InsurTech Europe: 10 Years Of InsurTech In Europe Analyzed Through 800+ Startups (based on data from astorya.io)
Translation from the original article, published in French in L’Argus de l’assurance (here), written by Gwendal Perrin.
astorya.io is the search engine for Insurance & Banking technologies in Europe.
How InsurTech startups are gradually gaining ground in Europe
InsurTech startups are moving the lines in the insurance world, says a study conducted by astorya.io for L’Argus. And their role in the transformation of the sector is still set to grow.
Unrecognized five years ago, InsurTech startups seem to have found their place in the insurance industry, despite pockets of resistance. A recent study by research firm Juniper thus underlines that globally they already account for 5% of the turnover of the entire market, a rate that is set to double over the next four years. But this groundswell covers distinct trends.
Thus, the United States and China have seen the emergence of a large number of new online insurers oriented B to C (business to consumer), the size and regulation of local markets allowing it. An approach that is less suited to Europe, even if Alan or Luko are showing cheeky growth.
Example: Maif announced in 2020 that it had won 66,000 new customers across all of its products. Luko, on home insurance alone, won nearly 100,000 — summarizes Florian Graillot, founder astorya.vc an InsurTech fund
But beyond these exceptions, the world of European InsurTech has experienced certain structural and historical trends, which astorya.io (database on InsurTech and FinTech, created by the founders of astorya.vc) analyzes in a study for L’Argus.
A mature ecosystem
First observation: the European InsurTech ecosystem has entered a phase of maturity for two years, as shown by the significant decrease in the number of newcomers. And for good reason: in France, Alan, Luko and Shift Technology have monopolized new financing, as has pet insurance specialist Bought by Many in the UK, or even, in Germany, players such as Coya and WeFox. For several years now, these three countries alone have grouped together three-quarters of the continent’s InsurTech startups.
Another highlight is the positioning of these newcomers in the insurance value chain. In this regard, the astorya.io study highlights one point: the preponderance of these InsurTech startups in the individual insurance segment, mainly car and home, to a lesser extent health.
P&C insurance products are simple, therefore standardized, and have low margins … For traditional insurers, they are primarily starter products. To gain a foothold, InsurTech startups must therefore rethink its distribution — emphasizes Florian Graillot.
Although there have been a number of failures in this segment, the founder of astorya.vc believes the market is far from saturated and new start-ups may appear: E-commerce is estimated to account for 30% of total commerce, almost 50% if outside of the food market. Where are we in insurance? Comparators represent 10% of the market … In short, if insurance follows other sectors of the economy, there is still plenty of room for these new digital native players.
An innovative model
In addition to insurance per se, InsurTech startups have also largely entered the niche of business software for insurers. “Insurers are still behind on tech issues, it is blessed bread for these companies,” notes Florian Graillot. In this category are found a number of French companies such as Akur8, + Simple, Shift Technology or Zelros. They have a great asset according to the founder of astorya.vc: “For investors, these companies are reassuring: their business model is easy to understand and, above all, can easily be duplicated internationally.”
Finally, there are still few startups in a line of business which nevertheless offers good prospects: commercial lines. Cyber risk is already on the rise, but subjects related to climate risks (where the Frenchman Descartes Underwriting is advancing his pawns), other digital risks or even those encountered by certain specific populations, such as freelance workers, still need to be cleared up.
