A number of insurance technology investors are forming hybrid models that seek to mix the best aspects of traditional and incumbent insurer/reinsurer venture capital models, according to Willis Towers Watson's latest Quarterly InsurTech Briefing.
These models look to combine the traditional venture capital investor mentality and the expertise of incumbents to create a model that balances financial and strategic returns for investors.
According to the report, there were 66 insurtech investment deals in the first quarter, a new high. Investment volume came in at $724 million, 155% higher than the prior-year quarter. Of these, just over half were in the U.S., with 12% in the U.K. and 8% in China. There were seven investment rounds that breached the $30 million mark.
The report also noted that insurance sector incumbents tend to make minority investments in startups developing technology that help with distribution costs, claims handling, underwriting excellence and other commercial pressure points they encounter. Traditional venture capital investors preferred startups that look to address customer pressure points, including price, ease of access and underserved markets.
