wtw-保险科技季度简报2021年第3季度（英）-46页_6mb

2021 Q3 InsurTech Summary

Core Content

The Quarterly InsurTech Briefing for Q3 2021 highlights the ongoing evolution of the InsurTech sector, with a focus on the future of risk and the concentration of investment capital into a small number of companies.

Main Points

1. Investment Trends

• Global InsurTech funding in Q3 2021 reached $3.1 billion, marking a 23% year-over-year increase and the second-largest funding quarter on record.
• Despite a 35% quarter-on-quarter decline in deal count, the number of deals increased by 9% YoY.
• Mega-rounds (deals over $100 million) continued to dominate, with 11 mega-rounds raising $1,588 million, accounting for 51% of total funding.
• The average mega-round deal size was $144 million, with the mean average percentage of total funding per deal dropping to 5%, indicating more deals contributing to the overall investment pool.

2. Capital Concentration

• The majority of investment is still concentrated in a small number of companies, with two-thirds of total investment going to 15 deals in Q2 2021.
• Only 5% of InsurTechs raised capital in Q3, with the remaining 95% seeing no fundraising activity.
• Venture capital (VC) continues to be a major driver of investment, with 1,118 investors active in 2021 — 7.5 times more than in 2012.

3. Valuation Trends

• The stock price performance of public InsurTechs showed a downward trend in Q3.
• Risk-originating businesses (those that generate insurance premiums) tend to attract higher valuations, while B2B software and distribution-focused models are less likely to reach unicorn status.
• The rise of unicorns (InsurTechs valued at over $1 billion) has led to concerns about whether a "group of unicorns" is an oxymoron, with 8 new unicorns added in 2021.

4. Cyber Insurance as a Key Focus

• Cyber insurance was a major theme, with two of the three largest deals in Q3 focusing on this area.
• Coalition raised $205 million in Series E, and At-Bay raised $185 million in Series D.
• At-Bay is highlighted in the Transaction Spotlight for its focus on cyber and tech errors and omissions for small businesses.

5. The Future of Risk

• The briefing centers on nine key areas that are shaping the future of risk, including:
  • Climate change/weather
  • Cyber/digital outage
  • Increased urbanization
  • Changing behavior
  • AI/robotics
  • Demographic changes
  • Resource management
  • Intellectual property
  • Shifting economics/financial insecurity
• The report emphasizes that climate change and cyber/digital risks are the most impactful for the next two to three decades.

Key Insights

• The concentration of capital into a few companies is a recurring issue, with mega-rounds accounting for ~50% of total investment in recent quarters.
• The stock performance of public InsurTechs has been highly correlated, suggesting that the market may be viewing the sector as a single entity rather than individual businesses.
• Cyber insurance is emerging as a major growth area, with several start-ups securing significant funding.
• The future of risk is being shaped by technological innovation, but also by systemic and evolving threats that require new approaches to risk management.
• The rise of unicorns raises questions about whether the sector is overvalued and whether this trend is sustainable.

Featured InsurTechs

• OTONOMI: Blockchain-enabled parametric MGA for cargo insurance.
• Corvus: AI-driven commercial insurance platform.
• Arbol: Parametric weather risk platform for climate resilience.
• Stable: Risk management for the food and farming industry.
• Understory: Insurance solutions for climate risks using hyperlocal models.
• Concirrus: Leverages IoT, satellite imagery, and AI for digital insurance.
• Kettle: AI-powered reinsurance MGA for natural disasters.
• Previsico: Flood forecasting technology to mitigate losses.

Key Figures

Conclusion

The InsurTech sector continues to grow, but with a concentration of investment and high valuations for only a few companies. While cyber and climate risks are driving innovation, the market's perception of the sector as a single entity may lead to overvaluation and sustainability concerns. The future of risk will depend on how well the industry can adapt to emerging threats and technological advancements, with a particular focus on risk management and innovation.