InsurTech weekly: Insuring the future of car ownership

Your weekly selection of the three most engaging InsurTech articles shared this week.

1️⃣ Public benchmarks on InsurTech valuations

Insurance is dominated by heavily-regulated behemoths, who are definitionally risk-averse and well-capitalized. While premium growth is important, so too are capital efficiency, predictability and combined ratios. As the growth-at-all-costs sentiment evaporated in 2022, investors capitulated: hot insurtech equities got crushed, and private insurtech funding fell by >50% year/year.

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2️⃣ The future of car financing

Europe’s car market has upshifted from financing to leasing. This move should both endure and accelerate further, powered by the growing market share of electric vehicles (EVs). McKinsey also expect a shift in customer behavior regarding mobility patterns and auto financing, having asked more than 4,000 customers across Europe (France, Germany, and the United Kingdom) to reveal what they expect from the future of auto finance. McKinsey conducted this research as part of its regular McKinsey Mobility Consumer Pulse Survey, to reveal what customers expect from the future of auto finance.

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3️⃣ The state of the FinTech industry as of Q1 2023

While still feeling the prolonged impact from high inflation and rising interest rates, turbulence in the banking industry added another wrinkle to the FinTech deal activity environment in Q1 2023. Despite the turmoil and ongoing challenges in the market, Q1 2023 private FinTech company financing volume rose 53% sequentially to $17.7 billion, up from $11.6 billion in Q4 2022, and broke a string of three consecutive quarters of declines. To be fair, Stripe’s $6.5 billion Series I round – the second largest FinTech funding round ever – accounted for more than one third of the total financing volume in the quarter.

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