Sixty-three insurtech deals with a total value of $1.59 billion were announced worldwide in the fourth quarter of 2018, up 24 percent and 155 percent respectively over the fourth quarter of 2017.
The total, including all-stage investments in property/casualty and life and health ventures, was the second-highest ever behind the exceptional second quarter of 2015, according to a new briefing from Willis Towers Watson.
After rising for several years, the number of strategic insurtech investments by reinsurers declined by six percent from its peak in the second quarter of 2018, but funding increased significantly. Eleven insurance-sector investors ploughed $218 million into insurtechs in the fourth quarter of 2018, up 230 percent from the previous quarter. Currently, the global industry maintains 31 strategic partnerships with technology companies, the highest number recorded.
The latest Willis Towers Watson briefing focused on sophisticated new insurtech tools to help manage cyber risk.
Dr. Andrew Johnston, global head of insurtech at Willis Re, said, “Cyber is a multifaceted, ever-evolving phenomenon. The appropriate response to this is to task our industry with an equally multifaceted approach. Rather than trying to specialize and excel in each tenet required, insurtechs offer our industry a huge opportunity through strategic commercial partnering to allow incumbent insurance firms the ability to become part of a broader, more resilient jigsaw puzzle.”
Mark Synnott, global head of cyber at Willis Re, said, “There's a healthy ecosystem of insurtechs, insurers, reinsurers, and brokers working to quantify and price individual and portfolio cyber risk under affirmative coverage. More work needs to be done to address silent cyber, since potential accumulation exposure is enormous, but it is under way. For example, we have a module in our PRISM-Re cyber model that assesses exposure to silent cyber and several insurtechs have developed software that deploys policy-analysis algorithms that help insurers expose and quantify silent cyber coverage. As the cyber threat grows, such tools will become increasingly valuable and commonplace.”
Learn more: Willis Report.