“The insurance space has typically taken a long time to evolve, even more so than the banking industry. It is weighed down by a lot of legacy systems, and the growth and adoption of InsurTech has been a little slower than other areas of FinTech. However, this is all changing quite rapidly. Last year, total investment into InsurTech companies increased by around 92 per cent going from €1.6bn in 2017 up to $3.1bn, according to data by FinTech Global.
Although the high level of capital flooding into the market might suggest it’s an idyllic sector ripe for the picking, there are still a lot of challenges facing the InsurTech sector, with Evans describing it as a ‘minefield.’ Struggles to be regulated quickly, identifying the best insurance partner, the levels of resources needed for testing and market fit, complex compliance requirements, a need of frequent fundraises and a lack of purchasing power with service providers, are just some of these obstacles facing InsurTechs he explained.
InsurTech Gateway head of deal flow Charlie Evans said, “Simply, it takes far too long, and is far too expensive, for startups to get to a position where they are able to test the product-market fit of their proposition. It’s the same old barriers to innovation InsurTech startups have been facing for years…”