By David Gritz and Camila Faria
As 2023 comes to a close, it’s safe to say that the InsurTech investment landscape underwent a significant transformation this year, reflective of broader shifts within the tech and insurance industries. Amidst a backdrop of global economic recalibration, venture capital infusion into InsurTech startups witnessed a discernible contraction, marking a departure from the previously bullish years. This year’s investment climate, while cautious, has not dampened the innovative spirit that drives the sector forward, and strong startups continued to receive support while strengthening strategies to optimize costs.
Many founders have asked us in 2023, did investor pacing slow down? So, we tapped our network to get you access to the live data. And, we will use that data and our discussions with VCs in InsurTech to help you understand why and where we are going in 2024.
The insurtech sector of 2023 has been a crucible of challenge and change. Investment patterns have taken a sharp detour from the exuberant heights of previous years, as highlighted by a report by Dealroom.co, Mundi Ventures, MAPFRE, NN Group, and Generali. A 45% plummet in venture capital funding to $2.4 billion in the first half of the year marks a retreat not seen since 2018. This mirrors a broader 51% decline in overall venture capital funding, signaling a reevaluation of investment strategies across the board.
Despite the downtrend, the resilience of “good” startups, as noted by Mapfre’s global head of transformation, Joan Cuscó, is evident in their ability to secure capital. This selective endurance reveals a pivotal theme of 2023 — quality over quantity.
Despite funding headwinds, the sector’s commitment to digital transformation and enhanced customer experience remains unshaken. Insurers continue to embark on core systems upgrades, making it easier for InsurTechs to work with them. And, almost any life insurer you speak to is looking for new forms of distribution to close the uninsured and underinsured gap. Distribution-centric startups continued to attract interest from investors as long as they could prove traction.
Most reports on InsurTech are published with secondhand data from CB Insights and Crunchbase that is not 100% validated. So, we decided to contact the VCs directly for the data after an initial review of Crunchbase and their websites.
For our research, we contacted 20 Venture Capital firms that explicitly have InsurTech investing as part of their strategy or are primarily funded by single insurer LP. 18 of the firms shared their data with us and 11 allowed us to publish their data. The data is current as of January 10, 2024.
The data below shows the number of new investments (excluding follow-ons) per partner
InsurTech NY’s examination of top VC funds pacing in 2023 unveils a landscape of discernment and precision. Most funds focused on supporting their existing portfolio companies to get them to default alive status instead of funding the next wave of startups.
Markd‘s pronounced increase in investments illustrates a bold and strategic assertion of confidence in the industry’s potential. In contrast, other seasoned investors like Munich Re Ventures and Nationwide Ventures have recalibrated their portfolios, indicative of a broader investment community treading with caution as funds are increasingly seeking out ventures that not only innovate but also demonstrate a clear path to profitability and scalability.
The consistency from firms such as Sure Ventures, which neither increased nor decreased their investment frequency, reflects a considered approach in an unpredictable market. Looking back on the year’s trends, partner Gopi Rangan commented, “Insurance is a large industry with many opportunities for innovation. Unlike in the years past, startups with healthy unit economics will build a strong foundation to transform the industry. I am excited to see many positive trends in the upcoming year ahead.”
The data reflects that InsurTech Fund, our fund was the third most active on a per partner basis. While it may seem like an anomaly, it is directly in line with our strategy to support 5 – 8 new startups per year from our fund. Since we sit in the seed stage, we must act as a feeder for many of the later-stage funds and our pacing reflects that trend.
Forecasting 2024: Expectations and Opportunities
We are also excited about positive trends in 2024. We are looking forward to the next generation of Insurance products in niche and specialty markets like those who have gone through our MGA Lab. Parametric solutions like Sola and Otonomi can simplify cover; cat-exposed solutions like Greenshield Risk and SPIN can support policyholders in states where larger insurers have left the market; and new category solutions like Batteryze and 5×5 can expand or enable commercial markets to function. This trend for new products will coincide with deeper integration with big data, AI, and predictive analytics to improve risk selection and workflow automation.
With all of the opportunity ahead of us, we see Venture Capitalists pivoting in 2024 to make new investments once their current portfolio is protected.
If you are a founder who is actively raising money in Q1, we want to hear from you about your experience. Happy to add your experience or quote to the bottom of this article. Please respond to our LinkedIn Post or reach out at contact@insurtechny.com.
We proudly announce that the Digital MGA Lab Cohort 2 has been selected.
Meet our cohort of 12 companies with their associated lines of business.
General Aviation
Crop Contract Cancellation
Battery Warranty
Fertility
CAT exposed homeowners
Medical Stoploss
Term Life
Small business
Luxury auto residual value
Air cargo
Florida homeowners
Small business
The competition features a prize pool of $200,000 that will be selected by three judging groups – InsurTech Fund, carriers and brokers, and InsurTech investors. Startups will be judged based on their expression of the most commercial potential in the application. The top ten teams will present live at the InsurTech Spring Conference held on March 29 – 30 in NYC to the entire conference audience.
The 2022 InsurTech competition finalists presented to an audience of more than 600
The judging pools are comprised of insurance carriers/brokers, venture capitalists, and angel investors. Judges will score each company based on their investment and market potential. The judges represent organizations including Avanta Ventures, Candid Insurance Investors, Founders Shield, Gallagher, Lockton, Park City Angels, QBE Ventures, Starr Insurance, TIAA, and Tokio Marine.
“Every InsurTech needs exposure and investment to grow,” said David Gritz, Managing Director of InsurTech NY. “Past competition winners have attracted more than $45 million in funding post-competition and had exposure to hundreds of insurance carriers and brokers.”
Contestants are eligible for the InsurTech competition if they ended 2022 with less than $250,000 in revenue. The top ten finalists will be announced in early March and will present in person at the 2023 InsurTech Conference. The deadline for submissions is February 10, 2023.
This article was published in February 2022. For up to date information on our most recent startup competition, including this years competition finalists announced, click here.
Over 120 applications were carefully deliberated by 27 judges…
With that, we’re excited to announce the FINALISTS in our global competition!
Riskwolf – Riskwolf enables insurers to build and operate parametric coverages at scale. With Riskwolf, you can turn real-time data into insurance. Using unique real-time data and dynamic risk modeling, we enable insurers to build and operate parametric insurance for digital risks.
Gigaforce – Gigaforce delivers award-winning innovation to simplify subrogation for P/C claims executives by maximizing recoveries and preventing future losses.
Healthee (Fka Insurights) – Healthee’s innovative AI-driven app simplifies healthcare navigation, providing fast, accurate guidance on plans, providers, costs and more. Our mission is to improve health outcomes by eliminating confusion around benefits and coverage.
Patientory – Patientory empowers you with control of your health data, so you can earn personalized reward based payments to maximize your health.
LISA – We help insurers around the world resolve their clients’ claims in a simpler , easier and faster way thanks to the use of artificial intelligence and automation tools.
Phalanx – Phalanx provides human-centric data security through easy, secure file transfers & storage.
Bubble – Digital Insurance Agency-in-a-box for Real Estate Companies – Streamline & Monetize Insurance, overnight!
Hosta A.I. – Artificial intelligence with human-like perception of the built environment, advanced AI expertise, and spatial data delivers exceptionally accurate insights with an unparalleled confidence level, outperforming conventional property inspections.
OneClick Code – Nationwide, address-specific roofing codes with OneClick. Made for contractors, adjusters, and insurance carriers.
ConsumerOptix – A SaaS Insurtech offering Term Life Insurance policies from multiple life carriers, through traditional insurance channels – in as little as 15 minutes, all driven by direct carrier integrations and AI. Patent Pending (63/394,480)
Vaartani – AI-powered Managing General Agency (MGA) for insurance coverages to eCommerce businesses.
All finalists will present at our Spring Conference, which is NEXT WEEK: https://digitalorcustomerfirst.eventbrite.com
This article was published in February, 2022. For up to date news from InsurTech NY, click here. For upcoming events and conferences, check out our events page here.
Ever wondered how many InsurTech startups are in NYC. Just look at this map of New York City insurtech startups specific to Manhattan from Fall 2021 to get an idea. The community is constantly changing and growing, and InsurTech NY is excited to be supporting entrepreneurs, carriers, and investors seeking the next game-changer for the insurance industry!
Are you part of our community? Contact us to find out ways we can work together. And don’t forget to signup for our newsletter on our website, or via linkedin too!
Over the last several years, NYC has established itself as the capital of insurance technology (aka InsurTech) by becoming home to numerous disruptive companies and startups focusing on property & casualty, health & benefits, and annuities. And, if you’re in the industry, this shouldn’t come as news to you.
To begin with, the city is home to many Fortune 500 insurance companies, such as AIG, Metlife, Marsh, Chubb, New York Life, Prudential, and Travelers. With these large financial services companies in such close proximity, startups have more opportunities to establish partnerships with these industry giants.
Aside from its proximity to nearby insurers, New York City’s supply of innovative marketers and creative capital has made it a hub for InsurTech. Madison Avenue, located in the heart of New York City, has long been where companies go to build brands, develop products, and make themselves known.
On a separate note, NYC is also arguably one of the best cities in the world to host events. After all, it’s a diverse city with much to explore– warranting an extended trip to take in all the sights even after attending a Big Apple event.
With all that being said, it’s obvious that New York City has not only the best insurance events and companies in the country but possibly in the world. In particular, these are the five NYC insurtech events that should be marked on your calendar.
During the three days at the iconic New York Marriott Marquis, you’ll experience a noteworthy lineup of speakers and sessions focused on industry trends and numerous networking opportunities to connect with colleagues. In fact, on each day you have a chance to mingle with the FICP during dedicated networking blocks or during breakfast and lunch. Unlike the other NYC InsurTech Events listed in this article, this event is more focused towards the insurance industry in general.
There are also plenty of educational sessions focusing on areas like how to lead more effectively, contract negotiations, emerging technology trends, and the latest financial and insurance trends. The registration fee is $215.
Taking place at The Westin New York at Times Square, this is the premier and must-attend event for employment law. During the two days, experts will discuss and debate the latest and most effective defense strategies in a wide range of topics. Some of the topics covered include the state of the EPLI market, the great resignation, and biometrics and data privacy.
Pricing to attend the conference is $1,795.00 if by December 10 or $1,995.00
By January 25. If you can’t attend in person, you can participate in a real-time broadcast.
If there is a single NYC InsurTech Event that should not be missed, it is the annual InsurTech NY Spring Conference. The annual spring conference of insurance innovators and InsurTech leaders is being held in NYC by InsurTech NY, specifically at the Marriott Marquis on Broadway. Insurance carriers and brokers that have been making strides in innovation will be speaking at this all-day conference from 8 a.m. to 6:30 p.m., along with InsurTech startups that are disrupting the market.
For 2022, this premier insurance conference will concentrate primarily on whether insurers should be digitally-first or customer-first. This will be discussed through panels including “The Small Commercial Distribution Battleground,” “Lessons from Insurtech Unicorns,” and “Emerging and Adjacent Insurance Products.”
Additionally, during this conference, the largest InsurTech competition will also take place. Here, the top startups will pitch to investors and insurance executives from a pool of more than 100 applicants. There are also plenty of beneficial networking opportunities for industry professionals to expand their networks. Tickets are reasonably priced between $450 to $850.
Held at Convene’s One Liberty Plaza location, this conference will focus on innovations in areas like artificial intelligence tools, techniques, and applications. You will also be able to hear from 90 different industry leaders.
This year, the AI in Insurance Summit will offer participants a chance to learn and collaborate over a number of stages through roundtables, Q&As, or one-on-ones. If you can’t attend in person, there is a virtual option.
Depending on when you register or if you’re a startup or student, pricing ranges from $595 to $1,495.
The convention takes place at the Javits Center, one of the busiest convention centers in the United States. During the two-day event, you’ll hear about the latest trends and issues that organizations are facing from numerous industry experts. And, there will also be several networking opportunities as well.
General passes are priced at $995.
While attending the NYC insurtech events above should be more than enough, you might as well use this to explore the city that never sleeps.
If this is your first time in the Big Apple, there’s nothing wrong with visiting common tourist destinations like Times Square, the Empire State Building, or even catching a show on Broadway. But, if you’re looking for something unusual and more memorable, here are some unique suggestions courtesy of Kelly the Girl With a Passport;