Insuretech Investment On the Rise

Within the fintech landscape, is insuretech becoming the popular choice for investors? According to a Medici report, investment in insuretech, which it recognizes as a subcategory of fintech, was higher than investment in blockchain and B2B during the month of May.

Fintech investment trends broken down by industry indicate a clear surge in insuretech investment. With a total of 22 reported deals, totaling $423 million in value, insuretech, surpassed investment in B2B fintech, lending, the blockchain, AI, wealthtech, and cybersecurity.

The closest runner up in terms of amount invested was the B2B fintech industry. There were five funding deals in B2b fintech, totaling $275 million in value. Lending investments were the second highest in the number of deals, with 19 recorded deals last month, according to newly released data from Medici, a fintech news service.

In May, there was a total of $1.75 billion invested across fintech industries globally, according to the Medici report. This is a 20% decline from the $2.2 billion investment in April. This downturn in investment is only evident in the short scope. Year-over-year data tells a much different story.

Venture capital investment at the global scale reveals a consistent increase in insuretech investment, and hit an all-time high last year. During that year, there was $2.1 billion in VC raised by insuretechs, according to KPMG data published in February.

“2017 had the potential to be a very rocky year given huge political dislocations across the globe and a lot of economic uncertainty,” said Murray Raisbeck, KPMG global co-leader of fintech. “The fact we’ve seen consistent strength and investment into the sector is a reflection of the genuine value fintech is bringing to market.”

In 2016 $1.7 billion of capital was invested in fintech. In 2015 investment shot up from $912 million in 2014 to $1.9 billion in 2015 and has remained relatively high.

Some of the top players like Metromile, a car insurance startup, raised $205 million in funding in 2016, while Lemonade, a property and casualty insurance company, drew in $120 million in Series C funding from Softbank last year.

Two major deals last month were from American companies. Tradeshift, a business commerce company, raised $250 million last month. And Circle, a payments company with expertise in cryptocurrency, raised $110 million in funding in May. U.S. insuretechs received $1,063 in funding in 51 deals in May. India had the second highest amount of funding and deals last month, raising $250 million across 20 deals.

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Monica Melton is an Associate Editor at Bank Innovation. She has worked as a Staff Writer at eMarketer and written for Time Out New York, The Real Deal, and POLITICO among others. Monica obtained her M.A. in international journalism from CUNY Graduate School of Journalism and her B.A. in Communications from the University of Washington, Tacoma. She loves to cook vegan treats and dabbles in photography.