As every year, Santalucía Impulsa, the ecosystem of entrepreneurship and Open Innovation of Grupo Santalucía, launch the third Insurtech Map of the Spanish insurance sector, prepared together with the diary The Referent.
The III Insurtech Map presents more than 320 ecosystem agents or initiatives in areas associated with different products, digitalization and new distribution channels. And although Spain occupies the 14th place in relation to investment in the world of insurtech, between 2021 and 2022, more than 15 investment rounds have been closed, exceeding 30 million euros.
The new edition includes initiatives that have recently been accelerated by Santalucía Impulsa, specifically the finalist startups of The 5th Edition of Santalucía Impulsa Startups, held this year: Iteralix and Vitalbook in Decesos 2.0 and Viewtravel and Vyootrip in Traveltech. But it also includes some of the most recognized, such as Bigle Legal, Ever Health, Bdeo and Livetopic.
On this occasion, it should be noted that, considering the importance of digital transformation for insurers, a multitude of new brokers, brokers or subscription agencies with attractive value propositions focused on the current customer. In addition, they have continued Senior/Silver Economy startups growing exponentially. Let's look at it in detail.
Third consecutive year of the Insurtech Map of the insurance sector
El map of the Insurtech ecosystem in Spain continues to grow in initiatives and investment. It is undergoing an intense process of digital transformation that is changing the way companies operate and their relationship with customers, who are looking for close, immediate and flexible solutions.
More than 320 initiatives, and just over 100 new, including the most important initiatives in the rest of the world with special attention in LATAM and Portugal, star in this III Insurtech Map.
After surpassing the 247 initiatives of the last edition, the Map reveals that, both in projects and in investment, The challenge of digital transformation is a priority in many of these initiatives.
Current overview of the Insurtech sector
To start by making an introduction, according to the Global Outlook 2022 report, the Insurtech sector has reached a stage of maturation which has slowed innovation and the rise of new startups. Maturity that comes from the incorporation of senior profiles with long experience in the insurance sector in projects and initiatives with different roles.
For João Cardoso, founder and CEO of Lovys, the factors that explain this growth, which have led to the establishment of the Insurtech ecosystem, are three:
- Place the Customer in the center and analyze their needs, lifestyle, consumption patterns, price sensitivity, etc.
- La product specialization and the improvement in prices due to increased competition.
- La technological nature, which makes it possible to automate processes, generate added value and maintain a constant evolution of the business.
In the words of Ángel Uzquiza, Corporate Director of Innovation at Grupo Santalucía, this slowdown is not a halt in innovation in the sector, but rather the transition to a second stage: “2023 will bring us a greater number of Insurtech and investments, especially since insurers' digital transformation plans are already underway and focus is beginning to be placed on more disruptive proposals”.
“The insurance sector is undergoing a great process of digital transformation that has completely changed the way insurers operate and their relationship with customers”. Therefore, Insurtechs are true accelerators of the digital transformation of insurance companies.
Invested capital and the global evolution of the Insurtech sector
solo In 2021 global investment reached a total of $10.1 billion, as stated in the Insurtech Global Outlook 2022, a figure that marks a new milestone in terms of invested capital.
And in 2022 the trend continues to rise. According to the Global Insurtech Report 2022, by Gallagher and CB Insights, they invested in January $751M worldwide in Insurtech. This dynamic was maintained throughout the first quarter of the year thanks to growth in the number of investments in startups that are in the initial and middle stages.
According to The State of European Insurtech 2022, Europe recorded its second best quarter in the first third of 2022 and it is closing the gap with the United States, which experienced the strongest setback.
Insurtech Industry Trends in 2023
Santalucía Seguros, through its Innovation Observatory, has prepared the study “2023 Trends in the Insurance Sector”, where he points out eight inclinations that foresee the evolution of the insurance sector.
1. Automating the claims process
This is a solution that speeds up and avoids delays in making claims, reducing manual work by up to 80%, processing time by 50% and costs by 30%.
2. Chatbots 2.0
With technological advances such as artificial intelligence, machine learning, natural language processing (NLP), optical character recognition or advanced data analysis, chatbots 2.0 can become tools capable of giving conversations to users, understanding them and giving them personalized answers and adapted to your specific needs.
3. Climate Risk Modeling
Disasters related to climate change will be increasingly frequent, so insurance must adapt and provide solutions that allow customers to recover maximum stability in the shortest possible time after a weather event.
4. Cryptoinsurance
Las Cryptocurrencies suffer numerous cyberattacks and thefts; and, given this, a great opportunity opens up for insurance companies when it comes to protect digital assets.
5. Low-code/no-code
Low-code/no-code tools are a full-fledged market. They consist of the creation of applications and MVPs with a rapid, low-cost, modular and plug-and-play development approach, allowing users with little experience to develop applications themselves.
6. Metaverse
The metaverse concept is still in its infancy, but Gartner estimates that at least 25% of people will spend at least one hour a day in the metaverse by 2026.
The first initiatives registered in the insurance sector are the purchase of land or the opening of virtual branches, but it will generate a multitude of possibilities: cyberinsurance for cryptocurrencies and NFTs, cryptocustody services, distribution of products and services on Web3...
7. Integrated/embedded insurance
Integrated or embedded insurance consists of the integration of insurance products and services into third-party applications or products from any other sector through APIs.
This is the preferred option for younger generations, and it is estimated that, by the end of 2022, their Value exceeds 60 billion dollars. By 2023, the integration of these insurances is expected to cover new ecosystems such as mobility, home, travel, events, electronic devices or cybersecurity, among others.
8. Mental Health
Covid-19 has caused more and more people to consider acquiring a health insurance that offers them services related to mental health. In response, many insurance companies are developing specific mental health services that are scalable, fast and easily accessible through digital media.
The Spanish Insurtech sector on the global map
If we make a weighting of Spain on the international table, we observe that it occupies the 14th place in relation to investment in the insurance world, with a total of close to 13.8M$, a far cry from neighboring countries such as France (716M$), the United Kingdom (589M$), Germany (549M$) or Italy (94.2M$).
In the first ten months of 2022 they have been closed seven operations in the Spanish Insurtech ecosystem. This year, the rounds closed by Life5 (6M€) and Tuio (3 M€), which account for more than 60% of the total capital invested in the sector.
In short,”The digitalization of the sector empowers insurers to have a different impact on other industries,” says Ángel Uzquiza. “The scenarios are going to change and the opportunities are going to multiply. We will see how technological developments will impact the insurance sector, increasing the capacity of insurers to reach other markets. Some examples will be apification - understood as the ability to connect systems and architecture with third parties - and the production of embedded insurance - those insurance products and services that are introduced into the contracting funnel of adjacent industries and that provide value to the commercialization of third-party products”.
