Disrupting the highly regulated and conservative industry has never been easier. InsurTech companies are raising far less investment than their peers targeting other parts of the financial sector. But the pandemic has accelerated digitization. Large amounts of money have been invested in potential armed groups.
Venture capital investment has more than quintupled globally over the last four years to $ 11.7 billion in the first nine months of 2021. PitchBook.. The total corporate value of European insurance companies is 23 billion euros, According to the Dealbook..
Advances in the Internet of AI and the Internet of Things offer new ways to do business. The emergence of more data sources “Parametric” insurance Provides predefined prompt payments based on triggered events. London-based FloodFlash, which signed a partnership with Munich Re in November, provides quick-paying flood cover based on pre-installed sensors that measure field water levels.
Another London-based insurtech Tractable, which secured its unicorn status in June, uses “computer vision” (a type of AI that trains computers to interpret the visual world) of car damage photos. Performs ultra-fast evaluation. San Francisco-based startup Kettle uses deep learning and AI to better identify the risks associated with climate change. During the 2020 California wildfire season, the company claims that its technology reduced insurers’ loss rates (losses on premiums) by 89%.
But there are challenges. Regulators are vigilant. AI-powered decision-making needs to be accountable. You may be worried about algorithms that prevent more people from being insured or force you to pass more data in return for eligibility.
Another concern is Poor business performance Of many quoted US insurance companies. The HSCM Public Insurtech Index, a publicly quoted basket of insurance companies, lost more than one-third of its value last year. In some cases, growth-hungry companies have taken on too many high-risk customers and too cheaply.
It is a mistake to tar all InsurTech with the same brush. These businesses are diverse. But the tragedy of listed stocks will probably make it difficult for successors to prove their value.
If you’re a subscriber and want to be alerted when a Lex article is published, it will appear above the headline at the top of this page.[Add tomyFT]Just click a button.
Insurtech: poor performance of pioneers will deter new money Source link Insurtech: poor performance of pioneers will deter new money
The post Insurtech: poor performance of pioneers will deter new money appeared first on California News Times.