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Insurtechs show 'resilience' despite pandemic challenges

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Australia’s insurance-focused digital ventures have displayed “maturity and resilience” in what has been a challenging period because of the pandemic disruption, according to Insurtech Australia.

The not-for-profit body says its latest ecosystem update of the industry shows the number of insurtechs increased 52% on last year to 85, with growth evident across all six key insurance spaces where their digital offerings are available.

The six categories are claims, smarter loss prevention, pricing and underwriting agility, efficient insurance administration, innovative marketing and distribution plus new products for better customer value.

Insurtech Australia CEO Rita Yates says when the first edition of the ecosystem was released in 2018, there were just 36 insurtechs.

“We have seen steady growth year on year,” Ms Yates told insuranceNEWS.com.au today.

“In line with this growth, Insurtech Australia has seen steady month-on-month growth within both our insurtech membership as well as corporate partnerships, with 28 current corporate partners.”

She says there has been a “maturity and resilience" in the industry throughout COVID-19 with "so many insurtechs not just surviving but thriving and more insurtech solutions continue to be developed”.

Many insurtechs continue to build on and add to their original propositions, targeting solutions to address the needs of the broader insurance industry, she says.

The ecosystem update released today is the result of a collaboration with EY that was announced in June, seeking participation from insurtechs about their activities.

Ms Yates says while the number of partnerships with incumbent insurers continues to grow, it is an area that still requires much focus in order for more progress to be achieved.

Partnerships with incumbents are “a critical element” for the success of the insurtech scene, she said.

Australia’s thriving insurtech sector coincides with a surge in funding raised globally by the sector.

Latest figures from Willis Towers Watson say a record $US4.8 billion ($6.5 billion) was raised in the June quarter, up 89% from the preceding quarter. The June numbers took first-half investment to $US7.4 billion ($10 billion), exceeding the $US7.1 billion ($9.6 billion) that was raised for all of last year.

Ms Yates says an ongoing challenge going forward for the industry is “a lack of local Australian insurtech funding”.

“However, we are thrilled to see the growth to date in the number and scope of insurtechs operating in the Australian market and we continue to be connected to both international insurtechs looking to scale into Australia as well as concept stage startups building products to solve problems within the insurance market,” Ms Yates said.

“We would love to reach the milestone of 100 insurtechs next year when we deliver the 2022 Australian Insurtech ecosystem map.”

Click here for the ecosystem map.