Reinsurers' support boosts InsurTech growth
Source: Middle East Insurance Review | Nov 2021
Reinsurers are actively supporting InsurTechs through investments and by providing underwriting capacity, according to the World InsurTech report 2021.
The report by Capgemini and non-profit organisation Efma said that reinsurers are developing digital tools and funding InsurTech with capital investments.
Examples include:
- Munich Re launched digital partners, which provides digital solutions and direct investments in select InsurTechs
- Hannover Re invested in finleap, a FinTech and InsurTech ecosystem incubator supported by Ping An funding and
- Swiss Re built iptiQ, an insurance platform that provides partners with digital processes and customers with protection products
Reinsurers are also collaborating with full-carrier InsurTechs to bolster their underwriting capacity so that they can focus on customers. Through these moves, reinsurers turbocharge InsurTech growth, particularly for InsurTech full carriers, as they maintain their position as the custodian of capital allocations across the insurance industry.
The report said big tech players and InsurTechs have become relevant and competitive. Facebook, Apple, Microsoft, Google, Amazon and Tesla boosted their market capitalisation by $4.8tn during 2018-2020, equivalent to 2.5x the total market capitalisation of the 30 largest insurers globally in 2020. The total market capitalisation of listed InsurTechs surpassed $22bn by the end of 2020.
With significant capital inflow from public markets, InsurTechs are fuelling their digital capabilities to turn up the heat on incumbent insurers, the report said. M