Insurtechs can increase market share in insurance premiums by 50% by 2023: Fitch
Insurtechs may add half again to their market share of global insurance premiums to hit the 6% mark by 2023, Fitch said in a report.
"Premiums generated by Insurtech companies are growing at rapid rates," authors said in their report, "What Investors Want to Know: InsurTech," largely devoted to arguing that insurer-insurtech partnerships will increase in count.
"We estimate that, until 2023, the market share of insurtech companies and platforms will increase to about 6% of total global premium from an estimated share of about 4% in 2020."
Short-duration high-volume P&C is the obvious insurtech segment preference, Fitch said, citing McKinsey data showing 66% of Insurtechs in the P&C space, ahead of 18% in health.
Automotive brings the commoditised approach, short duration, heavy data generation (telemetrics) and large-volumes that should have Insurtech swarming. Homeowners’ lines should also prove data-rich and open doors for Insurtech product innovation, Fitch believes.
The life side should get a longer-term free pass from Insurtechs who may be scared off by the long policy duration and extra depth of regulation, Fitch noted.
The insurtech market may be past the peak for start-ups. The number of start-ups has been declining globally since 2017 and the majority of funds was raised by a small proportion of those early movers, Fitch said. Successful early movers now have a serious leg up on the funding market vis-a-vis newer arrivals.
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