Allstate M&A. Munich Re backs new telematics insurer. This week in insurance tech.
Hi there,
On its most recent earnings call, Allstate CEO Thomas Wilson said he believed telematics will be the biggest underwriting breakthrough since credit scoring:
“I believe that, in the future, (telematics) will be the primary driver of insurance pricing in auto insurance, because it’s every bit as powerful as credit and those who have been hanging around auto insurance like I had for a while credit, sort of, ripped through the industry and pricing in the early part of the 2000 and this is a little harder to implement because it requires the customer to do something rather than just buying data from TransUnion or some like that, but it’s equally as powerful. So, it will happen.”
To date, penetration of telematics in the US auto insurance industry has been slow with estimates of the total number of connected drivers in North America at 5%.
Using CB Insights’ Earnings Transcript Search Engine, we identified 13 insurers from Progressive and Allstate to Selective and Erie that mentioned or were asked about telematics or their specific telematics programs on earnings calls since the start of 2018.
We compiled an analysis of what they talked about as well as the vendors they are using. Read the analysis.
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More focus on Southeast Asia
Insurance M&A activity is heating up in Southeast Asia. In September, Zurich acquired Adira Insurance, making it the largest foreign P&C insurer in Indonesia. And last month, FWD Group acquired Commonwealth Bank of Australia’s Indonesian life insurance unit, with other interested bidders including Sun Life and Prudential.
The primary driver of insurance growth in Indonesia has been bancassurance, which saw income from premiums increase by 74% in 2016. As such, both deals included long-term bank distribution partnerships.
Foreign insurers are also looking to invest in digital across the region. Sun Life has made several partnerships and investments including with Lazada and Vietnamese digital bank Timo. Earlier this week, MassMutual Ventures announced that it would be launching a $50M Southeast Asian fund to invest in startups across financial services, insurance, healthcare, and enterprise software.
While there is still a general lack of understanding of insurance products across many parts of the region, the use of digital channels to purchase insurance and other financial products could boost penetration as payment methods improve.
One wonders, however, how much of this value will eventually accrue to the largest platform players in the region, rather than startups.
Since 2015, our database shows that fintech startups headquartered in Southeast Asia have raised $1.19B. For perspective, Grab expects to close a $3B round by the end of the year, while Go-Jek is in talks to raise at least $2B in new funding with both expanding their fintech services through partnerships.
If you’re working in or starting up in financial services or insurance in the region, I’d love to chat with you. Reach out by replying back to this email.
