The United Kingdom’s insurtech sector has catapulted itself to the forefront of the global market, boasting an impressive total enterprise value of approximately $21 billion, as revealed by a recent analysis conducted by renowned management consulting firm McKinsey & Company.
While the UK’s insurtech industry may trail behind the giants of the US and China, which command enterprise values of approximately $100 billion and $28 billion, respectively, it has secured a distinctive position on the world stage.
“London has the same number of insurtech unicorns as the rest of Europe combined and globally is second only to Silicon Valley. Indeed, of the estimated 3,000 insurtech firms in the world, approximately 280 are located in the United Kingdom—the highest number of insurtechs per capita among all major world economies,” McKinsey states.
Taking into account the country’s population size, the UK’s insurtech sector has rapidly emerged as a global leader, showcasing its dominance with the highest concentration of insurtech firms among major economies.
The inception of the UK’s insurtech revolution dates back to the early 2000s, marked by the birth of its first major insurance comparison website. Since then, the sector has witnessed a flourishing growth trajectory, with around 280 operational insurtech firms currently thriving in the country. These firms account for a substantial 10 percent market share of the estimated 3,000 insurtech firms globally, second only to the US with approximately 1,300 firms.
The UK’s insurtech companies have experienced an astounding surge in combined revenue, reaching an estimated £2 billion to £3 billion in 2022. This represents a remarkable sixfold increase from the estimates reported in 2015, underscoring the rapid expansion of the sector.
Moreover, the growth of the insurtech industry has contributed significantly to job creation, providing employment to approximately 14,000 individuals across the nation, accounting for about 4% of total employment in the UK’s insurance sector. Additionally, the sector indirectly supports an estimated 23,000 jobs through its supply chain connections and the consumer spending of its employees.
At the forefront of this insurtech revolution is the vibrant city of London, boasting the highest number of insurtech firms per capita among major world economies. The city is home to an impressive five insurtech unicorns, making it a prominent player in the global insurtech landscape. Interestingly, this figure equals the total number of insurtech unicorns found in the rest of Europe combined.
While London remains a pivotal hub for insurtech, the industry’s influence has extended beyond the capital city. Thriving insurtech clusters have emerged in regions and nations across the United Kingdom, with two-thirds of the workforce located outside London, owing to the growing trend of hybrid work.
Notably, the northwest and south of England have witnessed the emergence of thriving insurtech clusters, while Wales focuses on price-comparison websites and insurers like Confused.com and Admiral Group, further highlighting the sector’s widespread impact on the nation’s economic landscape.
With a burgeoning insurtech sector and a regulatory environment that fosters innovation, the UK is poised to maintain its dominance as a global leader in insurtech.
As the industry continues to mature, experts predict that UK-based insurtech firms could potentially rival even the largest players in the US and China, making it an exciting and transformative time for the country’s insurance technology sector.
Source: Mckinsey
