Welcome to iLeads Insurance Market Minute, where we bring you the latest, most relevant news regarding the insurance market. Last week you were reading The Insurance Impacts Of Biden’s ‘180-degree’ Approach. This week we’re bringing you:
Record-high insurtech funding hits $7.1 billion in 2020*
Global investment in the insurtech sector reached an annual high of US$7.1 billion (approx. CA$9 billion) for 2020 despite the challenges faced by the re/insurance industry throughout the year.
According to the latest Quarterly InsurTech Briefing by Willis Towers Watson, there was a total of 377 insurtech investment deals in 2020, the most in any year to date. Versus 2019, total funding increased by 12% and deal volume was up 20%.
Insurtechs brought in US$2.1 billion across 103 deals in the fourth quarter, with 67% of the funds attracted by property/casualty-focused firms, according to the report. Life & health insurtechs had a decrease of 1.6 percentage points for the quarter.
Willis Towers Watson took note of several fourth-quarter fundraisings exceeding US$100 million by later-stage companies such as Hippo, Unqork, Waterdrop, Oscar Health, Bind Benefits, and Newfront Insurance, who amassed US$1.1 billion collectively.
Premium financing critical for agencies to offer as businesses recover*
The hurdles in the current insurance marketplace are manifold and include the ongoing impacts of the COVID-19 pandemic on businesses and individuals across the United States. A hardening insurance market has brought rising premiums, reduced capacity, and more challenging underwriting conditions.
To navigate through this tough environment, insurance agents can turn to premium financing solutions to help their clients. However, traditional premium financing offers far less potential for profit and reduced flexibility for agents in comparison to owning their own premium financing subsidiary.
“With the impact of COVID-19 on businesses – especially small businesses – premium financing is not only something that has been very necessary during the pandemic,” said Chris Gebhardt, chief technology officer at COST Financial Group, “but it will also be important in the recovery.”
Insurance services firms well-positioned for growth: Report*
The outlook for insurance services firms, including insurance brokers, health services companies, and warranty and claims administrators, is stable, Standard & Poor’s Global Ratings said in a report Thursday.
The sector should benefit further from rising insurance prices, which may moderate into 2021, and will likely see continued merger and acquisition activity, the report said.
“We now expect most brokers we rate to close out the year at flattish to slightly positive organic growth – light for a normal year but a win for 2020, in our view,” S&P said.
Companies in the group proved resilient in 2020.
“While trends varied by subsector, insurance service firms have shown overall resiliency amid the pandemic and global economic downturn,” S&P said. “We believe all subsectors will demonstrate growth and profitability in 2021, though risks remain relative to the pandemic and still fragile economic recovery.”
S&P economists forecast global economic expansion to resume in 2021.
“We believe brokers are well-positioned for solid growth and profitability in 2021, though risks and uncertainty certainly remain with the pandemic still abound and the economic recovery in fragile early innings. Overall, we believe insurance brokers will demonstrate solid performance this year,” S&P said.
Finding highly affordable leads to keep sales coming in
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