May 13, 2021
Trend Watch
We’re breaking records for Insurtech Investments
What: “This quarter, Insurtech funding reached an all-time high raising $2.55 billion across 146 deals. Specifically, total funding grew by 180% when compared with Q1 2020 … Compared to Q4 2020, total funding grew by 22% as investment activity steadily bounced back.”
Why it matters: This is the biggest quarter for investment in Insurtech we’ve ever seen. There’s a big need for modernization in the insurance industry and a massive opportunity for those who do it well. Expect the money to keep flowing in until the problems are solved. Right now there’s a Carrier IT problem that is causing too much friction in the market.
New Research
22% of UK adults now trust insurance companies less because of Covid-19
What they’re saying: Trust in insurance companies has suffered a net decline: 22% of adults trust insurance companies less because of Covid-19, while 11% trust them more. Over one in three (36%) believe that the insurance and protection industry did not do enough to help consumers based on their response to Covid-19.
What it means: A lot of policyholders were burned by their insurance companies last year, and those that weren’t heard about it. This growing distrust opens the door for new brands to step in.
Read: Financial Lives 2020 survey: the impact of coronavirus
Industry Challenge
Cyber faces rising costs due to increasing ransomware demands
Quote: “We thought the mid-six-figure demands were high at the time, Little did we know ransom demands were going to explode in 2020. … On average, even after the payments have been negotiated down, insurers still have to pay anywhere between $3 million to $5 million in these more targeted and sophisticated attacks.”
Rumor mill: Carriers are anxious for solutions to protect against cyber breaches, and some are starting to require two-factor authentication and other security measures.
Read: Cyber insurance claims explode in severity | Insurance Business
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