After rising for several years, the number of strategic InsurTech investments by re/insurers declined by 6% from its peak in the second quarter of 2018, but funding increased significantly. Eleven insurance-sector investors ploughed $218 million into InsurTechs in Q4, 2018, up 230% from the previous quarter. Currently the global industry maintains 31 strategic partnerships with technology companies, the highest number recorded.
The latest Briefing focuses on sophisticated new InsurTech tools to help manage cyber risk. It includes case studies of the InsurTechs Guidewire Cyence Risk Analytics (Cyence), which models the economic impacts of cyber; Corax, which builds analytics tools to support the design and pricing of new cyber insurance products; Paladin Cyber, which creates cyber-risk detection and protection tools; Zeguro, which builds tools to remove cyber threats; and ReFirm Labs, which devises methods to vet and validate hardware security.
Dr Andrew Johnston, Global Head of InsurTech at Willis Re, says: “Cyber is a multifaceted, ever-evolving phenomenon. The appropriate response to this is to task our industry with an equally multifaceted approach. Rather than trying to specialise and excel in each tenet required, InsurTechs offer our industry a huge opportunity through strategic commercial partnering to allow incumbent insurance firms the ability to become part of a broader, more resilient jigsaw puzzle.”
Mark Synnott, Global Head of Cyber at Willis Re, says: “There’s a healthy ecosystem of InsurTechs, insurers, reinsurers, and brokers working to quantify and price individual and portfolio cyber risk under affirmative coverage. More work needs to be done to address silent cyber, since potential accumulation exposure is enormous, but it is under way. For example, we have a module in our PRISM-Re cyber model that assesses exposure to silent cyber and several InsurTechs have developed software that deploys policy-analysis algorithms that help insurers expose and quantify silent cyber coverage. As the cyber threat grows, such tools will become increasingly valuable and commonplace.”
View the full report here.
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