C sector, trend: online insurance
  9. Collective Health, $110 million, United States, health sector, trend: as-a-service solutions
  10. Root Insurance, $100 million, United States, P&C sector, trend: usage-based insurance

Now that the dust has settled on insurtech deals for last year, we can safely say that it was the biggest year yet for investment in the space.

To cover this burgeoning sector of the insurance industry in more detail, I’ll be writing a series of blog posts profiling some insurtechs of note. Keep your eyes on this space for more in-depth coverage of the insurtech landscape.

Or, if you’d like to continue the conversation about insurtechs and the broader insurance industry, I’d love to hear from you. My contact information can be found at the top and bottom of this page.

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