CB Insights Reports Huge Increase in Insurance Industry Investment in Start-Ups

USAA appears four times in a “top ten” list of financing rounds with participating insurance investors, which represents a tiny amount of the $1.78 billion insurers have invested since 2010.

(Image source: CB Insights.)

When technology evolution is moving faster than insurance carriers can run, the best course is often to simply invest in or acquire a company that has developed the technology they need. Recent examples include MassMutual’s investment in Haven Life and Patriot National’s acquisition of Vikaran Solutions. Accenture’s 2014 Digital Innovation Survey found that 43 percent of respondents were planning or have completed the acquisition of start-up, and now CB Insights reports a 460 percent increase in insurers’ technology start-up deal activity during 2014. Insurers’ total investment in technology companies since 2010 totals $1.78 billion, according to the researcher.

(Related: New Online Agency Haven Life Offers Instant Term Life Purchase)

Insurers are investing in wide variety of technologies ranging from pricing information and location-based technologies, to payments and transportation-as-a-service offerings. CB Insights’s blog notes investments in start-up firms such as Uber, Coverhound, Coinbase and TrueCar.

Among the top ten investment rounds with participating insurance investors listed by CB Insights are Ping An’s (Shenszen, China) $485 million investment in Chinese online lending platform Lufax, China Life’s (Beijing) $200 million investment in Uber. USAA (San Antonio) owns four places on the list for the company’s investments in: TruCar’s automotive pricing and information website; the Prosper Marketplace peer-to-peer lending platform; Coinbase’s Bitcoin wallet and platform; and Personal Capital’s wealth management robo-advisor. Other American firms in the top ten are MassMutual (Springfield, Mass) for its investment in IEX Group, an equity trading venue; Northwestern Mutual (Milwaukee, Wisc.) for the Betterment wealth management robo-advisor; and American Family (Madison, Wisc.) for the Life360 location and communication app designed for use by families.

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at AnthODonnell@IIReporter.com or (503) 936-2803.

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