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STATE OFINSURTECHJohn Cusano
March 2, 2018
INSURANCEINNOVATIONEXECUTIVEBOARD
UPDATE ON INSURTECHINVESTMENT
Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 4
THE INSURTECH LANDSCAPE IS GROWING WITH CLOSE TO $8.7 BILLION INVESTED TO DATE
5%
Microinsurance Platform
1%
Core Insurance Solution/Platform43%
Others
4%
Employee Benefits Platform
10%
Digital Agency/Broker37%
Digital Insurer
331
238
152110
69514018
483COMPANIES1
$8.7BINVESTED3
1,009DEALS
NUMBER OF DEALS
% OF COMPANIES BY INSURANCE SECTOR
% OF COMPANIES BY CLASS OF INSURTECH
(1) Considering currently active companies, independent and acquired(2) Based on number of deals(3) The invested amount has not been disclosed for 254 deals out of 1,009 (25% of the database)
2013
334
2012
348
100
130
1,676
2016
1,754
400103
160
1,091
2015
2,721
931
500
145
1,145
2014
882
2017
2,316
230160120
2011
171
2010
145
Zenefits
Lemonade
Bright Health
GryphonOscar Health
MetroMile
Clover Health
Castlight Health
<$100M
Zhong An
FUNDING $M
Travel
1%
P&C 42%
Multiline
28%
Life & Annuities8%
Health
21%
1%
Reinsurance
52%2010-17 CAGR2
CUMULATIVE 2010-2017
Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 5
NORTH AMERICA REMAINS THE LARGEST MARKET FOR INSURTECH INVESTMENTS
US245 companies611 deals$5.9B
CHINA28 companies35 deals$1.3B
LATAM12 companies22 deals$36.3M
ANZK5 companies7 deals$5.5M
MART24 companies43 deals$50.8M
CANADA12 companies20 deals$47.8M
EUROPE126 companies218 deals$958M
INDIA15 companies29 deals$303M
JAPAN3 companies4 deals$4.9M
ASEAN13 companies19 deals$54.6M
Country – Companies/Deals/VolumeUK – 45/85/$406MGermany – 21/36/$123MFrance – 16/26/$93MSwitzerland – 6/8/$41MSweden – 6/12/$185MSpain – 6/10/$34MNetherlands – 5/8/$39MItaly – 4/8/$5.8MPortugal – 3/3/NADenmark - 3/4/$23MIsrael – 2/5/$1.2MBelgium – 2/2/$7.2MIreland – 2/3/$40KNorway – 2/2/$120KBulgaria – 1/1/NAEstonia – 1/3/$1.8KPoland – 1/2/NA
- Considering currently active companies, independent and acquired- The bubble size reflects the total invested volume between 2010 and 2017 and include the effect of deals >$100M- The invested amount has not been disclosed for 254 deals out of 1,009 (25% of the database)
CUMULATIVE 2010-2017
7671
96
89
55
67
43
73
50
363333
25
3328
24
12
21
14
22
14121213
61113
105454
Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 6
INSURTECH DEALFLOW
Qtr2Qtr2Qtr1Qtr4Qtr3Qtr2 Qtr1Qtr4 Qtr4Qtr3Qtr1 Qtr4Qtr1Qtr4Qtr3Qtr2 Qtr1Qtr2 Qtr3 Qtr2Qtr1 Qtr3Qtr3Qtr2Qtr1Qtr4Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4
2010 2011 2012 2013 2014 2015 2016 2017
18 deals 40 deals+122% yoy
51 deals+28% yoy
69 deals+35% yoy
110 deals+59% yoy
152 deals+38% yoy
238 deals+57% yoy
331 deals+39% yoy
THE NUMBER OF INSURTECH DEALS WAS UP +39% YOY IN 2017 CONTINUING WITH THE STRONG GROWTH COURSE OF PRIOR YEARS
▪ 2010-17 CAGR = 52%
▪ 2014-17 CAGR = 44%
Invested volumes totalled $2.3b in 2017, surpassing the $2b mark for the second time after the 2015 $2.7b record. Excluding deals >$100m, the invested volume was the largest in any given year, totalling $1.7b, and above the $1b threshold for the third consecutive year in a row.
Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 7
INSURTECH FINANCING TRENDS
FUNDING VOLUME (USD M)
2010 2011 2012 2013 2014 2015 2016 2017
▪ $145M ▪ $171M▪ +18% yoy
▪ $348M▪ +103% yoy▪ +45% yoy excl.
deals >$100M
▪ $334M▪ -4% yoy▪ +35% yoy excl.
deals >$100M
▪ $882M▪ +164% yoy
▪ $2,721M▪ +208% yoy▪ +30% yoy excl.
deals >$100M
▪ $1,754M▪ -36% yoy▪ -5% yoy excl.
deals >$100M
▪ $2,316M▪ +32% yoy▪ +54% yoy excl.
deals >$100M
230
160
130
529
Qtr1
326
Qtr4
233
Qtr3
244
Qtr2
439
160
279
Qtr1
500
145
238
Qtr1
180
Qtr4
135
Qtr3
174
Qtr2
39
Qtr1
139
Qtr4
44
Qtr3
31
Qtr2
240
Qtr4
549
669
120
Qtr3
272
Qtr2
463
Qtr1
111
Qtr4
50
Qtr3
107
Qtr2Qtr1
32
Qtr4
26
Qtr3
40
Qtr2
47
Qtr1
1,049
400
336
Qtr4
316
Qtr3
411
Qtr2
1,814
931
839
103
58
Qtr4
23
Qtr3
25
Qtr2
72
Qtr1
26
Oscar
Metromile
Clover Health
Zhong An
Zenefits<100M Lemonade
Castlight Health
Gryphon Insurance
Bright Health
Including deals >$100M▪ 2010-17 CAGR = 49%▪ 2014-17 CAGR = 38%
Excluding deals >$100M▪ 2010-17 CAGR = 42%▪ 2014-17 CAGR = 24%
VENTURE CAPITAL INVESTMENTS BY INCUMBENTS
Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 9
INCUMBENT INSURERS VC INVESTMENTS
WHEN CONSIDERING BROADER VC INVESTMENTS, INCLUDING INVESTMENTS IN OTHER TECHNOLOGY-RELATED COMPANIES WITH BROAD INDUSTRY APPLICATIONS, THE INVOLVEMENT OF INCUMBENT INSURERS HAS GROWN EXPONENTIALLY OVER THE LAST FIVE YEARS – UP +63% BASED ON A SET OF 52 GLOBAL INSURERS – PING AN, AXA, BLUE CROSS BLUE SHIELD, AVIVA AND AMERICAN FAMILY ARE THE TOP 5 INVESTORS IN TERMS OF NUMBER OF COMPANIES INVESTED.
161165
106
48
2014
2017
+63%
2015 2016201420132012
NUMBER OF DEALS IN TECHNOLOGY-RELATED COMPANIES WITH BROAD INDUSTRY APPLICATIONS WHERE AT LEAST ONE INSURER PARTICIPATED AS INVESTOR1
481 DEALS BETWEEN 2012-2017
INSURANCE GROUP # COMPANIES
1 Ping An 51
2 AXA 33
3 BlueCross BlueShield 29
4 Global Insurance Accelerator 25
5 Aviva 24
6 American Family 21
7 MAIF 23
8 USAA 20
9 Mitsui Sumimoto 19
10 Allianz 19
11 MassMutual 17
12 Transamerica 12
13 Prudential Financial 12
14 Assurant 11
15 Munich RE 10
16 New York Life 11
17 Swiss Re 9
18 XL 9
19 Cigna 8
20 Cuna Mutual 8
21 Guardian Life 8
22 Liberty Mutual 8
23 Nationwide 8
24 Northwestern Mutual 8
25 Manulife Financial 6
26 China Life 6
27 CNP 5
INSURANCE GROUP # COMPANIES
28 Intact Financial 5
29 John Hancock 5
30 White Mountains 5
31 AIG 4
32 Hiscox 4
33 Securian Financial 4
34 AmTrust 3
35 China Pacific 3
36 TIAA 3
37 AFLAC 2
38 Allstate 2
39 Hannover Re 2
40 Insurance Australia Group 2
41 MetLife 2
42 QBE 2
43 Sun Life 2
44 The Hartford 2
45 Zurich 2
46 Aetna 1
47 Ameritas 1
48 Beazley 1
49 Generali 1
50 Hanover 1
51 State Farm 1
52 SunCorp 1
(1) Analysis based on a pool of 52 global insurers(2) Considers deals where the insurer is known to have
participated as investor alone or through a consortium(3) More than 1 insurer could have participated in the same
investment round. These cases are double counted in the charts on the right.
Copyright © 2018 Accenture All rights reserved. 10
INCUMBENT INSURERS VC INVESTMENTSINCUMBENT INSURERS ARE LOOKING FOR WAYS TO ROTATE TO THE NEW WITH AN INVESTMENT FOCUS THAT IS WIDE-RANGING AND VERY HETEROGENEOUS, VARYING ACCORDING TO THEIR INSURANCE PORTFOLIO, BUSINESS MODEL AND INNOVATION APPETITE.
Cyber Security
9%
3%
Digital Vault
5%
8%
4%
Digital Marketing
9%
Smart City Transportation
Corporate Social Responsibility
2%3%
13%
1%
IoT
Big Data and Analytics
Booking and Rental Platforms
Artificial Intelligence
3%
3%
Digital Agency
Blockchain
3%
2%
Car Marketplace Platform
Assistance Services2%
3%
Investment Advisory PlatformInsurance Core Processes & Services
4%
3%
Other
New Insurance Models
1%
3%
Health and Digital Health
Advisers Enablement
14%
3%
Financial Services and Payments
Small Business InsuranceEmployee Benefits Platform
BREAKDOWN OF INVESTED COMPANIES BY FOCUS AREA1
437 INVESTED COMPANIES IN 2012-2017
(1) Analysis based on a pool of 52 global insurers(2) 22 areas and 53 sub-areas available
Area2 Focus#
COMP-ANIES
IoT Digital Tech 57
Big Data and Analytics Digital Tech 40
Cyber Security Digital Tech 22
Smart City Transportation Digital Tech 17
Artificial Intelligence Digital Tech 11
Blockchain Digital Tech 8
Assistance Services Insurance Core 14
Insurance Core Processes & Services Insurance Core 13
New Insurance Models Insurance Core 12
Employee Benefits Platform Insurance Core 11
Small Business Insurance Insurance Core 7
Digital Vault Insurance Core 6
Digital Marketing Distribution & Marketing 14
Booking and Rental Platforms Distribution & Marketing 13
Digital Agency Distribution & Marketing 11
Car Marketplace Platform Distribution & Marketing 8
Investment Advisory Platform Advisers 19
Advisers Enablement Advisers 4
Health and Digital Health Health 62
Financial Services and Payments Other FS 38
Other Other 37
Corporate Social Responsibility Other 13
Source: Accenture Research analysis based on data from CB Insights and a proprietary methodology using a customised taxonomy
DESPITE THE INVESTMENT IN FINTECH, THERE REMAINS A BIG GAP BETWEEN START-UPS AND FINANCIAL INSTITUTIONS
Startups• High risk• High change velocity • Delayed economic value• Seeks disruption
Startups
Financial Institutions• Low risk• Low change velocity• Immediate economic value• Disruption averse
Global 2000
Companies
INTRODUCTION TO OUR INSURTECHINNOVATION LAB
Copyright © 2017 Accenture Security. All rights reserved. 13
OVER THE PAST 8 YEARS, ACCENTURE’S4 FINTECH LABS HAVE MENTORED 154 STARTUPS
LONDON (EST. 2012)
• 23 partner banks / 5 associate banks• 56 alumniSample alumni:
NEW YORK CITY (EST. 2011)
•43 Partner Financial Institutions•47 alumni
Sample alumni:
DUBLIN (EST. 2014)
• 8 partner banks• 18 alumni
Sample alumni:
HONG KONG (EST. 2014)
• 12 partner banks / 8 associate banks• 33 alumniSample alumni:
170+ PoCs initiated
$530M Capital Raised post
FinTech Lab
490+ Jobs created post
FinTech LabOUTCOMES
Copyright © 2017 Accenture Security. All rights reserved. 14
OUR INSURTECH LABS BRINGS SENIOR EXECUTIVES AND STARTUPS TOGETHER
• The entire program is driven by the CTOs of global Financial Institutions who choose 8-12 start-ups for the 3 month program
• It is designed to help start-ups mature their offerings and build valuable relationships with decision makers and investors within the industry
• The objective of the lab is to progress offerings from proof-of-value to proof-of-concept and ultimately to successful commercial development
• The program has a series of structured activities to create engagement between the start-ups and senior executives from our partners, banks and insurers.
WHAT WE DO
Copyright © 2017 Accenture Security. All rights reserved. 15
THERE ARE FOUR CORE COMPONENTS OF OUR INSURTECH LABS
FINANCIAL INSTITUTION & VC MENTORSHIP
Mentors from at least three of the participating financial services firms’ technology teams and interaction with the participating VC firms
Access to users / business units within the financial services firms for product feedback
EXECUTIVES IN RESIDENCE
Current or former executives with backgrounds in various disciplines (e.g., technology, business, regulatory)
May also include members of the academic community (e.g., data science, Artificial Intelligence)
LEADERSHIP PROGRAM
Weekly sessions on issues relevant to early stage companies (e.g. procurement, POC, regulation) with experienced entrepreneurs and/or senior executives from the financial community
ENTREPRENEURS NETWORK
Opportunities for one-on-one mentoring sessions with FinTech and InsurTech entrepreneurs
Entrepreneurs are paired with startups based on area’s of expertise
Copyright © 2017 Accenture Security. All rights reserved. 16
WE LAUNCHED OUR FIRST INSURTECH LAB IN LONDON WITH 13 PARTNER COMPANIES
Copyright © 2017 Accenture Security. All rights reserved. 17
WE ARE IN THE PROCESS OF ROLLING OUT OUR INSURTECH LAB IN NEW YORK CITY
LondonFinTech Lab
Launch
Dublin & Hong Kong
FinTech Lab Launch
New YorkFinTech Lab
Launch
LondonInsurTech Lab
Launch
2011 2012 2014 2017
New YorkInsurTech Lab Launch
• Areas that will be of interest include: • Leveraging new data sources for underwriting and
claims • Applying artificial intelligence to the underwriting
and claims process• Facilitate a benefits marketplace• Develop new products for microbusiness and large
employers• Tackle core infrastructure tools (cybersecurity,
cloud enabling)
PARTNERS
IN YEAR 1, WE RECEIVED 96 INSURTECHAPPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS
34%
14%
52% Applications
Both Tracks (68)
InsurTech (29)
FinTech (106)
Both
69%
P&C
29%
Life
2%
Insurance Type
7 InsurTech Finalists competing for 4 openings
Customer Management
17%
Distribution14%
New insurance models
14%
New products 14%
Claims Processing
10%
Underwriting10%
Emerging or under-served risks
7%
Process automation
7%
Claims Assessment4%
Talent Management /
HR3%
Copyright © 2017 Accenture. All rights reserved. 19
IN YEAR 1, WE RECEIVED 96 APPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS
Emerging or under-served
risks16%
Process automation
16%
Customer Management
15%New insurance models
12%
Claims Processing
10%
New products 9%
Underwriting6%
Distribution4%
Regulatory & Compliance4%
Claims Assessment
3%
Security3%
Talent Management /
HR2%
Copyright © 2017 Accenture. All rights reserved. 20
TOP 50, 25, 10 APPLICANTS BASED ON APPLIED TRACK AND OFFERING AREA
0
10
20
30
40
50
60
Top 50 Top 25 Top 10
Applied Track
Both InsurTech Track
0
10
20
30
40
50
60
Top 50 Top 25 Top 10
Insurance Product Focus
Both P&C Life
0
10
20
30
40
50
60
Top 50 Top 25 Top 10
Enterprise Customer
Both Retail Commercial
Copyright © 2017 Accenture. All rights reserved. 21
OFFERING FOCUS AREA BY TOP APPLICANTS
8
5
2
7
9
6
3
2
5
2
1
2
4
1
6 6
2 2
1 1
0 0
1
3
1
2
1 1 1
0 0 0 00
1
2
3
4
5
6
7
8
9
10
Focus Area
Top 50
Top 25
Top 10
Copyright © 2017 Accenture. All rights reserved. 22
TECHNOLOGY FOCUS AREA BY TOP APPLICANTS
21
1
8
25
28
53
6
25
13
46
12
9
0
5
1314
20
2
9
4
0
3
0 0
5
02
5 5
10
1
4
10
10 0
0
5
10
15
20
25
30
Technology Focus
Top 50
Top 25
Top 10
Insurance companies leverage access to real time consumer
data to create better customer profiles and ultimately
improve underwriting. With customer consent, we access
user data through connected home devices and
smartphones and combined with contextual data we
translate this into behavioral profiles. Insurers use this data
to improve underwriting models and promote additional
services (security, health monitoring etc) to their customers.
Copyright © 2017 Accenture Security. All rights reserved. 23
SAMPLE FINALIST INSURTECH FIRMS FOR THE 2018 COHORT
Underwriting | Under Served Risks
Smart cities are producing data – curates
feeds of city data and delivers predictive
insights that markedly enhance risk
assessment of prospective policyholders,
leading to better risk selection and
informed underwriting. .
Iot | New Insurance Models
IoT sensor technology and AI driven cloud
computing, company can collect, analyze
and deliver actionable insights about how to
mitigate the injury risk inherent to manual
materials handling positions.
Data Science Enabled Efficiencies
Enable carriers to underwrite commercial risk with just
business name and address of the insured. Our underwriting
platform uses data science to eliminate administrative
burden associated with insurance application / submission
processing, and supercharges underwriting decisions by
analyzing and synthesizing risk characteristics from a broad
array of external data sources.
Customer Management | New Insurance Models
FEATURED INSURTECHSTARTUPS
Copyright © 2017 Accenture Security. All rights reserved. 25
THANKYOU