S&P: India second-largest insurtech market in Asia pacific
According to S&P Global Market Intelligence data, India has the second-largest insurtech market in the Asia-Pacific region next to China. Its market accounts for 35% of the US$3.66bn of venture capital in the sector’s region.
Currently, there are around 335 private insurtech firms operating in the Asia Pacific with 122 of them disclosing US$3.66bn in aggregate capital raised through private placements.
Details of the S&P Global Market Research report
The report includes information on both China and India’s position in the APAC insurtech market. "China and India are collectively home to nearly half of private insurtech companies in the APAC region and attracted about 78% of the investments. The two markets will continue to corner the lion's share of investor interest on account of their large and fast-growing insurance markets”, the report said.
Stating specific details around India’s insurance market in the Asia Pacific, Sampath Sharma Nariyanuri, a fintech analyst with S&P Global Market Intelligence, said: "India is the second-largest insurance technology market in Asia-Pacific. India has at least 66 insurtech companies and accounted for 35% of the $3.66 billion in insurtech-focused venture capital invested in the APAC region," said "Insurance technology investors are attracted to India since it is one of the fastest-growing insurance markets in the world”.
In the twelve months ending on 31 March 2020, insurance premiums in India came to a total of US$107bn following a 5-year rise of 10% in the compounded annual growth rate (CAGR) from the 2015 financial year to the 2020 financial year.
The report also states: "While big techs are vying to become digital intermediaries in the insurance space, established carriers are building proprietary digital channels. Startups that assist both incumbents and big techs in making this transition will likely emerge as winners”.
CB Insights: US Insurtechs Are Competing In A Global Market
In the first half of the year, insurtech companies around the world have raised US$7.4bn, nearly doubling their funding in Q2. According to Digital Insurance, insurtechs have raised US$4.8bn in Q2—an 89% increase in funding from Q1. But US firms are no longer the sole beneficiaries.
What Are the Stats?
Out of the 15 Q2 mega-rounds—those that top US$100mn—only eight included American firms. Pretty good, you might say. That’s over half! But US companies only made up 38% of the deals, which marks a 10% drop from Q1 and a 12% drop from 2020. Technically, therefore, US insurtechs are less influential than they’ve been in the past. But who says this is a bad development?
Despite my American citizenship, I’d argue that a more globally diverse insurance market is only for the best. Many of the world’s citizens who could most benefit from improved insurance services live outside of the States—and deserve local, tech-savvy services.
Why Does This Matter?
You’re always going to see the typical insurtech contenders from Western countries. For instance:
- German-based wefox: US$650mn Series C
- UK-based Bought By Many: US$350mn Series D
- US-based Collective Health: US$280mn Series F
But it’s critical that we address risk across the world. American insurtechs might be some of the most technologically skilled firms in the industry, but it’s not their first goal to address floods in Southeast Asia, crop destruction in China, and COVID complications in South Africa. That’s why we should celebrate that the recent Q2 round included insurtechs from 35 different countries.
According to CB Insights’ Q2 2021 Quarterly InsurTech Briefing, this was the first time that they’d observed insurtech activity in Botswana, Mali, Romania, Saudi Arabia, and Turkey. And ‘from a product, service, distribution, and underlying risk perspective, we—as a society and as an industry—are moving at an unprecedented speed’, says Dr. Andrew Johnston, Global Head of Willis Re InsurTech.
Just ask CB Insights. InsurTech value propositions have resonated with the world.