Updating The Insurance Industry: Today, the insurance business is one of the most convoluted and complicated businesses in the market. Yet the next generation of insurtech companies are working to make the process of getting insurance as transparent, easy, customizable and cheap as possible. In recent years, fintech companies like Robinhood and Rocket Companies Inc have leveraged data and technology to simplify and digitize the brokerage and mortgage markets, and the next generation of insurtech companies are looking to do the same to overhaul the insurance industry. One Deloitte survey found that 79% of traditional insurance companies say the pandemic exposed gaps in their digital capabilities. Money Pouring In: Money was pouring into the fledgling insurtech industry in 2020. Last year, insurtech funding hit a record $7.1 billion, according to WillisTowersWatson. Total funding was up 12% and the total number of funding deals were up 20%. In the fourth quarter of 2020, property and casualty insurtechs accounted for 67% of the $2.1 billion in funding raised. Whether it be by launching standalone insurtech businesses or partnering with existing insurance market leaders to modernize their business models, insurtech companies will likely make a major impact on the industry in coming years. In fact, a recent Capgemini-Efma survey found less than 30% of insurers say they have “digital-ready systems,” and two-thirds (67%) of insurers are interested in partnering with insurtech companies to fix that problem. Insurtech startups are working on improving all aspects of the insurance process, from ease of access to customized policy creation, to speeding up the quote process to using artificial intelligence to collect and analyze customer data. The more efficiency technology can bring to the insurance business, the more profitable insurance companies can become. Likewise, the lower potential premiums can be for customers. Lemonade Inc, Metromile Inc and Clover Health Investments Corp are just three examples of insurtech stocks that went public in the last year, but investors should be on the lookout for more potential companies to take advantage of the booming IPO and SPAC markets and go public in 2021 as well.
Source: Benzinga
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