Insurance Technology Innovation Primed For Growth

The insurance technology (insurtech) sector has seen much technological and investment development over the past few years. Traditional insurance business lines such as health, auto, and commercial are being revolutionized by new digital-centric startups. New technologies such as AI and IoT are re-architecting insurance data, the underpinning of the insurance industry. New business models, such as P2P and on-demand insurance, are disrupting the entire ecosystem on all fronts.

This blog post aims to examine how the rest of 2019 can shape up for the insurance technology industry. After conducting a thorough analysis of the sector, we have arrived at three predictions for 2019:

  • 2019 will see the highest insurtech funding on record
  • Health insurance technology will continue to dominate the industry
  • Insurtech startups will scale up in 2019

Prediction 1: 2019 Will See The Highest Insurtech Funding On Record

The graph below shows the total VC funding into insurtech startups by year.

Insurance Technology Funding Over Time
Insurance Technology Funding Over Time

As you can see, insurtech funding is on a general upward trend with a 5-year CAGR of 19%.

What’s most noteworthy on the chart is Q1 2019 funding coming in at $1.7B, a whopping 2.5 times higher than Q1 2018 and the best yearly start to date. A straight line projection would put the full 2019 funding at $6.7B, which would represent a 70% year-over-year growth and the highest annual funding on record. The largest insurtech funding events in Q1 2019 include a $500M round into Clover Health, a $129M round into FRIDAY, and a $125M round into the Wefox Group.

The dramatic funding growth and our 2019 projection demonstrate investor confidence in technology startups fundamentally advancing the insurance industry.

Prediction 2: Health Insurance Technology Will Continue To Dominate The Industry

Venture Scanner classifies chaotic startup landscapes into understandable groupings. These groupings are organized by functional categories, which are intended to get at the core offering of the startups categorized therein. For insurtech, we have broken the sector down into 14 functional categories. Analyzing them reveals a clearly dominant function: health insurance technology.

Insurance Technology Funding By Category
Insurance Technology Funding By Category

Health insurance technology startups lead the insurtech sector in overall funding at $8B. This category accounts for 33% of all insurtech funding and has almost twice the funding of the second highest category–life, home, P&C insurance. In addition, health insurance technology startups raised the most funding this past quarter (Q1 2019) at $650M. Some of the largest funding rounds into health insurance in Q1 2019 include a $500M Series E into Clover Health, a $74M Series B into Shuidihuzhu, and a $45M Series B into Alan.

Health insurance technology startups focus on producing innovative business models and technology products. A notable example in the space is Oscar Health. They provide customized health insurance plans for individuals and businesses. Their website and mobile app enable you to manage all your health information and access doctors 24/7. The Oscar Health mobile app also incentivizes healthy behavior. For example, it tracks your daily steps and if you meet your daily step goal, you earn money for gift cards.

Prediction 3: Insurtech Startups Will Scale Up In 2019

Our third prediction is that insurtech funding events will shift to later-stage financings as a result of insurtech startups experiencing increased market traction. Over the past 5 years, seed-stage funding events made up roughly 50% of all funding events into insurtech. In Q1 2019, seed-stage events dropped to 20%, while mid and later-stage funding events grew to represent a much larger portion of total funding events.

By the same token, the average funding per deal in insurtech has been growing steadily. Specifically, over the last 5 years, average funding has grown from $9M to $39M per deal.

The movement towards later-stage funding events and an increase in average deal sizes lead to the natural prediction that insurtech startups will continue to gain traction in the coming years. Realizing that their returns are directly tied to the scale of their bets, VCs are not hesitating to double down on their investment sizes to gamble for greater payoffs. These follow-on bets in the form of later-stage investments will help insurtech startups scale their operations and amplify their market share.

Conclusion: 2019 Will See Unprecedented Innovation In Insurtech

In conclusion, the observations and analyses above lead us to predict that insurtech startups are primed for explosive growth, scaling, and maturation. We predict that 2019 will be the highest funded year on record, that health insurance technology startups will continue to dominate the industry, and that insurtech funding events will increase in maturity and size over time.

Venture Scanner is Research Reinvented. To learn more about how our dynamic reports can provide the insights you need to innovate, visit www.venturescanner.com or contact us at info@venturescanner.com.

Insurance Technology Sector Overview – Q1 2019

This blog post examines the different components of the insurance technology (insurtech) ecosystem. We will illustrate what the categories of innovation are and which categories have the most companies. We will also compare the categories in terms of their funding and maturity.

Insurance Comparison/Marketplace Is The Largest Insurance Technology Category

Let’s start off by looking at the Sector Map. We have classified 1,541 insurtech startups into 14 categories. They have raised $28B from 1,447 investors. The Sector Map highlights the number of companies in each category. It also shows a random sampling of companies in each category.

Insurance Technology Logo Map
Insurance Technology Logo Map

We see that Insurance Comparison/Marketplace is the largest category with 416 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.

Let’s now look at our Innovation Quadrant to find out the funding and maturity of these categories in relation to one another.

The Pioneers Quadrant Has the Most Insurance Technology Categories

Our Innovation Quadrant divides the insurtech categories into four different quadrants.

Insurance Technology Innovation Quadrant
Insurance Technology Innovation Quadrant

We see that the Pioneers quadrant has the most number of insurtech categories at 10, accounting for 71% of all insurtech categories. The Reinsurance category has the highest average age, and the Auto Insurance category has the highest average funding. On the other hand, the P2P Insurance and Consumer Management Platforms categories are low on both average funding and age.

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

Insurance Technology Report Highlights  – Q4 2018

Here is our Q4 2018 summary report on the insurance technology startup sector. The following report includes a sector overview and recent activity.

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

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
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
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-companies
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 Technology Startup Market Highlights  – Q3 2017

Here is our Q3 2017 summary report on the Insurance Technology startup sector. The following report includes a startup landscape overview, graphical trends with insights, and recent funding and exit events.

We are currently tracking 1450 Insurance Technology companies in 14 categories across 61 countries, with a total of $19.5 Billion in funding. Click here to learn more about the full Insurance Technology market report.

Insurance Technology Company Total Funding By Vintage Year

The following infographic summarizes Insurance Technology companies’ total funding by the vintage year they were founded in. You could see that Insurance Technology companies founded from 2013 to the present are in the lead by raising a total of $1.5 Billion funding up to date. At Venture Scanner, we are currently tracking over 526 Insurance Technology companies in 13 categories across 47 countries, with a total of $3.93 Billion in funding. To see the full list of 526 Insurance Technology companies, contact us using the form on www.venturescanner.com.

Insurance Tech Vintage Year

Venture Scanner enables corporations to research, identify, and connect with the most innovative technologies and companies. We do this through a unique combination of our data, technology, and expert analysts. If you have any questions, reach out to info@venturescanner.com.

Making Sense of the Health Technology Ecosystem

At this time, we are tracking 812 Health Technology companies across 23 categories, with a combined funding amount of $14.2B.

This sector covers companies that combine IT with healthcare to enhance well-being. This includes digital technologies and services such as mobile connectivity, biometric sensors, cloud computing, social networking, robotics, etc. that are affecting all fronts of healthcare such as hospital management, doctor-patient relationships, peer-to-peer support groups, and personal fitness.

Below you’ll find our Health Tech sector map as well as the categorical breakdown of the sector.

Health Technology Sector Map
Health Technology Sector Map

Clinical Administration and Backend: Services that foster management of administrative tasks such as scheduling, patient transfers, billing, compliance, etc.

Digital Medical Devices & Diagnostics: New generation of IT-enabled medical devices and diagnostic tools for use by doctors and other clinical staff.

Population Health Management: Services to manage healthcare issues for groups of people such as corporate employees.

Genomics and Personalized Medicine: Services that utilize human genome data for analytics, disease prevention, and the like.

Electronic Health/Medical Records: Services that create or manage EHR/EMR (Electronic Health/Medical Records) to improve efficiency/effectiveness of medical practice.

Doctor Network and Resources: Social services that allow doctors to connect with each other to get in dialogue and/or access their expertise.

Medical Big Data: Big data and analytics for medical applications.

IoT Health Care: Internet of Things (IoT) focused on consumer and/or at-home health care solutions.

Doctor and Healthcare Service Search: Services that allow patients to search for doctors, healthcare plans, and other healthcare services.

Remote Monitoring and Family Care Management: Services that allow families and medical professionals to monitor and manage those in care (ie. senior citizens).

teleHealth: Services that allow remote treatment and/or consultation between doctors and patients.

Online Health Destination Sites: Websites providing health-related information and resources.

Health Insurance and Payments: Health insurance exchanges, benefits and patient payment management platforms focused on providing more efficient workflow and greater transparency.

Patient Engagement and Education: Services and platforms such as In-Hospital multimedia systems and patient relationship management services.

Mobile Fitness/Health Apps: Mobile apps that keep track of fitness activities, provide health resources, training programs, etc.

IoT Fitness: Internet of Things (IoT) focused on personal fitness and wellness solutions.

Online Health Communities: Social services among patient groups and medical professionals.

Healthcare Marketing and Campaign Management: Services for hospitals, insurance agencies, and other healthcare services to identify and target potential customers.

Healthcare Mobile Communications/Messaging: Mobile communications services dedicated for hospital use by doctors, nurses, etc.

Gamification of Health: Application of game elements to promote behavior-changing health and wellness.

Healthcare Robotics: Robotics application for healthcare such as prosthetics, remote treatment, etc.

Healthcare Startup Incubators and Accelerators: Investor programs that fund and support Digital Health startups.

Venture Scanner enables corporations to research, identify, and connect with the most innovative technologies and companies. We do this through a unique combination of our data, technology, and expert analysts. If you have any questions, reach out to info@venturescanner.com.