A majority of start-ups are looking to team up with larger firms while looking to enable and not disrupt with the cost of going alone being so high.

It is mutually beneficial, as it often allows the start-ups to offer insurance policies or insurance-based products, while giving the insurer the opportunity to test new lines or ideas without any risk in the development process.

This has marked the emerging InsurTech market out to be a very different proposition to the FinTech maket, which has directly challenged the leading banks.

A new report from Timetric’s Insurance Intelligence Center (IIC) investigates these key trends, among others, in the InsurTech Start-up Landscape report. The report gives a detailed overview of the market, while providing exclusive first-hand research from industry insiders.

Non-life leads the way, all sectors to be influenced by start-ups and innovation

The non-life lines – mainly health and motor- have offered the softest entry point for start-ups, with the use of data and technology already established in the form of telematics in motor and wearables in health. 

The life market is certainly much harder to break into and is generally less welcoming to innovation, but emerging trends, such as peer-to-peer lending and technologies, like blockchain, will undoubtedly modernize and diversify the sector.

Ever-increasing access to, and use of, data creates opportunity and risk for start-ups

Data is very much the driving force behind the InsurTech boom – tailoring policies for individuals, reducing claims and better assessing risk are all key benefits – however the cost and risk of storing and securing personal data is another challenge facing start-ups.

Start-ups are almost always small, stretched teams, on similarly small and stretched budgets, so the need to protect against a cyber-attack which would likely do irreparable damage to their brand is another use of time and expertise.

Investment in start-ups increasing rapidly

Investment in insurance start-ups has jumped from $800m in 2014 to $2.6bn in 2015 as innovation in insurance has finally taken off. While it remains a long way behind FinTech by any measure, the interest is now very clear to see – with substantial deals with global start-ups such as Oscar, Lemonade and Zhong An receiving substantial amounts of funding over the past two years.