InsurTech industry experts predict positive 2024 despite low European deal activity last year

InsurTech industry experts are expecting the space to bounce back in 2024 after a drastic drop in deal activity last year.

InsurTech industry experts are expecting the space to bounce back in 2024 after a drastic drop in deal activity last year.

Research from InsurTech Analyst highlighted that the European InsurTech deals sector suffered a sharp downturn in fortune in 2023, but now industry experts are downplaying the slump.

Benjamin Deplus, Principal in the Venture Team at Breega, one of the fastest growing VC companies in Europe, gave his view on the decline and explained why there is cause for optimism. He said, “In 2023, the InsurTech sector matured significantly. Numerous companies within the industry secured substantial funding to support their growth initiatives at cost. However, despite the influx of financial support, there was a decline in both the number of deals and overall investment due to challenges stemming from inadequately automated technologies.

“For 2024, expect a new wave of InsurTech deals and investment. From cyber-insurance to complex risk and adopting AI, there are a lot of growth opportunities for the sector.”

However, while deals in Europe declined across the InsurTech sector, there is some belief that this may open up more options further afield for investment into the space.

Marat Nevretdinov, CEO at HDI Embedded, has suggested that this may be due to the sector’s incumbents looking to expand beyond Europe. This would see firms poised to pick up greater exposure in areas such as Asia and Latin America (LatAm).

“In 2024, we could see an increase in a number of new partnerships in regions other than Europe, with more significant growth in Asia, LatAm and the USA. Take the adoption of embedded insurance, for example. While each case is different, the growth of embedded insurance in LatAm and Asia is because underinsured populations present market opportunity (it’s relatively easier to introduce insurance solutions to populations without it). What’s more, regulatory environments are evolving, and customers are now becoming increasingly digitally savvy. All of these factors played their role last year influencing not only the number of new partnerships but the investor sentiments as well,” he explained. 

Nevretdinov also urged businesses in the realm to keep a greater eye on the greater picture – as to not be misled by small negative market moves, stating, “However, businesses should keep a wider perspective than just one year and the decline in Europe for 2023. According to industry experts, European InsurTechs have the potential to become a €200 billion market by 2030.”

Quentin Colmant, CEO of Qover, also took the time to comment on the success of the United Kingdom in the European InsurTech deals market, claiming that it is serving as a model for startups across the rest of the continent.

He said, “The UK’s prominence in InsurTech significantly influences Europe’s startup scene. Serving as a model for innovation and resilience, the UK’s leadership sets an example for startups across the continent and contributes to the overall dynamism of the ecosystem.”

Copyright © 2024 InsurTech Analyst

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