Santalucía Impulsa launches the 4th Insurtech Map of the Spanish ecosystem

Santalucía Impulsa, the Santalucía Group's open innovation and entrepreneurship ecosystem, publishes in collaboration with the digital newspaper The Referent The IV Map of the Insurtech ecosystem in Spain, for the fourth consecutive year. The reality behind the origin of this report lies in the curiosity that existed about the entrepreneurial ecosystem and, in particular, about the startups that were emerging in the insurance sector: insurtechs. What seemed like a “hobby” was consolidated and professionalized, until it became what we now call Insurtech Map. After the first map released in 2020, the fourth one features an entirely new format, extending the reach to Portugal and LATAM.

The new Insurtech Map of the Spanish insurance ecosystem

The new edition reveals a 9.68% growth in insurance-related initiatives and investment compared to the previous publication. In addition, the map places Spain in the Top 10 of the countries with the highest investment in innovation and technology applied to the field of insurance, with a total of 25 million euros invested in the first half of 2023.

According to the data collected, the Spanish entrepreneurial ecosystem has more than 340 initiatives, divided into three blocks: Product (195), Infrastructure (98) and Distribution (54). Of all of them, around 50 are foreigners, but they are also active in Spain. At the same time startups from Portugal, LATAM and the rest of the world are included to visualize trends in other countries.

One of the conclusions drawn from the map is that digital processes are increasingly shaping our daily lives. In this context, the growth of insurtech is directly linked to the greater digitalization of society and, therefore, to the change in its needs.

Investing in the insurtech ecosystem in 2022

In 2022, more than 8,000 million euros in the sector through 470 agreements, the second best number of transactions according to the consultancy firm NTT Data. The State of Global Insurtech 2023 report shows that, at the European level, about 10,278 million dollars (9,165 million euros) have been invested from 2016 to 2022. However, the study also shows that investment in insurtech startups is far below sectors such as eHealth (health) or Fintech (finance). Throughout 2022, the European continent accounted for 50% of the early-stage operations that were closed during that year worldwide (Source: NTT Data) .During that same year, The United Kingdom was the country where insurtech startups closed the most investment rounds (with 67), followed by the other two main economies in the territory: France (29) and Germany (18). In fourth place is Italy (13), just ahead of Spain, where a total of 8 funding rounds were closed. Spain remains in the European top 5 with 52M€, thanks mainly to the €40 million round that the Madrilenian startup Cobee closed.

Among the various categories included in the insurtech ecosystem, the areas of innovation, integrated insurance and mental health have stood out above the rest in terms of the number of successful investment rounds closed during 2022.

Where does the most investment occur?

From Santalucía Impulsa we already see a clear exponential growth of AI, mMachine learning and, in general, of analytical technologies as enhancers of digital use cases, process, efficiency and customer experience, as well as the beginning of projects based on connectivity technologies, such as IoT. Over the past few years, Santalucía Impulsa stands out investment rounds such as Cobee's in 2022, of 40M€, reflecting the growth of innovative solutions in this field. In this regard, Spain is ranked 8th in the global ranking of countries with investments aimed at innovation and technology in the insurance sector, up six points from last year. In addition, it should be noted that the amount invested already exceeds the investment made during the same period in 2022. In words of Ángel Uzquiza, Director of Innovation at Santalucía, “the main technological milestone in these years has been the digital transformation of insurers, which have adopted advanced technologies such as artificial intelligence, data analysis and process automation to provide more efficient and personalized services. This is very important because insurance companies need to expand trade frontiers, going so far as to establish alliances with others Players or industries that manage not only to improve the customer experience, but also to boost their operational efficiency in an increasingly competitive market”.

Main insurtech trends in the 4th Insurtech Map

As a result of a growing and marked digital transformation of insurance companies, the IV Insurtech Map prepared by Santalucía Impulsa together with El Referente reveals the numerous insurtech trends that have been characteristic of the first six months of 2023. Among them, it is worth highlighting:

• The greater focus on personalizing insurance and the customer experience, to adapt the products to the needs of each user.
• The increase in the use of technology in risk prevention, in order to mitigate them to reduce costs and improve efficiency.
• More demand for usage-based insurance, to pay only for what is used.
• Bancassurance and the integration of emerging technologies in risk-life insurance, for greater precision in setting rates and selecting policyholders.
• An increased demand for digital insurance, to improve operational efficiency.
• More use of data and analysis to make better decisions.
• An increase in the use of blockchain technology in the industry, to increase security and transparency in transactions and claims management.
• And finally, a more focused approach to process automation, sustainability and social responsibility, to provide an efficient service while promoting sustainable and ethical practices.

If all these trends have been able to be extracted, it has been thanks to the spectacular panel of experts who have provided their vision and analysis: Raimundo Abando (YEAR), Nieves Malagón (Axa Opensurance), Luis Baena (Munich RE), Emmanuel Djengue (AJPS), Rosa de Oña (Zurich Insurance and CIMA), Néstor Álvaro Gradillas (Saint Lucia), Óscar Paz (Insurtech Community Hub), Richard Calvo (NTT Date), Manuel Portillo (Telefónica), Marta Oller Pérez-Hita (DKV Insurance), Juan Carlos Sáez DeRus (Saint Lucia), Juan Mazzini (Celent — LATAM) and Daniel Madeira (Fixed — Portugal).

The Insurtech Ecosystem in Portugal

In Portugal, the Insurtech vertical has become part of a larger fintech ecosystem, which managed to raise money in 2022 €1,000 billion, with the Insurtech sector generating 16% of that amount. The entire performance of the Portuguese ecosystem has been marked by the creation of new business spaces which offer significant growth multiples, seeking to respond both to the main market trends and to the specific opportunities and challenges of the sector. All this in a context in which various discoveries are being made, disruptive technologies are emerging at an astonishing speed and there is an increasingly intense competition for the service of customers with new consumption patterns, in which they demand everything in an increasingly personalized, accessible, immediate, digital and transparent way.

It is precisely in this challenging scenario in which they have emerged new high-value proposals in the Insurtech perimeter in several key dimensions:

• Distribution and brokerage
• Innovation in products and services
• Risk analysis and management of underwriting, claims and fraud
• New sources of income beyond insurance

The Insurtech sector in Portugal is starting to emerge more vigorously and has a lot to offer in the near future.

Main Insurtech trends in Latin America

In Latin America, startups are mostly looking solve problems specific to insurers or are in the scope of distribution. And this is what has given rise to an environment and type of startups based on collaboration with insurers and other participants in the insurance ecosystem, despite the fact that the few neo-insurers in the market are small. The insurance industry still has important problems to solve; there are many weak points for the customer in insurance processes and there are still some areas of the business that can be improved, mainly through automation, the use of data and artificial intelligence and analytics. Therefore, the opportunity to collaborate by solving specific problems is a reality. Recent research by Celent shows that insurers direct their collaboration with insurtech startups mainly towards claims management and the area of distribution, sales, and marketing.

The main ecosystems and pioneers in insurtech in Latin America are in distribution, followed by companies that offer services to (re) insurers and intermediaries. With all this we see, as Ángel Uzquiza further states, that “in general, the insurance sector is progressing at a very positive pace and above all, by equipping ourselves with technological capabilities that were not available, or by implementing new systems that place us at another level”. He also adds that “the insurance sector is up and running and willing to develop, together with ecosystems such as insurtech, new solutions that provide robust value propositions for insurance, customer services and processes” .If you want to access the full report, click hither.