Global insurtech market to reach $158.9B by 2030, report

Global insurtech market volume reached $10.6B in 2021 and is expected to grow to $158.9B by 2030, according to the Global Insurtech Industry Report 2022 from Drake Star, a tech-focused investment bank.

The report notes a general increase in insurtech M&A activity. There were about 70 deals completed by June 2022, a 60% increase in total volume from 2021. In the past five years, funding in the space has also increased by about 35%. The adoption of new technologies, related to consumer expectations, has likely led to increased M&A activity, the report suggests.

“Insurtech dealmaking in recent years has picked up substantially,” Christophe Morvan, managing partner at Drake Star, said in a statement. “The opportunity to transform traditional, legacy-driven processes remains massive especially as insurance companies look to face multiple challenges in the coming years to adapt to the pandemic’s aftermath, such as economic hurdles; the potential for sustained inflation; sustainability concerns; climate risk; diversity and financial inclusion; and others.” 

Although there has been a downturn in the market, the report states that there is still room for optimism and to expect market consolidation in the future. The future of insurance is likely in prevention and assistance services, the report notes. 

“The insurance sector is facing unprecedented change in a rapidly evolving ecosystem,” said Julian Ostertag, managing partner & member of ExCom at Drake Star, in a statement. “Despite lingering concerns about COVID-19 variants, most insurers have responded well to accelerated economic recovery in early 2022, with the industry posed for strong additional technology investments, fueled by post-pandemic optimism and strong economic tailwinds.”

Trends to watch for include embedded ecosystems, AI and machine learning in pricing and underwriting; parametric insurance, further telematics adoption, blockchain and low-code technology.

Additional findings to note:

2021 included over 800 funding rounds with more than $16.7 billion in disclosed deals.
85% of insurers see digitization as the number one priority. 
Total deal volume grew by 23% in 2021 compared to 2020.