Insurtech funding surges in 2018 as key players expand: Deutsche Bank

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Insurtech investment volumes increased by more than 60% between 2017 and 2018, while key players such as Lemonade and Amazon also expanded their operations over the year, according to analysts at Deutsche Bank.

Deutsche Bank data shows that insurtech investments (across all stages) totalled US $2.6 billion during the first three quarters of 2018, compared with $1.6 billion for the same period in the previous year.

This equated to an average $14 million investment per deal for the 184 deals transacted in 2018, versus $10 million per deal for the 152 recorded in 2017.

Ledger closes non-standard auto insurance securitization with AlphaCat

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Insurance technology (insurtech) and insurance-linked securities (ILS) start-up Ledger Investing has successfully completed its first transaction, directly securitizing a portfolio of non-standard passenger auto insurance between an MGA and the AIG-owned ILS fund manager AlphaCat.

The transaction is a step away from the more typical property catastrophe risk exposures that are securitized for ILS funds and ILS investors, but Ledger had always hoped to expand the securitization of insurance risk outside of typical classes of business in an effort to broaden the market.

This first transaction saw Ledger Capital Markets (LCM), the broker-dealer entity of Ledger Investing, acting as the structurer and bookrunner for a bilateral ILS transaction between an MGA arm of AmWINS, as the originator of the risk, and AIG-owned specialist insurance-linked fund manager AlphaCat Managers Ltd. as the ILS investor on behalf of one of its fund strategies.

Blockchain’s future in insurance takes shape

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The re/insurance industry holds high expectations for blockchain technology as an opportunity to increase efficiency of insurance processes, and the future is beginning to take shape with the launch of new platforms and products. Intelligent Insurer reports.

Blockchain, also dubbed distributed ledger technology, is the technology behind digital currencies such as Bitcoin and is praised for the fact that it creates a secure ledger of information that prevents the unauthorised modification, addition or removal of data.

As blockchain systems are immutable and do not require oversight by a central authority, one of the advantages of this technology is that it opens up new options for secure collaboration between competitors by removing the need for trust between third party organisations.

Blockchain smart contracts unlikely to replace traditional processes: Solidum

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The nuanced complexity of a re/insurance contract makes it an unrealistic candidate for replacement by blockchain smart contracts, according to independent investment management firm Solidum Partners.

A smart contract is essentially an immutable piece of code embedded into the blockchain that can execute binary decisions such as the automatic transfer of value from one account to another.

Insurtech-Led Change in the Lloyd’s market

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Over the last eighteen months, InsurTech has moved beyond being seen as a hostile entrant into the general insurance landscape and has become synonymous with innovation activity throughout the industry. Moreover, the impact of innovation is now being felt in the core business and by customers, and not only in limited experiments in segregated hubs and labs.

Within many Lloyd’s managing agents there is growing evidence of collaborative innovation as insurers buy, borrow and build the capabilities required to compete in a changing landscape. We have seen the creation of innovation teams, appointments in areas such as artificial intelligence and blockchain and the creation of new roles such as Chief Data Officers, Digital Officers and Heads of Innovation.

But what does this all mean?

We believe that this activity is evidence that innovation through new technology and data is becoming the norm, but little has been written about the impact specifically on the specialty market. That is why the LMA asked Oxbow Partners to explain why and how InsurTech is now relevant for corporate & specialty insurers and reinsurers and to provide some strategic ‘guiderails’ to help managing agents develop their response.

We hope you find the report useful.

Tom Payne Director of Market Operations LMA

Bermuda set to lead reinsurtech revolution

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Technology revolution: a report and panel discussion has looked at Bermuda’s potential to lead a revolution in the use of new technology in the reinsurance sector.

Bermuda could spark a “reinsurtech” revolution, which combines insurtech with the island’s reinsurance expertise, according to panellists at an industry round table of experts hosted by AdvantageGo.

Insurtech will mean job losses and less demand for reinsurance

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The relentless evolution of insurtech will ultimately mean job losses and potentially a decline in the requirement for reinsurance globally, Clive O’Connell, partner and head of insurance and reinsurance at law firm McCarthy Denning, told Monte Carlo Today.

He said it will make reinsurers more efficient and revolutionise the reinsurance landscape in the process.

“Insurtech will affect reinsurance as much as insurance as people look to efficiencies to reduce the expense ratio. This will mean fewer people employed in the sector,” O’Connell said.

InsurTech – show me the money

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12 months ago, a surge of interest in ‘InsurTech’ prompted a serious case of the FoMOs in many (re)insurance CEOs. This year, that Fear of Missing Out has been replaced by a fear of becoming distracted by unproven, niche technologies that are unlikely to move the dial. Oxbow Partners has helped many of its clients remain at the pragmatic end of the technological changes in the industry. In this article (first published in their Impact 25 report) they discuss the challenges and opportunities for carriers looking for material benefits from new technology.

Another astute observer of the impact of new technology is Adrian Jones, the Head of Strategy and Development at SCOR Global P&C. In this analysis with Matteo Carbone he looks at the hard numbers being filed by some of the most hyped insurtechs. They reveal that companies like Lemonade still have a long way to go before they can be sure about their business models.

InsurTech – show me the money

ORIGINAL PUBLICATION HERE

12 months ago, a surge of interest in ‘InsurTech’ prompted a serious case of the FoMOs in many (re)insurance CEOs. This year, that Fear of Missing Out has been replaced by a fear of becoming distracted by unproven, niche technologies that are unlikely to move the dial. Oxbow Partners has helped many of its clients remain at the pragmatic end of the technological changes in the industry. In this article (first published in their Impact 25 report) they discuss the challenges and opportunities for carriers looking for material benefits from new technology.

Another astute observer of the impact of new technology is Adrian Jones, the Head of Strategy and Development at SCOR Global P&C. In this analysis with Matteo Carbone he looks at the hard numbers being filed by some of the most hyped insurtechs. They reveal that companies like Lemonade still have a long way to go before they can be sure about their business models.

Insurance 2030 – The impact of AI on the future of insurance

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The industry is on the verge of a seismic, tech-driven shift. A focus on four areas can position carriers to embrace this change.

Welcome to the future of insurance, as seen through the eyes of Scott, a customer in the year 2030. His digital personal assistant orders him an autonomous vehicle for a meeting across town. Upon hopping into the arriving car, Scott decides he wants to drive today and moves the car into “active” mode. Scott’s personal assistant maps out a potential route and shares it with his mobility insurer, which immediately responds with an alternate route that has a much lower likelihood of accidents and auto damage as well as the calculated adjustment to his monthly premium. Scott’s assistant notifies him that his mobility insurance premium will increase by 4 to 8 percent based on the route he selects and the volume and distribution of other cars on the road. It also alerts him that his life insurance policy, which is now priced on a “pay-as-you-live” basis, will increase by 2 percent for this quarter. The additional amounts are automatically debited from his bank account.