Over the last several weeks, we’ve looked at the reasoning behind the trend of insurers investing in tech startups. Today we’ll examine a few of the most active players in the European market, and where they’re putting their money.
A recent study by CB Insights shows that the biggest insurance startup investors are based in the U.S. and China.
However, Accenture research (“The Future of Fintech and Banking: Digitally Disrupted or Reimagined?”) finds that global investment in financial-technology ventures tripled from $4.05 billion in 2013 to $12.2 billion in 2014, with Europe being the fastest-growing region in the world. Last year, fintech investment increased at more than three times the rate of overall venture capital investment.
Although the U.S. still captures most fintech investment, Europe experienced the highest growth rate, with an increase of 215 percent to $1.48 billion in 2014. The U.K. and Ireland accounted for more than two-fifths (42 percent) of the European total, as investment in the region rose from $264 million in 2013 to $623 million in 2014.
In the rest of Europe, the regions that experienced the most significant levels of investment in 2014 were the Nordic countries ($345 million), the Netherlands ($306 million) and Germany ($82 million).
Although these numbers include all fintech investment, and do not parse out the insurance sector, European-based insurers are by no means sitting on the sidelines when it comes to investing in fintech startups.
Probably the most active insurance player is AXA, which earlier this year launched a venture capital fund worth €200 million (US$220 million), starting with five European companies, according to Insurance Network News. One of its latest investments is Flyr, a San Francisco-based airfare forecasting startup that recently expanded to Europe, funded by a $500,000 equity investment from AXA Seed Factory, the venture arm of AXA. Flyr International will be based in Paris.
As a forecaster of changes in price and availability of tickets for individual flights, Flyr can partner with travel intermediaries, credit card companies, and insurers, which can offer fare-protection products with Flyr technology.
In keeping with AXA’s strategic investments, here are some other recent developments:
- Generali, Europe’s third-largest insurer, has recently announced that it will “indirectly invest” €1.25 billion ($1.37 billion) in emerging financial technology by 2019, according to the Financial Times. The insurer will work with a group of venture capital funds including Ribbit Capital and GGVC Capital to support startups in mobile payments technology and data analysis, among others.
- The French arm of global insurer Allianz recently announced a crowdfunding investment fund with French equity crowdfunding platform SmartAngels, according to Crowdfund Insider. Allianz customers will be able to use SmartAngels’ platform to invest in startups and high-growth companies, with Allianz France co-investing in the same companies, matching euro for euro, up to €50,000 ($55,000) per company, per investor. Allianz will also repurchase individual investors’ stakes under certain conditions. Allianz has committed €10 million ($11 million) over five years to the project.
- Insurers Allianz, Admiral, ERGO, Momentum, Unipol Group and Lloyd’s are teaming up with global tech accelerator Startupbootcamp to mentor the chosen startups and search out the insurance technology of the future, according to a recent article in City A.M. The 10 startups which are included in the program will get funding, mentorship, office space, and opportunities to network with the industry, investors and venture capitalists. Startupbootcamp already hosts accelerators focused on areas like e-commerce, smart cities and the Internet of Things in several cities around the world. Since 2010 it has had 221 startups on 19 global programs pass through its doors and boasts a 71 percent funding rate, with each gaining an average investment of just over half a million euros ($550,000).
All these examples go to show that the insurance industry has recognized the importance of being on the cutting edge of technology to compete in today’s digital world, and to deliver products and services that create new value for customers.
What’s your company doing to partner with new, exciting businesses? Drop me a line and let’s discuss.
For more information, go to: