A 248% increase in InsurTech funding during the second quarter of the year has been driven by new entrants who are focused on streamlining the insurance claims management process.
The rise in funding, driven by a record number of transactions, has been reported by Willis Towers Watson in its Quarterly InsurTech Briefing. The consultancy has said that the volume of investment into InsurTech rose to $985 million thanks to a record high of 64 transactions, nearly double the 38 transactions completed in the first quarter of this year.
The research, produced by Willis Towers Watson Securities and Willis Re in collaboration with CB Insights, outlines how the use of technology, developed by insurers and InsurTech start-ups, can revolutionize claims management by helping insurers transition from a model focused on payments and cost control to one of claims mitigation and risk management. The report predicts this will lead to higher client satisfaction and retention.
Rafal Walkiewicz, CEO of Willis Towers Watson Securities, said: “The claims management conversation with a client provides the greatest insight and opportunity to improve risk mitigation, making it increasingly core to the evolving, consumer focused, insurance value chain.
“We believe claims management could assume additional prominence at the expense of other functions including distribution, underwriting and capital management. Effectively harnessing this conversation through technology, whether developed internally or through partnerships or acquisition, will be a key source of differentiation for incumbents going forward.”
Andrew Newman, president and global head of casualty at Willis Re, said: “The $985 million that was invested in InsurTech in the second quarter of 2017 serves as another indication that change is coming to the industry. Whether disruption beckons or opportunity unfolds is primarily a matter of perception relative to each company’s position in the insurance value chain. It is not the technology that is disruptive, but the degree to which a competitor can successfully wield that technology compared to another.”