Insurtech Market Overview and How It Could Transform the Insurance Industry

Industry Overview

Insurtech is a revolutionary technological innovation that is currently changing the landscape of the insurance industry. The COVID-19 pandemic facilitated the digitalization of the insurance industry, since most insurers had to interact with their customers remotely. New approaches are being developed to digitize traditional practices like claims management and underwriting.

The current data era makes cloud computing, predictive analytics, telematics, and APIs favorable technologies for startups to make the traditional insurance industry more streamlined, adaptable and affordable. Insurance continues to make up a huge part of the global economy. Total direct written premiums (DWP) in 2020 were estimated to have reached $6.1 trillion, or 7.2% of the global GDP. While the industry is large, it is still largely fragmented due to local level regulations in many countries. Fragmentation drives opportunities which can be optimized by fast-moving Insurtech companies entering the market.

Q1 2021 Timeline and VC Activity

  • 1/15/2021: Favorable UK Supreme Court ruling for policyholders who seek to claim for business interruption losses caused by the COVID-19 pandemic and related shutdown.

  • 2/1/2021: Coalition raised $175 million in Series D led by Index Ventures. The company is valued at almost $1.8 billion after this round funding, 1.8X in just eight months.

  • 2/10/2021: Lemonade kept expanding its product, this time by launching life insurance.

  • 3/3/2021: Health insurer Oscar held an IPO, raising over $1.4 billion, and recorded the largest VC exit in Insurtech.

  • 3/18/2021: Amazon started offering small business insurance to its Business Prime members.

  • 3/31/2021: Next Insurance completed series F round and raised $250 million. It reached $4 billion valuation.

In Q1 2021, Insurtech companies globally raised $2.2 billion across 110 deals, a 5.6% QoQ increase. Valuations in the quarter increased across all venture stages. The median early-stage pre-money valuation of $24 million increased by 25% to $30 million for full-year 2020.Emerging Opportunities

Embedded Insurance

The distribution and management of insurance within a non-insurance product or digital ecosystem.

  • Trōv is a global leader in embedded insurance, powering the future of digital insurance distribution and emerging mobility. Its robust Insurtech platform empowers financial institutions and insurance incumbents to rapidly deploy modern solutions for homeowners, renters, drivers and small businesses insurance providers to instantly serve up and underwrite policies.

  • Briza offers a platform that aggregates quotes and binds from carriers and automated underwriting models into a single API. The model gives them ability to cross-sell insurance products within its platform.

  • Qover is an IaaS and a full-stack insurance provider that offers end-to-end embedded insurance management.

  • Boost, Cover Genius, and are examples of developer-focused insurance API providers.

Cyber Insurance

An astounding 42% of businesses do not have sufficient insurance coverage on cyberattack, and with the changing nature of cyber-attacks, businesses are vulnerable to gaps in coverage.

Cyber insurers are pursuing market opportunities; for example, a Server Message Block (SMB) focus is notably one of the biggest opportunities in the current market. Typically, SMBs have the most exposure to cyber risk.

  • Coalition provides cyber insurance that covers cyberattacks as well as technology failures. The company’s cybersecurity platform prevents ransomware, constantly monitors threats, and mitigates distributed denial of service (DDoS) attacks.

  • Corvus’s preventative measures conduct a non-invasive IT scan and recommend major vulnerabilities to fix prior to starting coverage.

Select Company Highlights

Route is a shipping platform designed to provide shipping protection and tracking for merchants. The platform insures shipped-order to ensure a great post-purchase experience for customers. It reimburses customers for no-show product, product that gets damaged in transit, or is stolen from customers’ porch.

Noyo is the complete API solution for benefits software, transforming data exchange across the insurance ecosystem. Integrate with Noyo and connect to a new world of benefits. Noyo develops a health insurance platform that secures exchange of data between insurers, brokers, and consumers. The platform integrates APIs to allows benefits platforms to connect with insurance carriers including Ameritas, Humana, and Sun Life.

About Us:

Bridge Point Capital is a private equity firm based in New York, with a focus on U.S.-Asia cross-border investments. We specialize in investing in disruptive mid- to late-stage healthcare companies that can benefit from penetrating the vast, yet unexplored Asian healthcare market. We aim to leverage our expertise in both healthcare and capital markets, to establish a lucrative investment platform for our investors.