Insurtech Global Outlook

2023

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2022 was again a time marked by uncertainty: Geopolitical instability, climate change, economic and energy crisis have changed the expected year of normalization after the pandemic’s recovery.

INSURTECH 2023

2023 Highlights plus

Market uncertainty in 2022 affected investment priorities. Full-stack disruptors will likely suffer due to the significant capital they need to handle their low profitability. North America still leads the way in funding, while European Insurtechs target higher profitability markets.

1. Sustainable World plus

Insurance plays a pivotal role in the global climate change crisis. The ability to predict, manage and mitigate climate risks will have a massive impact on populations and their long-term well-being. Current players focused on improving these capabilities will succeed in the near future.

2. Smart Distribution plus

Embedded Insurance is a cost-effective way to increase sales and revenues in the industry. It is a 3 trillion market opportunity that has become the distribution model with the highest growth in recent years; enabled through cloud-connected platforms and open APIs, and led by Insurtechs and Tech Giants.

3. Digital Risks plus

Cyber crime presents a major risk in our increasingly digitised world. Criminals search for new sources of revenue in identity theft, ransomware, malware and phishing. In this environment, the implication of incumbents and new players with cyber insurance will help protect private and public entities.

4. Next Level Underwriting plus

Insurance has historically been perceived as a commodity. Additionally, the consequences of a world with low insurance penetration can be severe in uncertain times. New underwriting models can reduce costs and claims payouts, which enables competitive pricing and higher customer engagement.

5. Companies That Care plus

The COVID-19 pandemic has accelerated digitisation and precipitated a change in our lifestyles and habits, putting health at the centre. This reality has boosted multiple existing or emerging trends in the Healthcare ecosystem, which bring new opportunities and challenges for employers.

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2023 Highlights

Market uncertainty in 2022 affected investment priorities. Full-stack disruptors will likely suffer due to the significant capital they need to handle their low profitability. North America still leads the way in funding, while European Insurtechs target higher profitability markets.

01

Sustainable World

Insurance plays a pivotal role in the global climate change crisis. The ability to predict, manage and mitigate climate risks will have a massive impact on populations and their long-term well-being. Current players focused on improving these capabilities will succeed in the near future.

02

Smart Distribution

Embedded Insurance is a cost-effective way to increase sales and revenues in the industry. It is a 3 trillion market opportunity that has become the distribution model with the highest growth in recent years; enabled through cloud-connected platforms and open APIs, and led by Insurtechs and Tech Giants.

03

Digital Risks

Cyber crime presents a major risk in our increasingly digitised world. Criminals search for new sources of revenue in identity theft, ransomware, malware and phishing. In this environment, the implication of incumbents and new players with cyber insurance will help protect private and public entities.

04

Next Level Underwriting

Insurance has historically been perceived as a commodity. Additionally, the consequences of a world with low insurance penetration can be severe in uncertain times. New underwriting models can reduce costs and claims payouts, which enables competitive pricing and higher customer engagement.

05

Companies That Care

The COVID-19 pandemic has accelerated digitisation and precipitated a change in our lifestyles and habits, putting health at the centre. This reality has boosted multiple existing or emerging trends in the Healthcare ecosystem, which bring new opportunities and challenges for employers.

INSURTECH 2023 Highlights

The insurance industry is being pushed to an unprecedented change: energy transition, digitisation and climate crisis are creating opportunities to transform a traditional and legacy-driven industry. Amongst the challenges observed in 2022, Climate Change, Cybersecurity, Embedded Insurance, Corporate Care and Connected Underwriting are on top.

The current global crisis and economic uncertainty have affected investor's priorities, resulting in a significant fall in Insurtechs' valuations. Industry disruptors that tried to substitute established full stack carriers, or explore Traditional Lines of Business, have faced financially challenging times. More established innovators are receiving more support from the ecosystem.

Traditional Lines of Business have a huge weight on the overall funding amount. By exploring Non-traditional LoB, we can extract specifics on what the market is betting on in times of crisis. 

The technologies with the highest growth in 2022 are IoT, Analytics, API, Predictive Analytics and Health Diagnostics. They solve distinctive challenges in the insurance industry: accurate risk modelling and pricing, better customer experience in third-party platforms, comprehensive risk assessment and cost reduction.

Insurance investors followed the new world framework after the pandemic with the change in customer habits and its challenges. Insurers’ bets concentrated on protecting businesses and their employees, focusing on trends such as cybersecurity, climate risks or employee well-being.

The insurance marketplace goes beyond carriers and customers, creating the opportunity for many participants to seamlessly connect with each other, and also digitise and distribute insurance data to enhance customer experience, risk assessment and claims.

Focusing on automation to improve profitability is a very efficient way to attract new partnerships with Insurtechs.

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1. Sustainable world

Insight 01

How does climate change force insurers to adapt to the new reality?

Climate change is causing an exponential increase in the frequency and intensity of catastrophic events.

Losses due to extreme climate events total $316 billion annually, and around two-thirds of them are currently uninsured.

Most insurers are moderately prepared for climate change events and just a few are considered prepared.

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“Developing actions to assess and mitigate climate risks is one of the top priorities for insurance carriers and regulators”

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Insight 02

Insurers are developing new climate-focused solutions

Creating new risk transfer solutions

with AI-driven platforms for physical risk analysis and mitigation.

Insuring the net-zero transition

adopting low-carbon oriented

services.

Building climate-resilience services

with ESG evaluation systems for responsible investments.

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Insight 03

New investors in climate tech

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AXA

The company has invested in AI services for properties (Cape Analytics), alternative energies (Green Struxture, Eranove) and IoT tracking and analysis for shipments (Tive).

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Generali

In 2022, the insurer partnered with UNDP on digitally enabled parametric insurance solutions for the world’s vulnerable communities and businesses.

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Ping-An

Their net-zero strategy included launching a new ESG evaluation system powered by NLP, a platform to mitigate risks in agriculture, and an app for EV owners.

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Insight 04

Developing a net-zero insurance strategy

  • Engaging the community

  • Promoting and incentivising low carbon services and solutions

01

Implementing

new parametric coverage through technologies, such as IoT and AI, will accelerate risk prevention while drastically reducing the time for payouts and operational costs. 

02

Incorporating

different ESG scoring systems and standards that can be applied to the entire business and dictate investment priorities.

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1. Sustainable world plus

Insight 01

How does climate change force insurers to adapt to the new reality?

Climate change is causing an exponential increase in the frequency and intensity of catastrophic events.

Losses due to extreme climate events total $316 billion annually, and around two-thirds of them are currently uninsured.

Most insurers are moderately prepared for climate change events and just a few are considered prepared.

image
SHARE THIS INSIGHT
twitterlinkedinfacebookshare

“Developing actions to assess and mitigate climate risks is one of the top priorities for insurance carriers and regulators”

image
SHARE THIS INSIGHT
twitterlinkedinfacebookshare
Insight 03

Insurers are developing new climate-focused solutions

Creating new risk transfer solutions

with AI-driven platforms for physical risk analysis and mitigation.

Insuring the net-zero transition

adopting low-carbon oriented

services.

Building climate-resilience services

with ESG evaluation systems for responsible investments.

SHARE THIS INSIGHT
twitterlinkedinfacebookshare
Insight 04

New investors in climate tech

image

AXA

The company has invested in AI services for properties (Cape Analytics), alternative energies (Green Struxture, Eranove) and IoT tracking and analysis for shipments (Tive).

image

Generali

In 2022, the insurer partnered with UNDP on digitally enabled parametric insurance solutions for the world’s vulnerable communities and businesses.

image

Ping-An

Their net-zero strategy included launching a new ESG evaluation system powered by NLP, a platform to mitigate risks in agriculture, and an app for EV owners.

SHARE THIS INSIGHT
twitterlinkedinfacebookshare
Insight 05

Developing a net-zero insurance strategy

  • Engaging the community

  • Promoting and incentivising low carbon services and solutions

01

Implementing

new parametric coverage through technologies, such as IoT and AI, will accelerate risk prevention while drastically reducing the time for payouts and operational costs. 

02

Incorporating

different ESG scoring systems and standards that can be applied to the entire business and dictate investment priorities.

SHARE THIS INSIGHT
twitterlinkedin