InsurTech Funding: More than 2.65 billion US-Dollars raised in 2015!
- InsurTech categories Marketplace/Aggregator and Insurance Management received the highest funding
- The importance of InsurTech companies in the German market is increasing, but still far off the US market in terms of funding round size
Munich, 3rd March 2016 | For the first time ever, Finanzchef24 is publishing an overview of funding rounds for InsurTech companies (insurance technology) in 2015. The German InsurTech company took a look at other startups as well as established companies, comparing the markets in Germany, UK and USA. The overall result: So far, over 4.5 billion US-Dollars have been invested in digital insurance companies worldwide. In 2015 alone, InsurTech companies raised over 2.65 billion US-Dollars. “The level of funding shows us that investors have recognized the potential of InsurTech companies”, says Felix Schollmeier, co-founder and co-CEO of Finanzchef24. “InsurTech doesn’t represent a short-term phenomenon; it will play an essential part in the future of the insurance industry.”
The InsurTech business models can be classified into five categories:
- Marketplace/Aggregator: distribution model with multiple insurance companies/and or products
- Insurance Management: primary focus is on contract and policy management; ranges from mobile-first “digital folders” to enterprise healthcare plans management
- Direct Insurer/Tied Agent: distribution model with a single (or at most a few limited) insurance company (companies)
- Peer-2-Peer/Cashback: distribution model focusing on products that reimburse (partial) insurance premiums or where claims and damages are shared among a closed buyer group
- Sales Tools/Software: insurance tech companies offering tools and software to insurance-related third parties, e.g. insurance companies and brokers
The insurance tech companies are each targeting a different audience: B2B, B2C or Broker. The Health sector is functioning as a special category for the US market.
InsurTech categories Marketplace/Aggregator and Insurance Management received the highest funding
Startups and established insurance tech companies within the categories Marketplace/Aggregator and Insurance Management raised well over 500 million US-Dollars – mainly in the US market. Within these categories, the highest funding was conducted in B2B-business models and the health insurance sector. “The relevance of InsurTech companies, especially in the US, is clearly demonstrated by the high level of funding in established companies such as Insureon or CoverHound”, explains Felix Schollmeier. “Whereas in Germany, established InsurTech companies received only little financial support – and if so, they didn’t receive a comparable level of funding.”
The importance of InsurTech companies in the German market is increasing
In the German market, startups raised more investments compared to established companies. Although the amount of money was much lower than in the United States, “the numbers are still quite impressive and growing”, Schollmeier summarizes. In total, insurance tech startups in the German market received more than 30 million US-Dollars. In particular, companies within the categories Marketplace/Aggregator and Insurance Management, targeting a B2C-audience, had the highest funding. This is contrary to the development in the US market, where the majority of investments went into B2B-business models and the health insurance sector, two areas that are only just beginning to develop in Germany.
Monitoring further development of the industry
A year from now, Finanzchef24 plans to release an updated overview of funding rounds for the year 2016. “We want to observe the long-term development in the insurance tech market”, says Schollmeier, “and we are very excited to learn how much money the InsurTech industry will be raising in 2016. In 2017, we anticipate to see stronger trends.”
Disclaimer: Numbers and facts were taken from press releases of the respective companies as well as CB Insights, Crunchbase and Venture Scanner (all databases connected to the current subject). The infographic provides an overview of the insurance tech industry as well as funding rounds. No claim is made that this is a complete listing.
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Further information about Finanzchef24: Unternehmen.