AI is eating the world. Fine. But what about insurance?
Beyond insurance players initiating PoC or embracing artificial intelligence in their daily operations, AI-first InsurTech are hot too.
Here is a glimpse on that dynamic during the first half of the year.
Overall 12 deals were announced by AI-first InsurTech players across Europe, during the first half of the year. These are players with AI at the core of the value proposition. At least, based on their website and public announcements.
This is 36% of all deals announced in InsurTech Europe over the same period of the time. While 2/3 of money invested in startups globally went to AI players.
Most of these startups are in early days. Hence, they accounted for only 12% (€34m) of all money raised by InsurTech startups across Europe.
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The UK was the hottest ecosystem in that matter, France is second. And many local ecosystems hosted a deal in that category.
Alongside the value chain, claim was the hottest section, which might not come as a surprise as the first wave of AI in insurance was a lot about fraud detection or computer vision in car claim.
There were different go-to-marlet strategies though.
A lot of startups embrace an "Agentic AI" approach, exploring different use-cases and building solutions alongside their insurance customers / partners.
Then comes automation. These AI-first InsurTech have built a single use-case, available of shelf, they sell to the market with a clear value proposition.
Ultimately, more startups are leveraging artificial intelligence in risk assessment. This goes from climate to cyber risks.
While the third category resonates with our thesis on emerging risks as THE next wave of insurance innovation, the two first are a match with the "make or buy dilemma". Agentic AI might get higher traction in early days but raise question - in my perspective - in the medium to long term as the ROI might be tougher to demonstrate compared to specific solutions which have a longer sales cycle but a clear value proposition to demonstrate.
