Insurance company funding reached $ 19.8 billion in 2021, an increase of 176% from the previous year, according to a report on Friday from research firm Forrester Research Inc.
Fourth-quarter financing hit a record $ 4.3 billion, while the first quarter raised the most capital at $ 6.47 billion, the report said.
Most of the fourth-quarter funding, $ 3.22 billion, went to the United States, followed by France at $ 336 million and India at $ 268 million, followed by Brazil, Canada and Germany.
Insurance companies continue to invest in insurtech and “recognize the value of innovation,” Forrester said. Property / non-life insurance companies are “generally longer on the digital experience curve than their counterparts in life”; and invested in technologies that simplify business processes, Forrester said.
The pace of digital transformation has accelerated and insurance companies must take steps to keep up, such as deciding which features can be developed internally and which should be done externally, Forrester said.
In addition to the record financing, the insurance companies are also consolidating in a “market rich in digital insurance companies, many of which have struggled to gain traction”, the report states, noting Lemonade Inc.’s acquisition of Metromile Inc. as an example.