Global Insurtech investment reaches $2.55bn
By Asishana John
Willus Tower Watson has revealed that global investment in the insurtech sector rebounded from its COVID-19 related slowdown a year ago to hit a new quarterly high of $2.55 billion in the first quarter of 2021.
According to the report, which depicts the quarterly insurtech briefing, the number of investment megarounds reached eight, more than any previous quarter. During the quarter under review, total funding grew by 180 percent compared to the first quarter of 2020, which saw a steep decline in investment due to concerns about the pandemic.
The increment, when compared to fourth quarter 2020, depicts a 22 percent rise as the number of deals increased significantly by 42 percent during the period. The investment was driven primarily by Property and Casualty focused companies, which represents 69 percent of the deal share.
While early-stage deals recorded a 13 percentage point spike deals during fourth quarter 2020, Willis Towers Watson reported that 60 percent of investments in the first quarter of 2021 were Series A or B fundraisings across the globe – representing 24 countries from Nigeria, Brazil, United Arab Emirates, Bangladesh, Estonia and others – as the period saw most geographically diverse set of early-stage startups in a single quarter.
Speaking on the development, Andrew Johnson, global head of Insurtech at Willis Re said, “The record level of activity this quarter reflects our industry’s evermore widespread willingness to engage and adopt technology, which continues to grow at an unprecedented rate.
“Technological innovation gains ground only when a community emerges to support it, and COVID-19, more than any other factor, has rapidly accelerated the change that was already well underway. COVID-19 has helped strengthen the narrative, and demonstrably illustrate the results technology can deliver, which are not being achieved at scale.”
He also noted that the services offered by insurtech must make intellectual and commercial sense to their target users. “For them, the technology itself is the least interesting part of the initiatives. Unfortunately, a failure to understand these realities, in addition to the general difficulty of entering our industry as a nascent business, means that many insurtech will most likely never achieve the grandeur of their aspirations.” He said.
What this means for the future of Nigeria insurance industry: In a bid to fuel the low insurance penetration, recent times has seen insurtech spring up across Africa and Nigeria providing a different dimension to the operation of insurance in the continent. Nigeria’s Curacel, an AI-powered platform for claims processing and fraud management in Africa recently raised $450,000 pre-seed funding, Kenya’s insurtech service, Pula that works to derisk African smallholders farmers also raised $6 million. These amongst many others have reached an important milestone in terms of getting investment in insurtech.
Traditional insurance firms have learned to collaborate with big tech companies to offer swift insurance services alongside seamless experience to customers.
Also, the conversations around the use of technology to deepen insurance penetration has soared allowing for citizens to be properly educated on the concept of insurance and the products that suit individuals as well as businesses. An instance is the Insurtech Business Podcast Series, which features experts within Nigeria and outside of Africa.
Describing the future of insurtech in Africa, Adedamola Oloko, a proponent of insurtech in Africa, said that insurtech in Nigeria is very promising. “It’s very huge on the insurtech startup side. It very huge on the infrastructure side, because there are lots of things that the insurance companies would be looking to change and improve upon,” he said.
