Technology has changed virtually every aspect of our lives including how we submit, review, process and consume information. You see it in everyday situations from the grocery store with fully automated cashiers to the airport where a passenger can check in, upgrade their seat, pay for additional services or obtain a digital copy of their boarding pass. The changes are everywhere, and the insurance industry is no different.
Through several new innovative applications, companies have transformed the way they facilitate customer service, simplify policy management, create new insurance offerings and enhance overall communication. The result has been a new industry connecting insurance companies with customers in meaningful and more profitable ways not previously considered. In fact, as of January 2018, there were 1,458 InsurTech companies operating in 68 countries.
As the industry takes shape, you may wonder where the InsurTech capital of the world is located. According to a report issued by Carrier Management, there are many cities – domestic and global – contending for the title. To help you understand the report and its significance, JLK Rosenberger has provided a summary of key details below.
About the Report
Although issued by Carrier Management, the report was compiled in coordination with data-analytics company Venture Scanner. When analyzing the data, they classified InsurTech companies as falling into one of several categories, including: automotive, employee benefits, commercial health, travel, consumer management, comparison/marketplace, data/intelligence, life, home, P/C insurers, P2P insurance and reinsurance. Key information was compiled from public sources, including venture capitalists, private equity and others. Finally, the company’s location was determined by their self-described location, generally related to their operational headquarters.
Where is the Capital City?
The capital of the industry depends on how you calculate the numbers. For example, if you simply calculate the cities with highest number of InsurTech firms operating in any given locality, then London is the global capital with 64 operational InsurTech startups. Notable mentions include New York City with 61 startups, San Francisco with 58 startups and Chicago with 36. However, when the calculation is changed to determine where the largest amount of funding for the industry is occurring, London sinks to 12th place with Palo Alto and San Francisco dominating the top two spots with more than $2 billion in funding each. Notable mentions include New York City and Shanghai with nearly $1.2 billion raised by companies in their respective cities.
Most Start-ups by State
While the global capital city may be up for debate, California is the leader in the United States. According to the report, California has the most InsurTech startups with 106 located throughout the state representing a variety of categories, including health and property and casualty insurance. New York state has the second highest number with 70, of which half are healthcare focused while the rest comprise various other categories. Other states with startups include Illinois with 36, Texas with 29, Georgia with 15, Colorado with 10, Arizona, Minnesota and Ohio with seven each, and Kentucky with five.
InsurTech companies are finding new ways to help insurance companies create innovative products and solutions, develop new account management tools and uncover new streams of revenue.