The Insurance Technology sector (insurtech) is one of the hottest technology sectors and has seen funding and exit momentum over the past few years. Yet what are the different components of insurtech and how do they make up this startup ecosystem? On our insurtech research platform, we have classified the companies in the sector into functional categories. This blog post examines these categories and how they compare with one another through a series of graphics.
Insurance Comparison/Marketplace Is the Largest Insurtech Category
Let’s start off by looking at the Logo Map for the Insurance Technology sector. As of January 2018, we have classified 1,422 insurtech startups into 14 categories which collectively raised $19 billion in funding. The Logo Map highlights the number of companies in each category and a random sampling of these companies.
We can see from the Logo Map above that Insurance Comparison/Marketplace is the largest insurtech category with 406 companies. This category is comprised of companies that serve as a marketplace for consumers to buy insurance of any kind (from car to home to health), or to compare different insurance providers. Some example companies in this category include CoverHound, Goji, PolicyGenius, and Coverfox Insurance.
We have seen what the different categories in insurtech are and how many companies are within each category. What about their funding and maturity in relation to one another? Let’s look at our Innovation Quadrant to find out.
Most of the Insurance Technology Categories Are Pioneers
Our Innovation Quadrant for the insurtech sector divides the categories within the sector into four different quadrants according to their average funding and average age. The Heavyweights are the companies that have reached maturity with significant financing. The Established are those that have reached maturity with less financing. The Disruptors are less mature but with significant financing. The Pioneers are less mature and with earlier stages of financing.
We can see from our Innovation Quadrant above that most of the categories within Insurance Technology belong in the Pioneers quadrant. The Health Insurance, Auto Insurance, and Life, Home, P&C Insurance categories have raised more funding and thus made their way into the Disruptors quadrant. The Reinsurance category is in the Heavyweights quadrant for having reached maturity with significant financing.
We've now seen how the insurtech sector is categorized and the relative stages of innovation for those categories. How do these categories stack up against one another in a holistic view? Let’s look at the Total Funding and Company Count Graph.
Health Insurance Startups Have the Most Funding
The graph below shows the total amount of venture funding and company count in each insurtech category.
We can see from the graph above that while Insurance Comparison/Marketplace has the most companies in the insurtech sector with 406 companies, it’s the Health Insurance category that leads the sector in total funding with around $10 billion. The Health Insurance category is comprised of companies that offer health or travel insurance, either for individuals or for businesses. Some example companies in this category include Oscar Health, InstaMed, Patientco, and SimplyInsured.
Conclusion: Most Insurtech Categories Have Large Growth Potential
The graphics above indicate that most of the insurtech categories are still in their infancy in terms of their funding and maturity. In addition, the sector is bustling with a good number of Insurance Comparison/Marketplace companies. Yet the Health Insurance category has received the most funding. It will be interesting to see if this trend continues in 2018.