march 2, 2018 insurance innovation executive board · the insurtech landscape is growing with close...

STATE OFINSURTECHJohn Cusano

March 2, 2018

INSURANCEINNOVATIONEXECUTIVEBOARD

UPDATE ON INSURTECHINVESTMENT

Source: Accenture Research analysis based on data from CB InsightsCopyright © 2018 Accenture All rights reserved. 4

THE INSURTECH LANDSCAPE IS GROWING WITH CLOSE TO $8.7 BILLION INVESTED TO DATE

5%

Microinsurance Platform

1%

Core Insurance Solution/Platform43%

Others

4%

Employee Benefits Platform

10%

Digital Agency/Broker37%

Digital Insurer

331

238

152110

69514018

483COMPANIES1

$8.7BINVESTED3

1,009DEALS

NUMBER OF DEALS

% OF COMPANIES BY INSURANCE SECTOR

% OF COMPANIES BY CLASS OF INSURTECH

(1) Considering currently active companies, independent and acquired(2) Based on number of deals(3) The invested amount has not been disclosed for 254 deals out of 1,009 (25% of the database)

2013

334

2012

348

100

130

1,676

2016

1,754

400103

160

1,091

2015

2,721

931

500

145

1,145

2014

882

2017

2,316

230160120

2011

171

2010

145

Zenefits

Lemonade

Bright Health

GryphonOscar Health

MetroMile

Clover Health

Castlight Health

<$100M

Zhong An

FUNDING $M

Travel

1%

P&C 42%

Multiline

28%

Life & Annuities8%

Health

21%

1%

Reinsurance

52%2010-17 CAGR2

CUMULATIVE 2010-2017


NORTH AMERICA REMAINS THE LARGEST MARKET FOR INSURTECH INVESTMENTS

US245 companies611 deals$5.9B

CHINA28 companies35 deals$1.3B

LATAM12 companies22 deals$36.3M

ANZK5 companies7 deals$5.5M

MART24 companies43 deals$50.8M

CANADA12 companies20 deals$47.8M

EUROPE126 companies218 deals$958M

INDIA15 companies29 deals$303M

JAPAN3 companies4 deals$4.9M

ASEAN13 companies19 deals$54.6M

Country – Companies/Deals/VolumeUK – 45/85/$406MGermany – 21/36/$123MFrance – 16/26/$93MSwitzerland – 6/8/$41MSweden – 6/12/$185MSpain – 6/10/$34MNetherlands – 5/8/$39MItaly – 4/8/$5.8MPortugal – 3/3/NADenmark - 3/4/$23MIsrael – 2/5/$1.2MBelgium – 2/2/$7.2MIreland – 2/3/$40KNorway – 2/2/$120KBulgaria – 1/1/NAEstonia – 1/3/$1.8KPoland – 1/2/NA

- Considering currently active companies, independent and acquired- The bubble size reflects the total invested volume between 2010 and 2017 and include the effect of deals >$100M- The invested amount has not been disclosed for 254 deals out of 1,009 (25% of the database)

CUMULATIVE 2010-2017

7671

96

89

55

67

43

73

50

363333

25

3328

24

12

21

14

22

14121213

61113

105454


INSURTECH DEALFLOW

Qtr2Qtr2Qtr1Qtr4Qtr3Qtr2 Qtr1Qtr4 Qtr4Qtr3Qtr1 Qtr4Qtr1Qtr4Qtr3Qtr2 Qtr1Qtr2 Qtr3 Qtr2Qtr1 Qtr3Qtr3Qtr2Qtr1Qtr4Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4

2010 2011 2012 2013 2014 2015 2016 2017

18 deals 40 deals+122% yoy

51 deals+28% yoy

69 deals+35% yoy

110 deals+59% yoy

152 deals+38% yoy

238 deals+57% yoy

331 deals+39% yoy

THE NUMBER OF INSURTECH DEALS WAS UP +39% YOY IN 2017 CONTINUING WITH THE STRONG GROWTH COURSE OF PRIOR YEARS

▪ 2010-17 CAGR = 52%

▪ 2014-17 CAGR = 44%

Invested volumes totalled $2.3b in 2017, surpassing the $2b mark for the second time after the 2015 $2.7b record. Excluding deals >$100m, the invested volume was the largest in any given year, totalling $1.7b, and above the $1b threshold for the third consecutive year in a row.


INSURTECH FINANCING TRENDS

FUNDING VOLUME (USD M)

2010 2011 2012 2013 2014 2015 2016 2017

▪ $145M ▪ $171M▪ +18% yoy

▪ $348M▪ +103% yoy▪ +45% yoy excl.

deals >$100M

▪ $334M▪ -4% yoy▪ +35% yoy excl.

deals >$100M

▪ $882M▪ +164% yoy

▪ $2,721M▪ +208% yoy▪ +30% yoy excl.

deals >$100M

▪ $1,754M▪ -36% yoy▪ -5% yoy excl.

deals >$100M

▪ $2,316M▪ +32% yoy▪ +54% yoy excl.

deals >$100M

230

160

130

529

Qtr1

326

Qtr4

233

Qtr3

244

Qtr2

439

160

279

Qtr1

500

145

238

Qtr1

180

Qtr4

135

Qtr3

174

Qtr2

39

Qtr1

139

Qtr4

44

Qtr3

31

Qtr2

240

Qtr4

549

669

120

Qtr3

272

Qtr2

463

Qtr1

111

Qtr4

50

Qtr3

107

Qtr2Qtr1

32

Qtr4

26

Qtr3

40

Qtr2

47

Qtr1

1,049

400

336

Qtr4

316

Qtr3

411

Qtr2

1,814

931

839

103

58

Qtr4

23

Qtr3

25

Qtr2

72

Qtr1

26

Oscar

Metromile

Clover Health

Zhong An

Zenefits<100M Lemonade

Castlight Health

Gryphon Insurance

Bright Health

Including deals >$100M▪ 2010-17 CAGR = 49%▪ 2014-17 CAGR = 38%

Excluding deals >$100M▪ 2010-17 CAGR = 42%▪ 2014-17 CAGR = 24%

VENTURE CAPITAL INVESTMENTS BY INCUMBENTS


INCUMBENT INSURERS VC INVESTMENTS

WHEN CONSIDERING BROADER VC INVESTMENTS, INCLUDING INVESTMENTS IN OTHER TECHNOLOGY-RELATED COMPANIES WITH BROAD INDUSTRY APPLICATIONS, THE INVOLVEMENT OF INCUMBENT INSURERS HAS GROWN EXPONENTIALLY OVER THE LAST FIVE YEARS – UP +63% BASED ON A SET OF 52 GLOBAL INSURERS – PING AN, AXA, BLUE CROSS BLUE SHIELD, AVIVA AND AMERICAN FAMILY ARE THE TOP 5 INVESTORS IN TERMS OF NUMBER OF COMPANIES INVESTED.

161165

106

48

2014

2017

+63%

2015 2016201420132012

NUMBER OF DEALS IN TECHNOLOGY-RELATED COMPANIES WITH BROAD INDUSTRY APPLICATIONS WHERE AT LEAST ONE INSURER PARTICIPATED AS INVESTOR1

481 DEALS BETWEEN 2012-2017

INSURANCE GROUP # COMPANIES

1 Ping An 51

2 AXA 33

3 BlueCross BlueShield 29

4 Global Insurance Accelerator 25

5 Aviva 24

6 American Family 21

7 MAIF 23

8 USAA 20

9 Mitsui Sumimoto 19

10 Allianz 19

11 MassMutual 17

12 Transamerica 12

13 Prudential Financial 12

14 Assurant 11

15 Munich RE 10

16 New York Life 11

17 Swiss Re 9

18 XL 9

19 Cigna 8

20 Cuna Mutual 8

21 Guardian Life 8

22 Liberty Mutual 8

23 Nationwide 8

24 Northwestern Mutual 8

25 Manulife Financial 6

26 China Life 6

27 CNP 5

INSURANCE GROUP # COMPANIES

28 Intact Financial 5

29 John Hancock 5

30 White Mountains 5

31 AIG 4

32 Hiscox 4

33 Securian Financial 4

34 AmTrust 3

35 China Pacific 3

36 TIAA 3

37 AFLAC 2

38 Allstate 2

39 Hannover Re 2

40 Insurance Australia Group 2

41 MetLife 2

42 QBE 2

43 Sun Life 2

44 The Hartford 2

45 Zurich 2

46 Aetna 1

47 Ameritas 1

48 Beazley 1

49 Generali 1

50 Hanover 1

51 State Farm 1

52 SunCorp 1

(1) Analysis based on a pool of 52 global insurers(2) Considers deals where the insurer is known to have

participated as investor alone or through a consortium(3) More than 1 insurer could have participated in the same

investment round. These cases are double counted in the charts on the right.

Copyright © 2018 Accenture All rights reserved. 10

INCUMBENT INSURERS VC INVESTMENTSINCUMBENT INSURERS ARE LOOKING FOR WAYS TO ROTATE TO THE NEW WITH AN INVESTMENT FOCUS THAT IS WIDE-RANGING AND VERY HETEROGENEOUS, VARYING ACCORDING TO THEIR INSURANCE PORTFOLIO, BUSINESS MODEL AND INNOVATION APPETITE.

Cyber Security

9%

3%

Digital Vault

5%

8%

4%

Digital Marketing

9%

Smart City Transportation

Corporate Social Responsibility

2%3%

13%

1%

IoT

Big Data and Analytics

Booking and Rental Platforms

Artificial Intelligence

3%

3%

Digital Agency

Blockchain

3%

2%

Car Marketplace Platform

Assistance Services2%

3%

Investment Advisory PlatformInsurance Core Processes & Services

4%

3%

Other

New Insurance Models

1%

3%

Health and Digital Health

Advisers Enablement

14%

3%

Financial Services and Payments

Small Business InsuranceEmployee Benefits Platform

BREAKDOWN OF INVESTED COMPANIES BY FOCUS AREA1

437 INVESTED COMPANIES IN 2012-2017

(1) Analysis based on a pool of 52 global insurers(2) 22 areas and 53 sub-areas available

Area2 Focus#

COMP-ANIES

IoT Digital Tech 57

Big Data and Analytics Digital Tech 40

Cyber Security Digital Tech 22

Smart City Transportation Digital Tech 17

Artificial Intelligence Digital Tech 11

Blockchain Digital Tech 8

Assistance Services Insurance Core 14

Insurance Core Processes & Services Insurance Core 13

New Insurance Models Insurance Core 12

Employee Benefits Platform Insurance Core 11

Small Business Insurance Insurance Core 7

Digital Vault Insurance Core 6

Digital Marketing Distribution & Marketing 14

Booking and Rental Platforms Distribution & Marketing 13

Digital Agency Distribution & Marketing 11

Car Marketplace Platform Distribution & Marketing 8

Investment Advisory Platform Advisers 19

Advisers Enablement Advisers 4

Health and Digital Health Health 62

Financial Services and Payments Other FS 38

Other Other 37

Corporate Social Responsibility Other 13

Source: Accenture Research analysis based on data from CB Insights and a proprietary methodology using a customised taxonomy

DESPITE THE INVESTMENT IN FINTECH, THERE REMAINS A BIG GAP BETWEEN START-UPS AND FINANCIAL INSTITUTIONS

Startups• High risk• High change velocity • Delayed economic value• Seeks disruption

Startups

Financial Institutions• Low risk• Low change velocity• Immediate economic value• Disruption averse

Global 2000

Companies

INTRODUCTION TO OUR INSURTECHINNOVATION LAB

Copyright © 2017 Accenture Security. All rights reserved. 13

OVER THE PAST 8 YEARS, ACCENTURE’S4 FINTECH LABS HAVE MENTORED 154 STARTUPS

LONDON (EST. 2012)

• 23 partner banks / 5 associate banks• 56 alumniSample alumni:

NEW YORK CITY (EST. 2011)

•43 Partner Financial Institutions•47 alumni

Sample alumni:

DUBLIN (EST. 2014)

• 8 partner banks• 18 alumni

Sample alumni:

HONG KONG (EST. 2014)

• 12 partner banks / 8 associate banks• 33 alumniSample alumni:

170+ PoCs initiated

$530M Capital Raised post

FinTech Lab

490+ Jobs created post

FinTech LabOUTCOMES


OUR INSURTECH LABS BRINGS SENIOR EXECUTIVES AND STARTUPS TOGETHER

• The entire program is driven by the CTOs of global Financial Institutions who choose 8-12 start-ups for the 3 month program

• It is designed to help start-ups mature their offerings and build valuable relationships with decision makers and investors within the industry

• The objective of the lab is to progress offerings from proof-of-value to proof-of-concept and ultimately to successful commercial development

• The program has a series of structured activities to create engagement between the start-ups and senior executives from our partners, banks and insurers.

WHAT WE DO


THERE ARE FOUR CORE COMPONENTS OF OUR INSURTECH LABS

FINANCIAL INSTITUTION & VC MENTORSHIP

Mentors from at least three of the participating financial services firms’ technology teams and interaction with the participating VC firms

Access to users / business units within the financial services firms for product feedback

EXECUTIVES IN RESIDENCE

Current or former executives with backgrounds in various disciplines (e.g., technology, business, regulatory)

May also include members of the academic community (e.g., data science, Artificial Intelligence)

LEADERSHIP PROGRAM

Weekly sessions on issues relevant to early stage companies (e.g. procurement, POC, regulation) with experienced entrepreneurs and/or senior executives from the financial community

ENTREPRENEURS NETWORK

Opportunities for one-on-one mentoring sessions with FinTech and InsurTech entrepreneurs

Entrepreneurs are paired with startups based on area’s of expertise


WE LAUNCHED OUR FIRST INSURTECH LAB IN LONDON WITH 13 PARTNER COMPANIES


WE ARE IN THE PROCESS OF ROLLING OUT OUR INSURTECH LAB IN NEW YORK CITY

LondonFinTech Lab

Launch

Dublin & Hong Kong

FinTech Lab Launch

New YorkFinTech Lab

Launch

LondonInsurTech Lab

Launch

2011 2012 2014 2017

New YorkInsurTech Lab Launch

• Areas that will be of interest include: • Leveraging new data sources for underwriting and

claims • Applying artificial intelligence to the underwriting

and claims process• Facilitate a benefits marketplace• Develop new products for microbusiness and large

employers• Tackle core infrastructure tools (cybersecurity,

cloud enabling)

PARTNERS

IN YEAR 1, WE RECEIVED 96 INSURTECHAPPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS

34%

14%

52% Applications

Both Tracks (68)

InsurTech (29)

FinTech (106)

Both

69%

P&C

29%

Life

2%

Insurance Type

7 InsurTech Finalists competing for 4 openings

Customer Management

17%

Distribution14%

New insurance models

14%

New products 14%

Claims Processing

10%

Underwriting10%

Emerging or under-served risks

7%

Process automation

7%

Claims Assessment4%

Talent Management /

HR3%

Copyright © 2017 Accenture. All rights reserved. 19

IN YEAR 1, WE RECEIVED 96 APPLICATIONS FROM A DIVERSE RANGE OF OFFERINGS

Emerging or under-served

risks16%

Process automation

16%

Customer Management

15%New insurance models

12%

Claims Processing

10%

New products 9%

Underwriting6%

Distribution4%

Regulatory & Compliance4%

Claims Assessment

3%

Security3%

Talent Management /

HR2%


TOP 50, 25, 10 APPLICANTS BASED ON APPLIED TRACK AND OFFERING AREA

0

10

20

30

40

50

60

Top 50 Top 25 Top 10

Applied Track

Both InsurTech Track

0

10

20

30

40

50

60


Insurance Product Focus

Both P&C Life

0

10

20

30

40

50

60


Enterprise Customer

Both Retail Commercial


OFFERING FOCUS AREA BY TOP APPLICANTS

8

5

2

7

9

6

3

2

5

2

1

2

4

1

6 6

2 2

1 1

0 0

1

3

1

2

1 1 1

0 0 0 00

1

2

3

4

5

6

7

8

9

10

Focus Area

Top 50

Top 25

Top 10


TECHNOLOGY FOCUS AREA BY TOP APPLICANTS

21

1

8

25

28

53

6

25

13

46

12

9

0

5

1314

20

2

9

4

0

3

0 0

5

02

5 5

10

1

4

10

10 0

0

5

10

15

20

25

30

Technology Focus

Top 50

Top 25

Top 10

Insurance companies leverage access to real time consumer

data to create better customer profiles and ultimately

improve underwriting. With customer consent, we access

user data through connected home devices and

smartphones and combined with contextual data we

translate this into behavioral profiles. Insurers use this data

to improve underwriting models and promote additional

services (security, health monitoring etc) to their customers.


SAMPLE FINALIST INSURTECH FIRMS FOR THE 2018 COHORT

Underwriting | Under Served Risks

Smart cities are producing data – curates

feeds of city data and delivers predictive

insights that markedly enhance risk

assessment of prospective policyholders,

leading to better risk selection and

informed underwriting. .

Iot | New Insurance Models

IoT sensor technology and AI driven cloud

computing, company can collect, analyze

and deliver actionable insights about how to

mitigate the injury risk inherent to manual

materials handling positions.

Data Science Enabled Efficiencies

Enable carriers to underwrite commercial risk with just

business name and address of the insured. Our underwriting

platform uses data science to eliminate administrative

burden associated with insurance application / submission

processing, and supercharges underwriting decisions by

analyzing and synthesizing risk characteristics from a broad

array of external data sources.

Customer Management | New Insurance Models

FEATURED INSURTECHSTARTUPS

THANKYOU

march 2, 2018 insurance innovation executive board · the insurtech landscape is growing with close...

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