Insurance

Insurance technology startups are drawing investments.

Everyone from celebrities to large insurance carriers are jumping on the bandwagon when it comes to startups in the field.

According to Insurance Journal, investments in so-called Insurtech companies. The publication reports that a study by Willis Towers Watson found that in the first quarter of 2018, $724 million went into 66 investment deals in insurance-related tech companies. That’s an increase of 155 percent over the same quarter in 2017.

Seven of those investment rounds were worth more than $30 million.

According to the Insurance Journal:

Also noteworthy: insurers and reinsurers preferred minority investments in startups developing technology that could improve things in their own operations such as distribution costs and claims handling, a focus on better processes overall. But traditional venture capital investors tended to focus on insurtechs that addressed customer “pressure points” in terms of selling products, areas such as ease of access, price and underserved markets via innovation, according to the briefing…

“For insurtech startups, the funding scene is more complex, and finding the right investment partner has become more difficult,” Rafal Walkiewicz, CEO, Willis Towers Watson Securities, said in prepared remarks. “Hybrid [funding] models will continue to evolve, and may be the ultimate answer for insurtech entrepreneurs looking to balance industry expertise and the traditional value-creation mentality.”

Even celebrities are piling into the insurance business by investing in tech startups, as evidenced by a round of funding recently raised by Ethos Technologies, which offers a tech-enabled process for buying term insurance.

Ethos raised $11.5 million in a funding round led by Silicon Valley VC firm Sequoia Capital. Other investors included the venture fund of Jay Z’s company Roc Nation, Robert Downey Jr.’s Downey Ventures, Kevin Durant’s Durant Co. and Will Smith’s Smith Family Circle. According to Bloomberg, the funding round wasn’t exactly a no-sweat performance for Ethos CEO Peter Colis.

“We didn’t have enough chairs in the office for everyone,” Colis told the news agency. “So I gave the 60-minute investment pitch while sitting on a hot radiator — while trying to act cool. One of our first uses of their investment capital was purchasing more chairs.”