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  5. Five Trends Shaping Today's Rapidly Evolving InsurTech Landscape

Five Trends Shaping Today's Rapidly Evolving InsurTech Landscape

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20 January 2023
Andrew Schwartz

Abstract

Oh, what a difference a year makes! 2021 was a year marked by jubilant economic euphoria. Already at record-high valuations, companies enjoyed bumper earnings, and many were optimistic that the party would continue in full swing. With near-record low-interest rates and cheap credit, companies could continue to grow without deep concern for profitability.

A year later, the dreams and aspirations of many InsurTechs have come to a screeching halt. Through the third quarter of 2022, InsurTech funding is down 31% on an annualized basis. The number of InsurTech financings over $50M has dropped by 23% during the same period, and there has not been a single new InsurTech unicorn this year for the first time since 2018 Another apparent sign of InsurTech’s decline is that it has been one of the heaviest-hit areas of the stock market over the last two years. Since January 1, 2021, the HSCM Public InsurTech Index is down ~65% compared to a ~20% drop for the Nasdaq index and a ~3% gain for the S&P 500.

When the dust settles, tomorrow’s InsurTech landscape may look markedly different than it does today. However, rest assured the InsurTech space will exist, and many carriers will be able to extract significant value from it. With crisis comes opportunity. This report will explore five of the top trends shaping today’s rapidly evolving InsurTech landscape with the hope of providing an accurate depiction of the current environment and clues toward predicting its’ eventual future state.

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