Venture capital investors are riding to the rescue in an effort to modernize an industry that’s fallen behind other segments of financial services
Fintech continues to be a big disruptor in financial services and nowhere is this more evident than in wealth management where robo-advisors are taking the world by storm. Previously left unattended and unloved, venture capital investors are turning their sights on insurance businesses where innovation has been slower to develop.
"We’re just at the start of an insurance explosion here. I’ve seen more and more insurance companies in the US, Europe, and Asia getting started,” said Pascal Bouvier, a partner at fintech venture capital firm Route66 Ventures. “I wouldn’t be surprised if we tally the numbers on investment in insurance startups two years from now and it’s massive."
That’s great news for an industry that’s been caught in a time warp. Crowdfunding, peer-to-peer lending, robo-advisors, and many others have been transformed by significant investment in financial technology, yet insurance has yet to get on board. But that’s about to change.
"We’ve been speaking quite a lot about insurance recently, which isn’t necessarily the sexiest part of the industry, but I think there is an appetite for innovation in insurance that historically hasn’t existed,” fintech investor Amy Nauiokas told Business Insider earlier this year. "Seeing some of the new data-driven risk management products that are coming out is quite interesting. We’re watching that space really closely."
The most recent example illustrating how times are changing was evident just last week when Google announced it was investing $32 million in New York-based health insurer Oscar. Valued at almost $2 billion, the online insurer has 40,000 users in New York and New Jersey.
Industry disruption is often met with resistance but there are indications insurers are ready for a shakeup.
“Industry appetite is actually not something I was expecting from the insurance world," said Nektarios Liolios, the managing director of the programme, Startupbootcamp Insurance. "There seems to be a lot of hunger. I think they recognise that the financial world is in the process of doing this and the insurance world is lagging behind."
Advisors, get ready.
"We’re just at the start of an insurance explosion here. I’ve seen more and more insurance companies in the US, Europe, and Asia getting started,” said Pascal Bouvier, a partner at fintech venture capital firm Route66 Ventures. “I wouldn’t be surprised if we tally the numbers on investment in insurance startups two years from now and it’s massive."
That’s great news for an industry that’s been caught in a time warp. Crowdfunding, peer-to-peer lending, robo-advisors, and many others have been transformed by significant investment in financial technology, yet insurance has yet to get on board. But that’s about to change.
"We’ve been speaking quite a lot about insurance recently, which isn’t necessarily the sexiest part of the industry, but I think there is an appetite for innovation in insurance that historically hasn’t existed,” fintech investor Amy Nauiokas told Business Insider earlier this year. "Seeing some of the new data-driven risk management products that are coming out is quite interesting. We’re watching that space really closely."
The most recent example illustrating how times are changing was evident just last week when Google announced it was investing $32 million in New York-based health insurer Oscar. Valued at almost $2 billion, the online insurer has 40,000 users in New York and New Jersey.
Industry disruption is often met with resistance but there are indications insurers are ready for a shakeup.
“Industry appetite is actually not something I was expecting from the insurance world," said Nektarios Liolios, the managing director of the programme, Startupbootcamp Insurance. "There seems to be a lot of hunger. I think they recognise that the financial world is in the process of doing this and the insurance world is lagging behind."
Advisors, get ready.
