Insurance innovation survey. End-of-year M&A and big fundraises.
Hi there,
This is our last newsletter of 2017. As we head into the new year, we are preparing some bigger changes to format and coverage.
Part of this is because CB Insights is now tracking public company data and earnings transcripts. But another, more important reason is that as new business/ownership models and technologies come to market, the nature of what’s important to keep track of for those involved in innovation in the insurance industry is changing. Startups are just one piece of it.
Lets look back at our coverage this year to highlight a few examples:
Entering the board room: In 2017, the topic of digitization became a hot topic among C-suite insurance execs. Munich Re dedicated its recent investor day to digital transformation. Markel acquired State National for $919M to “help with…insurtech initiatives.” And mentions of “technology” or “digital” on earnings calls among some of the largest P&C carriers grew substantially.
China heats up: Lots of developments this year in the second largest insurance market in the world. Zhong An, the country’s first online-only insurer, went public and today sports a $13B market cap. Tencent launched its online insurance agency WeSure within its WeChat and QQ platforms. All the while, China’s second largest insurer, Ping An, believes it should be valued as a tech company as its flagship tech units Lufax and Good Doctor sport tens of millions of users and look to prepare their own public offerings.
Preparing for changes in auto: 2017 saw a number of different moves as P&C insurers look toward both shorter and longer-term changes in auto ownership. Car subscriptions became the hot new trend as Volvo, Lincoln, Porsche, Ford, and GM either launched, expanded, or piloted their programs (while startup car marketplace Fair.com acquired Uber’s auto leasing business). Assurant acquired Warranty Group for $2.5B as it looks to “capitalize on…trends in auto that could gradually shift ownership toward companies as opposed to individuals.” Allstate is filing autonomous vehicle-related patents and its Arity data analytics unit signed its first non-Allstate insurance client in National General. Tesla’s Insure My Tesla scheme expanded to the US, Canada, and the UK. Zurich acquired Bright Box to tap into the connected car startup’s OEM and dealership relationships. Munich Re partnered with Mobileye in the US. And State Farm’s digital, direct, auto insurance company HiRoad is underway in Rhode Island.
Insurers & wealth management: One of the biggest under-the-radar trends in the ETF market was the entrance of major insurers that launched six of the largest most popular new ETFs of 2017. Aviva took a majority stake in robo-investment startup Wealthify as “part of its strategy to build customer loyalty.” John Hancock quietly debuted Twine, a financial planning mobile app for couples, borne out of Hancock’s acquisition of Guide Financial in 2015. Jack Ma’s fintech and wealth management group Yunfeng Financial led the $1.7B acquisition of MassMutual Asia to explore future business opportunities. And insurers have invested in a number of digital wealth management startups.
Amazon speculation: One of our most popular posts this year was a short brief we published in September analyzing the expansion of Amazon’s product protection brand Amazon Protect and job listings for product managers to “create new, innovative products.” While we didn’t anticipate some of the hyperbolic headlines that followed, we will continue to keep track of the announcements and actions (large and small) by platform players around the world within the insurance industry. See our earlier newsletter on nascent efforts by Flipkart, Blablacar, and Toutiao, who are all exploring becoming or buying insurance brokerages.
Developments in cyber: With some estimating that cyber coverage could increase to as much as $20B by 2020, 2017 saw a host of developments in anticipation of the potential growth. AIG announced it would shift away from issuing policies that do not specify whether cyber losses are covered. Guidewire acquired cyber risk modelling startup Cyence for $275M (more here). Pure partnered with Rubica in individual cyber. New VC-backed cyber MGAs At-Bay and Coalition launched (more on this in our next newsletter). Insurers continued to invest in cybersecurity startups. Meanwhile, others including Swiss Re expressed more skeptical or cautious outlooks even going as far as saying cyber is “probably not insurable.”
Insurance innovation survey
This year, Willis Towers Watson, in partnership with CB Insights, put out three reports highlighting various tech efforts by (re)insurers as well as detailing the investments and partnerships they were making within the digital realm. Those briefings are available below:
In the next report, we’ll be releasing our first State of Innovation Benchmark survey. If you work in the (re)insurance industry and are involved in your firm’s innovation strategy, approach, and priorities, take the 5-minute survey.
Those who participate in the survey will receive a full report with the findings.
