Investment in insurtech grew strongly between 2018-2019 and looked set to continue thriving until the pandemic hit in 2020. However, as of mid-2021, insurtech outliers are breaking the pandemic gloom and attracting some ground-breaking investment, says GlobalData, a leading data and analytics company.

Wefox, a German-based insurtech raised a $650m series C funding round and reached a $3bn evaluation on June 1, 2021. Wefox focuses on personal lines and utilizes data analytics to achieve a better loss ratio when measuring customers risks. Similarly, Bought By Many, a pet insurer using customers data to create tailored and flexible polices, has also raised $350m, reaching a $2bn evaluation in the same time period. Additionally, Wejo, a vehicle data analytics that can price consumers motor insurance premiums more accurately, launched a special purpose acquisition company (SPAC), raising $330m.

Jazmin Chong, Insurance Analyst at GlobalData, comments: “Pre-pandemic it was rare for insurtechs to raise hundreds of millions of dollars in one funding round, let alone be able to reach a one-billion-dollar evaluation. However, the pandemic has accelerated the demand for digital and personal insurance services and increasing consumer demand for digital services shows no sign of abating. More and more tech-centric players in the insurance space are now being able to raise enough funding and reach multi-billion-dollar evolutions. The success of insurtechs recent funding round proves that such startups have been able to insert themselves successfully into the insurance value chain.”

GlobalData’s Smart Money Analytics tool finds that global investment in insurance dropped by 17.3% in 2020 compared to the previous year, reaching a total value of $3.5bn. The drop emphasises the impact of COVD-19 and the economic uncertainty that left investors feeling wary. However, despite the drop, the tool also finds that not all insurtechs have been impacted by the pandemic’s economic slowdown equally. According to the tool, businesses focused on ‘enabling business solutions’ in insurance were the worst hit from investors, experiencing a 66.8% drop in investment for 2020 compared to 2019. On the other hand, insurtechs with a heavy focus in artificial intelligence (AI) combabilities experienced a 6.1% increase in investment for the same corresponding period.

Chong adds: “The diversion in insurtech investment for 2020 emphasises that certain insurtech themes are proving to be more essential since the COVID-19 outbreak. An area of interest has been product personalisation through data analytics and digital claims processes. Insurtechs that have focused on these areas have been able to continue thriving.

“As insurtech continues to grow, these companies could prove to be real contenders to the well-established insurers in the industry. The pandemic has made it clear that increasing consumer demand for digital services shows no sign of abating and that digitalization is the key to staying relevant in the future market environment.”