By: Parul Singh
Buying insurance is no longer the painful process it used to be. The rise of insurance technology, known as insurtech, has made insurance fit the needs of the modern consumer, personalized, and more user-friendly than ever.
What is Insurtech?
Let’s start with the basics, what is insurtech and how did it come to be? Insurtech refers to the use of technology innovations designed to create new revenue streams and squeeze out savings and efficiency from the current insurance industry model. A quick history lesson: the term “insurtech” did not exist until late 2015, see the Google search results trend graph for “insurtech” below.
Insurtech came to be as increasing digitally literate customers began to demand greater efficiency and better customer experiences from their insurance companies. Though the insurance industry has been slow to innovate, emerging insurtech companies have forced a new wave of innovation in the space.
Insurtech is a massive market
The insurtech market is valued at $16.6 billion in 2022 and is expected to grow at an impressive rate reaching $165.4 billion by 2032. iAs an investor, this represents an attractive time to enter space, as the market is expected to boom in the next 10 years.
There is already plenty of VC activity in the space validating that the insurtech industry is at an exciting pivotal point. For example, in 2021 insurtech firms raised $15.4 billion in funding across 566 deals, double the total funding in 2020. Most deals were in Property Casualty including categories such as renter’s insurance, pet insurance, auto insurance, and more — this accounted for 73% of insurtech deals. ii
Insurtechs succeed by embracing the latest technology trends
Established insurance companies find it hard to adopt new technologies due to legacy systems and processes…