Could COVID-19 produce a boom for InsurTech?

If there is one thing that we have all learned with the COVID-19 pandemic, it is that there is virtually no industry not being impacted in some way. This includes InsurTech. Let’s take a look at a few dimensions of InsurTech and COVID-19’s impact on them:

  • Full-stack insurers – companies like Root, Lemonade and Next should be well-positioned to thrive when the virus subsides. As digital-native companies, they can capitalize as the world accelerates transformation to online, digital and mobile engagement.
  • Digital distribution players – digital agents, comparison platforms and others in the distribution space stand to succeed as more people gain experience with moving their personal lives online. Of course, individuals and businesses can still call their agents or brokers or use their web capabilities, but, generally speaking, InsurTech digital distribution players have more advanced capabilities.
  • Tech companies – InsurTechs that offer digital capabilities to interact with agents, prospects, customers and claimants will likely be okay, especially if the economy starts recovering within 10-12 weeks. Self-service, DIY, mobile and virtual capabilities will all be elevated in importance.

One factor affecting all of this is that the funding picture is fuzzy. Up through the end of 2019, there was great momentum for InsurTech around the world, and funding levels were continuing to increase. Now, capital is already starting to tighten up. And the longer the COVID-19 crisis continues, the more reluctant investors will be to fund new ventures. Once business starts to return to normal however, InsurTech will be very well-positioned for success as insurers look to accelerate their digital transformation and inject even more innovation into their business.