Global InsurTech insights has met a very interesting juncture; at a macro-level, be swept up in the downgrading of public value, or represent a viable investment alternative to an investor’s portfolio that is otherwise being dragged into generalised bearishness, and at a micro-level; either capitalise on the availability of lower-priced assets or struggle to survive. 

InsurTech refers to technological innovations that are created and implemented to improve the efficiency of the insurance industry. InsurTech powers the creation, distribution, and administration of the insurance business. Insurtech is a combination of the words “insurance” and “technology,” inspired by the term fintech. 

The insurance industry has generally been a laggard when it comes to digital transformation. Yet a new class of venture-backed insurtech startups is beginning to disrupt incumbents by exploiting the weaknesses of the traditional insurance ecosystem. 

Insurtechs target primarily pure risk insurance, where they have developed access points to the value chain based on innovation. Technologies such as telematics and the Internet of Things have enabled new product development in motor, home, and health that drive customer engagement and retention.

Emerging tech companies across various sectors often face significant challenges during economic downturns, primarily due to the inherent vulnerabilities in their not-yet-profitable business models. In times of economic growth, venture and growth capital play a pivotal role in establishing their market value. 

However, this support wanes when economic optimism fades, particularly affecting consumer confidence, leading to a decrease in market value. 

This trend, while not exclusive to InsurTech, is notably pronounced in tech booms with highly inflated valuations. InsurTech companies have experienced a rapid reality check in terms of valuation adjustments in recent months. 

Beinsure Media highlights how InsurTech startups and new technologies are transforming the insurance landscape. 

Examples of Insurtech Solving Traditional Insurance Challenges: Claims management, Underwriting automation, Smart contracts, Fraud & risk prevention, Customer identification verification. 

Insurtech is the term given to companies and products that are using technology to innovate within the insurance industry. It comes from joining ‘insurance’ and ‘technology’, much like the word ‘fintech’. In fact, some people would describe insurtech as a subset of fintech. 

The InsurTech sector is witnessing transformative growth, with numerous InsurTech companies poised to redefine aspects of the insurance industry, some of which are already making significant impacts. As market conditions improve and businesses emerge from a phase of widespread skepticism, these InsurTech entities are expected to rise prominently, demonstrating remarkable resilience and innovation.

 If nothing else, the same conditions that are in part responsible for this most recent dip are actually validating and vindicating what a number of InsurTechs are looking to remedy, improve and even solve. For example, as mentioned, there is now an accelerated shift towards renewable energy. 

A number of InsurTechs are helping our industry to pioneer and forge a path forward that could literally revolutionise our industry. 

As traditional competitors seek to maintain market share, they are focusing on providing targeted products, improving customer onboarding processes and deepening their relationships with existing customers. 

These initiatives tend to take the form of investments, partnerships, and acquisitions. While these approaches may help improve incumbents’ competitive posture, they also drive opportunities for startups to help legacy providers fill the gaps in their offerings. 

Insurance securitization allows insurers to transfer underwritingrisks to the capital markets by creating tradeable financial instruments with cash flows tied to premium payments. Securitizing premium payments can generate upfront capital for insurers for regulatory compliance, funding operations, or reinforcing insurance capacity. 

However, the process is complicated and entails several areas of expertise including risk management, compliance, market monitoring, and valuation. 

Startups such as Ledger Investing seek to provide an end-to-end securitization platform to make it easier for insurers to securitize insurance products.