Insurance Technology Sector Overview – Q1 2018

The insurance technology sector has seen an abundance of activity over the past few years. As we previously analyzed, insurtech funding has shown early signs of maturation and its exit events have seen robust growth.

We will now do a deeper dive of the different components of insurance technology and how they make up this startup ecosystem. We have classified the companies into 14 categories. This blog post will illustrate what these categories are and which categories have the most companies. We will also look at how these categories compare with one another in terms of their funding and maturity.

Insurance Marketplace Is the Largest Insurance Technology Category

Let’s start off by looking at the Sector Map for the insurance technology sector. As of March 2018, we have classified 1503 insurance technology startups into 14 categories that have raised $22 billion. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Insurance Technology Sector Map

We see that Insurance Comparison/Marketplace is the largest category with 420 companies. These companies enable consumers to compare different insurance providers, or buy insurance of any kind (car to home to health). Some example companies are Goji, Policygenius, CoverHound, and Coverfox.

We have seen what the different categories making up this sector are and the number of companies in each. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Reinsurance Is the Heavyweight Category in Insurance Technology

Our Innovation Quadrant divides the insurance technology categories into four different quadrants.

Insurance Technology Innovation Quadrant

We see that the Pioneers quadrant has the most insurance technology categories with 10. The Pioneer categories are in the earlier stages of funding and maturity. The Disruptors quadrant includes Health Insurance, Auto Insurance, and Life, Home, P&C Insurance. These three categories have acquired significant financings at a young age. The Heavyweights quadrant contains the Reinsurance category. This category has reached maturity with significant financing. Reinsurance companies provide insurance products to other insurance companies to help them hedge their bets and streamline their costs. Some example companies are AnalyzeRe, PlaceRe, PeakRe, and EazyRe.

We’ve seen the insurance technology categories and their relative stages of innovation. Let’s now look at how they stack up against one another in terms of their total funding versus company counts.

Health Insurance Startups Have the Most Funding

The graph below shows the total amount of venture funding and company count in each category.

Insurance Technology Total Funding and Company Count

As noted earlier, Health Insurance, Auto Insurance, and Life, Home, P&C Insurance have the highest average funding per company. The above graphic highlights that these three categories also have the highest total funding in insurtech. Among the three categories, Health Insurance leads the sector with over $10 billion in total funding.

Health Insurance contains companies that offer health-related insurance products for consumers and businesses. Some of the best-funded companies in this category are Oscar Health ($893M), Zenefits ($584M), and Clover Health ($425M). It’s also noteworthy that the funding in Health Insurance is 28% higher than the funding in the next category, Life, Home, P&C Insurance.

Conclusion: Insurance Marketplace and Health Insurance Categories Lead Insurtech

From the above analysis, we can see that the Insurance Marketplace category leads the sector in total companies. The Health Insurance category leads the sector in total funding. On the other hand, the Reinsurance category stands out as the Heavyweight category in our Innovation Quadrant. It has reached maturity with significant average funding per company versus other categories. It’ll be interesting to see how the insurance technology landscape will change and develop throughout the rest of 2018.

To learn more about our complete insurance technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Backend and Auto Insurance Categories Lead Insurtech Exit Activity

Last quarter we reviewed insurance technology exit activity and saw its healthy upward trend. We are now going one step further on our insurtech report and research platform to examine exits by category. We conclude that the Insurance Backend and Auto Insurance categories are at the forefront of insurtech exit activity.

This conclusion was derived from two key data points:

• The Insurance Backend category leads in the number of exits
• The Auto Insurance category leads in acquisition amount

We’ll explore these takeaways in some more detail below.

To help set the stage, the graphic below shows insurtech exit activity over time. As you can see, the sector’s exit activity grew significantly over the past few years with a slight drop in 2017 from 2016.

Insurance Technology Exits by Quarter

Insurance Backend Leads Insurtech in the Number of Exits

The below graph highlights the number of insurtech exit events by category.

Insurance Technology Exit Counts by Category

This graph shows that the Insurance Backend category leads the sector with 50 exit events. Its exit activity is more than 1.5 times the next category, Insurance Marketplace, which has 32 exit events.

Insurance Backend contains companies that help insurance companies with their day-to-day operations. They include CRMs for insurance agents, communication tools for insurance companies, and claim filing tools for customers. Some example companies are CHSI Connections, ClaimKit, Shift Technology, and Unirisx.

Let’s now see how insurtech categories compare with one another by acquisition amount.

Auto Insurance Leads Insurtech in Acquisition Amount

The graph below shows the acquisition amounts in different insurtech categories.

Insurance Technology Acquisition Amounts by Category

We can see from this graph that the Auto Insurance category leads insurtech in total acquisition amount with over $16 billion. Auto Insurance companies offer car insurance and car telematics products. These products generally detect your mileage and driving behavior to customize your insurance plan. Some example companies in this category include Metromile, The Zebra, Clearcover, and Cuvva.

Auto Insurance has seen some large acquisitions in recent years. Esurance was acquired by the Allstate Corporation in May 2011 for $1 billion. DriveFactor was acquired by CCC Information Services in May 2015 for $22 million. Tempcover was acquired by Connection Capital in January 2018 for $16 million.

The acquisition amount in Auto Insurance represents 30% of all insurtech acquisition activity. It’s noteworthy that its acquisition amount is more than 1.7 times the next category, Enterprise Insurance, which has just under $10 billion.

Conclusion: Insurance Backend and Auto Insurance Lead Insurtech Exit Activity

In summary, we have examined insurtech exit activity by the number of exit events and acquisition amount. The Insurance Backend category leads the sector in the number of exit events. The Auto Insurance category leads in acquisition amount.

To learn more about our complete insurance technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Technology Startup Highlights – Q1 2018

Here is our Q1 2018 summary report on the Insurance Technology startup sector. The following report includes an overview, recent activity, and a category deep dive.

To learn more about our complete Insurance Technology report and research platform, visit us at www.venturescanner.com or contact info@venturescanner.com.

Insurance Technology Showing Early Signs of Maturation

Last quarter we saw that Insurance Technology (insurtech) funding continued on a healthy trend. This quarter we are going one level deeper on our insurtech research platform to examine its funding by round. From our analysis we can conclude that the insurtech sector is showing early signs of maturation.

This conclusion comes from two takeaways:

• Funding amounts are showing variable innovation
• Funding counts are shifting to mid-stage events

We’ll explain these takeaways with some graphics that show insurtech funding activity by round.

To help set the stage, the graphic below illustrates insurtech funding events over time. As you can see, the sector’s funding events saw consistent growth year over year.

Insurance Technology Funding Count by Quarter

Insurtech Funding Amounts Showing Variable Innovation

We’ll start off by examining the annual insurtech funding amounts. The below graph shows recent insurtech funding amounts in different rounds.

Insurance Technology Funding Amount by Round

Insurtech funding peaked in 2015, and has recovered slightly since. From this graph it’s clear that total insurtech funding for these rounds is up over the past 5 years.

Let’s look at the insurtech funding amount by round as a percentage, which shows changes independent of the total size.

Insurance Technology Funding Amount Percentages

As we can see, there is some rather noisy turbulence within insurtech funding over the past few years. Each funding stage took turns experiencing ups and downs.

These two graphics show that the insurtech funding amounts are shifting all over the place without any clear trends. Therefore we can conclude that there is variable innovation within the sector.

So we have seen the funding amounts graphs indicate variable innovation. Would the funding event count graphs show the same picture? Let’s examine them in the next section to find out.

Insurtech Funding Counts Shifting to Mid-Stage Events

Let’s now look at the annual insurtech funding event counts. The below graph shows the insurtech funding counts in different rounds over recent years.

Insurance Technology Funding Count by Round

The above graph shows that insurtech funding counts in all rounds saw steady growth from 2012 to 2017. This corresponds with the general upward trend seen in the insurtech funding amounts graph.

Let’s now look at the insurtech funding count by round as a percentage, which can show shifts more clearly.

Insurance Technology Funding Count Percentages

This graph shows that from 2012-2017, the Seed round funding count percentage dropped. To compensate for that decrease, the funding count percentages for Series B and Series C increased.

Specifically, the Seed round funding count dropped from 65% to 55% from 2012 to 2017. In contrast, the Series B funding count increased from 5% to 11%. The Series C funding count increased from 2% to 7%. The changes in all the other rounds were small enough to be negligible.

Combining these two graphics, we can see that insurtech funding counts shifted slightly from the Seed round to mid-stage from 2012 to 2017.

Conclusion: The Insurtech Sector Is Starting to Mature Slightly

In conclusion, we see that insurtech funding amounts are showing variable innovation in all directions. Meanwhile, insurtech funding counts saw an increase in mid-stage events. These observations led us to conclude that the insurtech sector is showing early signs of maturation. Overall funding counts continue to show growth, but investors are finding more mid-stage companies to bet on.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Insurance Technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Venture Scanner Sector Maps (Part 1 of 2)

Our sector maps are snapshots of emerging technology sectors. They show what the different categories in a sector are and how many startups are within each category. They also present a small sampling of the current startups that are innovating in each category.

We will share our most up-to-date sector maps in a two-part series. Below you will find sector maps for the Blockchain Technology, Energy Technology, Financial Technology, Health Technology, Insurance Technology, Video Technology, and 3D Printing sectors.

Blockchain Technology: 12 categories, 1007 companies, $6B in funding

Blockchain Technology Sector Map

Energy Technology: 12 categories, 790 companies, $63B in funding

Energy Technology Sector Map

Financial Technology: 16 categories, 2401 companies, $90B in funding

Financial Technology Sector Map

Health Technology: 22 categories, 2139 companies, $64B in funding

Health Technology Sector Map

Insurance Technology: 14 categories, 1503 companies, $22B in funding

Insurance Technology Sector Map

Video Technology: 11 categories, 828 companies, $35B in funding

Video Technology Sector Map

3D Printing: 9 categories, 383 companies, $2B in funding

3D Printing Sector Map

Stay tuned as we will release the remaining 8 updated sector maps for Artificial Intelligence, Internet of Things, Marketing Technology, Real Estate Technology, Retail Technology, Security Technology, Transportation Technology, and Virtual Reality.

To learn more about our complete report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Technology Funding Continues on a Healthy Trend

The Insurance Technology (insurtech) sector is seeing a lot of activity. How have its funding trends evolved over time? On our insurtech research platform, we have analyzed the data through 2017 and can conclude that the investments in insurtech continue on a healthy trend despite a decline in certain metrics.

We have come to this conclusion from the following three takeaways:

• The number of insurtech deals has been growing consistently year over year
• The number of insurtech investors participating in the deals has been on an upward trend
• Insurtech funding amounts have seen a decline over the last few years

We will illustrate these takeaways with a series of graphics to show the trend of insurtech investments over time.

Annual Insurtech Funding Events Growing Consistently

We will start off by examining the annual number of insurtech startup funding deals, stacked by quarters.

Insurance Technology Funding Count by Quarter

This graph illustrates that the number of insurtech funding events saw consistent growth year over year. Specifically, the CAGR in funding events from 2012 to 2017 is 26%. In addition, the number of funding events in 2017 was 108% of that in 2016.

We have seen that insurtech funding events are showing steady growth, but what about the investor interest in the sector?

Insurtech Investor Interest Has Been Growing

To gauge how investors are feeling, let’s look at the total number of insurtech investors who participated in each financing round.

Insurance Technology Total Number of Investors

This graph shows that insurtech investor interest has been growing for the past few years and then leveled off in 2017. The CAGR in the number of participating investors from 2012-2017 is 39%, and the 2017 total has declined from the 2016 total by 3%.

We have seen that insurtech funding events are increasing steadily and investor interest is seeing growth for the most part. Let’s now examine the funding amounts at the annual level to complete the picture on the state of insurtech investment.

Insurtech Funding Amounts Declining Over the Last Few Years

Let’s now analyze the insurtech funding amounts over the years stacked by quarters.

Insurance Technology Funding by Quarter

Upon first glance, insurtech funding amounts saw explosive growth up until 2014 and then declined steadily year by year afterwards. In fact, the CAGR in funding amounts from 2012 to 2017 is 25%. Moreover, the funding in 2017 was only 81% of that in 2016.

Yet upon closer analysis, we find that the massive funding amounts in 2014 and 2015 were caused by a couple large outlier funding rounds in the sector. In Q4 2014, the Chinese insurance company Ping An raised a $4.75 billion post-IPO equity round. In Q2 2015, companies such as ZhongAn, Zenefits, and Oscar Health collectively raised $1.58 billion. These large outlier funding events all had a skewing effect upon the trend of annual insurtech funding amounts.

Conclusion: Despite Some Metrics Declining, Insurtech Funding Continues on a Healthy Trend

In summary, the above graphics show that insurtech funding events experienced steady growth at the annual level, and its investor interest is generally increasing. However, insurtech funding amounts have seen a decline in recent years, largely as a result of some outlier funding rounds. These takeaways lead us to conclude that insurtech funding is showing general signs of health. It’ll be interesting to see how this sector’s investment trend turns out in 2018.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Insurance Technology research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Technology Sector Overview – Q4 2017

The Insurance Technology sector (insurtech) is one of the hottest technology sectors and has seen funding and exit momentum over the past few years. Yet what are the different components of insurtech and how do they make up this startup ecosystem? On our insurtech research platform, we have classified the companies in the sector into functional categories. This blog post examines these categories and how they compare with one another through a series of graphics.

Insurance Comparison/Marketplace Is the Largest Insurtech Category

Let’s start off by looking at the Logo Map for the Insurance Technology sector. As of January 2018, we have classified 1,422 insurtech startups into 14 categories which collectively raised $19 billion in funding. The Logo Map highlights the number of companies in each category and a random sampling of these companies.

Insurance Technology Logo Map

We can see from the Logo Map above that Insurance Comparison/Marketplace is the largest insurtech category with 406 companies. This category is comprised of companies that serve as a marketplace for consumers to buy insurance of any kind (from car to home to health), or to compare different insurance providers. Some example companies in this category include CoverHound, Goji, PolicyGenius, and Coverfox Insurance.

We have seen what the different categories in insurtech are and how many companies are within each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.

Most of the Insurance Technology Categories Are Pioneers

Our Innovation Quadrant for the insurtech sector divides the categories within the sector into four different quadrants according to their average funding and average age. The Heavyweights are the companies that have reached maturity with significant financing. The Established are those that have reached maturity with less financing. The Disruptors are less mature but with significant financing. The Pioneers are less mature and with earlier stages of financing.

Insurance Technology Innovation Quadrant

We can see from our Innovation Quadrant above that most of the categories within Insurance Technology belong in the Pioneers quadrant. The Health Insurance, Auto Insurance, and Life, Home, P&C Insurance categories have raised more funding and thus made their way into the Disruptors quadrant. The Reinsurance category is in the Heavyweights quadrant for having reached maturity with significant financing.

We’ve now seen how the insurtech sector is categorized and the relative stages of innovation for those categories. How do these categories stack up against one another in a holistic view? Let’s look at the Total Funding and Company Count Graph.

Health Insurance Startups Have the Most Funding

The graph below shows the total amount of venture funding and company count in each insurtech category.

Insurance Technology Total Funding and Company Count

We can see from the graph above that while Insurance Comparison/Marketplace has the most companies in the insurtech sector with 406 companies, it’s the Health Insurance category that leads the sector in total funding with around $10 billion. The Health Insurance category is comprised of companies that offer health or travel insurance, either for individuals or for businesses. Some example companies in this category include Oscar Health, InstaMed, Patientco, and SimplyInsured.

Conclusion: Most Insurtech Categories Have Large Growth Potential

The graphics above indicate that most of the insurtech categories are still in their infancy in terms of their funding and maturity. In addition, the sector is bustling with a good number of Insurance Comparison/Marketplace companies. Yet the Health Insurance category has received the most funding. It will be interesting to see if this trend continues in 2018.

What are your thoughts on this? Let us know in the comments section below.

To learn more about our complete Insurance Technology report and research platform, visit us at www.venturescanner.com or contact us at info@venturescanner.com.