Investing in technology-oriented insurance ventures (insurtech) is clearly a global trend and almost half of all the money being poured into them globally is going into artificial intelligence and internet of things startups, new research finds.
The research from Accenture, which includes an analysis of CB Insights data on 450 insurtech deals over the last three years, appears in a new Accenture report titled The Rise of InsurTech.
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The CB Insights data reveals that global insurtech investment totaled $1.7 billion in 2016 and both the volume and value of deals have almost doubled since 2014.
While more than half of all deals still take place in the U.S., insurtech has gone global with the United Kingdom, Germany, China and India now being significant markets and other countries coming on.
Only about 14 percent of the insurtech deals in 2016 had an insurance industry investor or partner, although the industry’s participation has been rising every year. The report does find that insurers and reinsurers are also investing in other types of startups including in the areas of payments and data security.
As for the insurtech deals that took place in 2016, the three sectors of big data/analytics, AI and IoT collectively accounted for 56 percent – and approximately 70 percent of the total value invested.
However, according to the report, the combined number of deals across AI and the IoT increased 79 percent in 2016. Even though the two technologies represented only one-quarter (24 percent) of the 216 insurtech deals globally last year, the two sectors accounted for 44 percent or $711 million of total insurtech investment — compared with just 10 percent of global insurtech investment in 2015.
“We’ve seen a rapid acceleration of investment into and deal activity around intelligent automation and IoT start-ups over the last 12 months,” said Roy Jubraj, a co-author of the report and Accenture’s Digital & Innovation lead in the company’s Financial Services practice in the U.K. and Ireland. “These technologies…