Investment in UK insurtech hit £218m for the first half of 2017

30% of all insurtech deals in Europe took place in London, followed by Berlin and Paris (10% each), Stockholm (6%) and Edinburgh (4%)

Investment into UK insurance technology (insurtech) is at a record high – as London leads the way as Europe’s largest tech hub.

One of our best business ideas of 2017, new research from Accenture has revealed that £218m was pumped into UK insurtech businesses in the first half of 2017, compared to just £7.3m for the first six months of last year.

Cloud computing, the Internet of Things (IoT) and big data technologies attracted the most investment in Europe as a whole, with $268m being invested in 2017 in cloud technologies alone.

A major coup for the UK, Gryphon Insurance raised £180m in June, though even without it, funding still rose from £7.3m to £38.3m year-over-year, an increase by 422%.

Putting this figure into perspective, the rest of Europe only raised $134m combined in the same period.

UK insurtech start-ups that successfully raised finance included Series A rounds by Bought By Many (£7.5m), Tractable ($8m) and Neos (£5m).

In total, 33 deals insurtech invesment deals went down in Europe and the UK in the first six months of 2017, up 33% year over year.

Despite uncertainty following the UK’s vote to leave the European Union, the UK continues to set the pace in insurtech investment.

London remains Europe’s largest tech hub – with 30% of all insurtech deals in Europe taking place in the nation’s capital – followed by Berlin and Paris (10% each), Stockholm (6%), Edinburgh (4%) and Zurich and Munich (3% each).

Deal activity in the UK accelerated in 2017, with a quarter of all UK insurtech deals since 2010 made in the first half of this year – with the number of deals jumping by 75% from the same point last year.

Looking at the second half of the year, digital mortgage broker Habito has today announced a £18.5m Series B raise, pay-as-you-go insurance platform for gig economy delivery drivers Zego raised £1.225m in seed funding in July, while AI-driven insurtech app Brolly bagged £1m in July also.

Similar to the way tech has disrupted other industries such as fintech (finance), proptech (property), adtech (advertising), insurtech start-ups generally try to add transparency to a traditionally opaque sector, instill more trust in customers and attempt to offer better value via an online service.

Roy Jubraj, Accenture’s digital and innovation lead for insurance, said:

“2017 is looking like the year of UK insurtech, with a dramatic increase in investment and deals in the last 12 months. Europe overall is gathering momentum, with the UK topping the table and confirming its place as a global hub for insurtech.

“This year the UK witnessed one of the largest global insurtech deals, which is a strong sign for UK investment and something the UK will be mindful in preserving as we move towards a post-Brexit economy.

“Deals in cloud computing and the internet of things are particularly accelerating. The explosion of data made available by an increasingly connected world is bringing unprecedented change and allowing modern insurers to understand customers and create personalised, dynamic relationships with consumers.

“Investors can see the potential in this and are backing efforts to unlock the value of technologies. That is why we are seeing deals that range from an app for buying short-term car insurance to a connected home solution that complements home insurance policies.

“Most interestingly, we are seeing life insurance-related deals which hasn’t typically been poised for disruption before. Investors backing disruption in this space suggests life insurers are at a big turning point.

“The challenge remains on how these technologies can make a real impact for consumers, and for insurers who need to keep pace with a rapidly-changing world.”