Promising to transform insurance, an emerging technological movement takes root.

“The insurance industry right now is in the midst of a sea change transformation that has no proxy nor historical precedent,” asserts Guy Fraker, chief innovation officer for and its offshoot, Innovator’s Edge, which matches insurtech companies with executives and investors.

“No industry has ever been faced with what the insurance industry faces right now,” says Fraker. What distinguishes the insurance sector’s metamorphosis from other industries, he explains, is the simultaneous technological change both internal and external to the industry.

The broad and evolving term for technological initiatives affecting the insurance industry is insurtech, though definitions vary (see below for sidebar “What is Insurtech?”). Poised to forever alter the insurance value chain, insurtech solutions use exponential and connected technologies to provide customer-centric insurance solutions and money-saving process efficiencies for insurers.

Insurtech is not just about applying technology, such as artificial intelligence (AI), application programming interfaces (APIs) and the internet of things (IoT), to improve the insurance value chain. From on-demand insurance for automobiles and personal property to a focus on the customer journey to achieve brand loyalty, insurtech presents new ways to think about insurance in an expanding, digitally connected world.

“There are many areas pushing an acceleration of change where insurance is going to be challenged,” says Pierluigi Fasano, director of enterprise architect reinsurance and IoT group practice leader for Swiss Re, which is investing in insurtech. “Customer engagement, everything toward risk awareness, how you change the buying experience, underwriting and risk products,” he adds, are some areas where insurance is undergoing transformation.

Five years ago, Fraker observes, “there were not that many insurance companies that had their own venture capital arms, and now some insurance companies are considering their venture capital investments as their entire innovation strategy.”


There are several ways to characterize insurtech companies that have emerged from outside the industry. Matteo Carbone, founder and director of the Connected Insurance Observatory, offers a graphic of some insurtech companies along the insurance value chain (see “An Insurtech Startup Sampler”).

The insurtech revolution is here and growing rapidly. According to estimates from Innovator’s Edge provided in October 2017, there are about 5,000 insurtech companies. About 50 percent of insurtech companies are working in the property-casualty space, with the other half evenly divided between life and health insurance.

Interest in insurtech is also accelerating. InsureTech Connect, purportedly the largest insurtech conference in the world, hosted 3,800 attendees in October 2017 and is expected to draw more than 5,500 in 2018.

Converging Influences

Insurtech’s growth is the result of a multiplicity of simultaneously converging influences. Expanding investment, technological tools and digital connectivity are just some of the drivers spurring the insurtech revolution.

To investors, insurtech is a vertical under financial technology or fintech, which introduced bitcoins, roboadvisors and digital banking. Investors see insurance as ripe for technological change, explains Lisa Henderson, chief strategist of products and insurtech consulting at Milliman, Inc. They are hoping to achieve similar returns to those in fintech, which attracted $150 billion in investments and is now a $900 billion market.