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12 December 2017

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InsurTech investment stays flat at $1.1bn this year

Dan Ascher 6 December 2017

Investment in InsurTech ventures is set to remain roughly flat at near $1.1bn this year while the focus of funding could change, according to Andrew Robinson, executive in residence of venture investing firm Oak HC/FT.

The $1.07bn raised by InsurTech firms last year included a headline-grabbing $153mn investment in pay-as-you-drive insurer Metromile, Robinson noted, "which made the numbers look very large" while it also suggests a more robust level of funding this year.

But as the mix of investors changes, so will the focus of the investments they make, Robinson said today in remarks at The Insurance Insider's InsiderTech conference in New York.

A small but notable shift in investment focus became evident this year as interest strayed from the distribution and "full-stack solution" spaces.

Investors instead have turned to what Robinson described as the "enterprise domain", which includes tools and services to assist claims, underwriting and customer experience, as well as the internet of things, or IoT.

"We think that's a trend that's going to continue," he said, adding that in the next two years investment in such spaces would likely rise.

"That's where the bulk of the investment will probably be in the next one to two years," Robinson said.

Simultaneously, the executive said, incumbent players have moved into the market, adding that "it's no surprise" that they would focus on enterprise solutions.

"These are trends that aren't just here today, they will increase over the course of the next couple of years."

But one thing is likely to remain constant, Robinson said.

"What's really interesting here is if you go back over the course (of the) last couple of years there really has not been a great deal of change in terms of where the money is going," he said. "It's still going to early-stage investments."

"Seed and series A make up more than 50 percent of the investments on a number-of-deals basis and a little bit less than that on a capital basis," he went on.

"This is still very much an early-stage market."

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