Fintech, ahhhh, Fin-Tech. It’s white hot in London. Actually, no, it’s hotter than that. If Fintech were a metal it would now be a globulous liquid right now and glow like the city at night.
Startups here, startups there, startups everywhere. As we’ve all self avowed London is an ideal place for innovation and disruption in this vertical. With our pedigree and layering of Financial Services institutions, rapidly expanding startup and entrepreneurial culture with growing access to early stage funding and an inspiring talent looking for new and exciting ways of doing things.
Indeed, we’ve “We’ve seen growth from 100s of businesses to 1000s in Tech City in just 5 years” — Gerard Grech. Tech City UK highlighted that the UK has produced more unicorns since 2000 than any other EU nation. Go us! Among them being the notable Fintech successes Transferwise and Funding Circle.
Indeed, these are just the tip of the spear for London’s Fintech ecosystem. Business Insider reported the growing number of FinTech unicorns about to be born out of the London melting pot, and speculated about who is closest to being next. They’re mostly alternative finance and investments businesses, as detailed in last years Nesta report.
London’s CityAM recently highlighted that “some of the most important financial and technology standards have been set in the UK, which explains why 42 per cent (£420m) of FinTech investments into Europe in 2014 were made in the UK and Ireland.” That’s right, 42%.
Exciting times, however, it’s notable that there’s not an insurance startup among them, even on the Fintech50. Why not? Insurance is a huge industry in the UK — the largest in Europe and third largest globally. PwC highlighted that the “long-term opportunities for insurers…are evident. But they are also bringing fresh competition, both from within the insurance industry, and a raft of new entrants coming in from outside.” — PwC,Insurance 2020 & Beyond
It feels as though this is about to change with traditional insurance companies opening up to the opportunities and risks associated with the digital innovation, disruption, and potential disintermediation. London is again leading the way in this sector too with aninsurance startup accelerator looking for early stage “…startups out there waiting to be discovered, and we want to nurture that untapped talent.” Could one of them be the first insurance unicorn?
Many industry players are getting their innovation on, for example Ruth Foxe Blader, FinTech investor at Allianz Digital Corporate Ventures, “we look to the agility and creativity of startups to support our broader ambition of strengthening Allianz through innovation” and Toby Strauss, Lloyds Banking Group’s director of insurance stating: “the UK insurance industry has seen an extraordinary amount of change in recent years which will rightly force it to fundamentally rethink the way it evolves and engages with customers”
It’s well publicised that existing UK Fintech startups are raising significant war chests in Series A investments — the “hottest spot in a bubbly funding environment”. The appetite is high from the investment community, the time is now to innovate insurance.
Don’t just settle for iteration, London, let’s lead the InsurTech — as well as the Fintech — revolution by putting customers at the centre and providing great experiences, simple interfaces and transparent services. And remember, the western world, especially the UK, is now mobile-first.
It’s a blank slate out there for insurance unicorns. For how long? With 2015 the year for Insurance Tech in London all this leads to a question: will your astute idea or investment be the first insurance unicorn? Only time will tell, but the hunting begins now.
Adam & The Lendy Team
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