Insurance CVC shuts down

Hi there,

In November 2016, Aviva CEO Mark Wilson said that the number of insurance agents in some of Asia’s most developed markets “could halve over the next three years as digital sales start to eat into their commissions.”

So it was notable that Aviva this week announced a joint venture in which Hillhouse Capital and Tencent would take stakes in Aviva Hong Kong to develop a new digital life insurance entity. This was one of the more intriguing deals in insurance tech as of late for a few reasons:

• Hillhouse, which has invested in prominent tech companies including AirBnB, JD, and Uber, has become particularly interested in insurance. The deal marks Hillhouse Capital’s second announced joint venture with a major insurer and a Chinese Internet giant after partnering up with Baidu and Allianz in November 2015. That joint venture has yet to receive a formal license and launch. Perhaps the Hong Kong market be more lenient than China’s? Last December, Hillhouse also became the primary investment manager of Enstar’s reinsurer KaylaRe.
• Tencent is also a backer of Chinese life insurer HeTai, which was  formally incorporated this week. Worth mentioning that HeTai is not analogous to online insurer Zhong An, valued at $8B and which Tencent is also invested in, given that it will operate both online and offline.
• Aviva currently owns just 1% of the £40 billion a year Hong Kong insurance market so it stands to see lots of potential upside from the arrangement.

Speaking of life

Last week, Fabric announced it had raised $2.5M to eventually launch accidental death and term life insurance products in partnership with Vantis Life and RGAx and sold online.

While Fabric has yet to launch, its partner Vantis currently offers a term life product that doesn’t require a medical exam and has a max of $300,000 of coverage. Two weeks ago, Ladder Life launched in California, offering policies that range from $100,000 to $8 million. Below is a screenshot of their financing history from CB Insights’ company comparison tool.

An insurance corporate VC…shuts down?

Last week, we highlighted how strategic tech investment by insurers or reinsurers went from 1 deal in 2012 to 100 in 2016 as more units have set up shop.

But this week, one shut down. AMP New Ventures, the corporate venture arm of Australian life insurer AMP shut down. AMP, which wrote down the value of its life insurance arm by $668 million last October, launched its venture arm less than two years ago.

On the M&A side…

Verisk made its first acquisition of the year after a busy 2016. The $14B data and analytics provider to the insurance industry acquired liability risk modeling firm Arium. Here’s an updated look at Verisk’s M&A history over time.

Have a great rest of the week,

Matt
@mlcwong

P.S. We’re bringing our second Future of Fintech conference to Jazz at Lincoln Center from June 26-28, 2017. Get tickets and nominate a speaker here.