However, it’s also important to note that although this data points to the sector staying on track to raise potentially the second-highest amount of money in any given year, it was the top 10 insurtechs who have walked away with the majority of the capital spoils, leaving the rest of the community to fight over the leftover one-third of total funds invested.
Meanwhile, another key trend to highlight is that while there are some insurtechs that are making headway by writing coverage and directly competing with traditional insurers, legacy insurance companies are still dominating the playing field, says one expert.
“I don’t see a behemoth insurtech out there that’s going to essentially end the insurance business as we know it, and take over massive amounts of market share,” said Sam Friedman (pictured), insurance research leader at the Deloitte Centre for Financial Services. “Where insurtech is having a huge impact is in helping insurers become better at what they do.”
Insurtechs have helped insurers to become more digital, improve the customer experience, access new sources of alternative data, and get better at advanced analytics and predictive modelling to help with policy administration and claims handling. This in turn has helped with fraud management and augmenting underwriting so that underwriters can focus on more cognitive work, including portfolio management, and working with brokers and clients to set terms and coverage, explained Friedman. Rather than serving as direct competition, the insurtech-insurer relationship has become a much more symbiotic one, he added.
Nonetheless, there has been a ripple-effect from the pandemic on this relationship, in that “it’s forced insurers to prioritize who they’re going after now and who they need to work with, which is anybody that can help them accelerate digitization,” said Friedman. “There may be some areas where they’re going to decide, ‘I’m not going to work on that this year, or maybe for another 18 months. I [instead] need help to get my claims adjusters virtual so that they can look at a damaged property, whether it’s through a drone or the policyholder’s camera phone.’”
As a result, there’s more emphasis being placed on insurtechs that are ready to go to market, and have products that have been proven and can be scaled, in order to help insurers get through the transition prompted by COVID-19.
Moreover, according to the Deloitte expert, “You could see more merger and acquisition activity in insurtech, both among insurtechs, because what you’re seeing is there’s a lot of duplication of solutions out there that may have to be consolidated, and also, because insurance companies are now looking for holistic solutions, rather than point solutions,” said Friedman.
While the market for insurtech investment is dynamic right now, there are some insurtechs that may get left on the sidelines because either they’re not far enough along to be of immediate value to the industry, they duplicate what too many of their peers are doing, or their products are not exactly what the industry needs during the pandemic.
“You’re going to have to wait and see, do they have enough money to sustain them for 12 to 18 months when they are not necessarily going to do a lot of business – that’s going to be the interesting thing to watch,” said Friedman.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
