CB Insights: Future of Insurance

The prevailing theme at the CB Insights: Future of Insurance conference on June 11 was a call to action for incumbents.

During his keynote speech, CB Insights managing analyst Matthew Wong laid out a few key facts to underpin this point.

By the Numbers:

• Global insurtech investment reached $4.15 billion in 2018
• The P&C insurance industry is becoming more competitive every single year; only 71 carriers now have net written premiums over $1 billion.
• The personal auto market share held by direct writers has grown by 9 % since 2008 while the share held by incumbents has fallen by 5 %.
  • Root Insurance’s direct written premium has risen from $3 million in Q4 2017 to $88 million in Q1 2019
• The small commercial market has reached $100 billion (up from $85 billion in 2003), but insurers will need to adjust to digital natives.
  • While just 5 % of SMB (small and medium sized business) insurance is bought through digital channels today, more than 60 % of SMBs in the United States will be owned by millennials and Gen Xers by 2020. 
• The cyber Insurance market has grown from $1.35 billion in 2016 to $2 billion in 2018, but insurers remain cautious.
• P&C-focused startups have outpaced life and health startups in number of deals since 2015

Wong noted there are many more signs of change in the insurance ecosystem. Increasingly, Wong said, we see that insurgent insurtech startups are “unbundling” multi-personal line carriers: Lemonade and Jetty snapped up renter’s insurance, Metromile and Root took auto insurance, Hippo covered home, CoverWallet and Embroker handled business insurance, and so on. With the increasing number of insurtech startups that have streamlined everything from the quote-bind process to claims processing, incumbents that do not quickly embrace technology may well find themselves hemorrhaging customers as more and more people turn to companies that can provide the “Netflix experience” when it comes to insurance.