Highlights from the 2024 cohort include:

• The 50 winners include 23 tech vendors and 27 insurers and intermediaries.
• $5.6B in equity funding raised over time, including $1B in 2024 so far (as of 8/19/24).
• Forty percent of winners are early-stage insurtechs addressing everything from wildfire risk to genAI-powered workflow automation.
• More than a dozen countries represented, spanning Asia, Australia, Europe, and North America.
• 500+ business relationships since 2020, including with industry leaders like Swiss Re and Tokio Marine.

Our research team picked winning companies based on CB Insights datasets, including deal activity, industry partnerships, team strength, investor strength, patent activity, employee headcount, and proprietary Commercial Maturity and Mosaic scores. We also dug into Analyst Briefings submitted directly to us by startups.

Please click to enlarge.

CB Insights customers can interact with the entire Insurtech 50 list here and view a detailed category breakdown using the Expert Collection.

2024 INSURTECH 50 COHORT HIGHLIGHTS

Funding and valuations

The cohort has raised $5.6B across 210+ disclosed equity deals to date (as of 8/19/24). Next Insurance and Coalition lead in disclosed equity funding among the cohort ($1.1B and $770M, respectively).

In 2024 so far, this year’s winners have raised $1B across 38 disclosed equity deals. Just 5 deals account for more than half of this funding total:

• Altana AI — $200M Series C
• ICEYE — $93M Series D
• Vitesse — $93M Series C
• Cover Genius — $80M Series E
• Hyperexponential — $73M Series B

Altana AI reached a $1B valuation following its Series C round in July 2024. This earned it a spot in the unicorn club alongside the other unicorns in this year’s Insurtech 50 cohort: Accelerant, Coalition, and Next Insurance.

Stage breakdown

Forty percent of this year’s Insurtech 50 winners are early-stage companies (i.e., primarily seed or Series A). These companies are the fastest-growing among those analyzed, with a median 12-month headcount growth rate of 45% — 23 points higher than the median for the rest of the cohort.

Comparatively, 46% of winners are mid-stage (i.e., Series B or C), and 14% are late-stage (i.e., primarily Series D+).

Top investors

MS&AD Ventures has invested in 5 of this year’s winners, leading among venture capital (VC) firms, including corporate venture capital firms. The investor has backed 4 insurance providers — Accelerant, Anzen, Next Insurance, and Wagmo — and 1 tech vendor, Artificial Labs. 

Following MS&AD Ventures are Felicis, General Catalyst, Nationwide Ventures, and Portage — each of these investors has backed 4 winners.

When it comes to investment activity in 2024, Portage leads in the number of winners backed. So far this year, it has backed 3 insurance providers: CoverTree, Faye, and Hellas Direct.

Geographic distribution

This year’s Insurtech 50 winners are collectively headquartered across more than a dozen different countries. 

The majority of these companies (30) are based in the United States. Among US metro areas, New York and Silicon Valley lead the pack, as they are both home to 10 of the winners. These metro areas are followed by Boston (4 winners) and Atlanta (2 winners).

The UK follows the US with 8 winners — 6 based in London and 2 near Birmingham.

Headcount growth

Over 7,700 people are employed by the 2024 Insurtech 50 winners, with 4 companies employing about a third of the cohort’s workers: Next Insurance, Coalition, ICEYE, and Cover Genius.

From July 2023 to July 2024, this year’s winners created more than 1,400 jobs. One winner more than tripled its headcount over the period: Sixfold (+267% YoY).

The median 2024 Insurtech 50 winner has raised $0.6M in equity funding per employee. Altana AI and Next Insurance lead among the winners, each having raised $1.6M in equity funding per employee.

Company health

Forty-one of the 50 winners have a CB Insights Mosaic score — a proprietary measure of private company health and growth potential — of at least 700 out of 1,000 (as of 8/26/24). Compared to all private companies — insurtechs or otherwise — with Mosaic scores, these 41 winners rank in the top 3% by Mosaic score.

Next Insurance and Coalition — with Mosaic scores of 898 and 881, respectively — hold the highest scores among this year’s winners.

AI threads the tech vendor landscape

Most of the winning tech vendors offer AI products, which aligns with the broader momentum toward AI (and generative AI) adoption across the insurance industry. Applications often center on prioritization use cases, like risk ranking for underwriters and claims triage for adjusters.

The winners’ business relationships often incorporate the use of AI. Recent examples with industry figures include:

• Reask and AXA Climate — March 2024
• Akur8 and Tokio Marine HCC — April 2024
• Indico Data and Convex — June 2024

Insurtech managing general agents (MGAs) gain ground

MGAs — intermediaries with delegated underwriting authority from one or more insurance carriers as well as related entities like managing general underwriters — represent a sizable portion of the 2024 Insurtech 50 list. Their presence reflects broader industry momentum toward the business model.

Notably, most insurtechs within the commercial category are MGAs that offer property & casualty insurance to businesses. Established insurers have made strategic investments in several of these companies, including:

• American Family Insurance, which led Ledgebrook’s $24M Series A round in April 2024 via its CVC (American Family Ventures)
• Arch Capital Group, which participated in Rainbow’s $12M seed round in January 2024
• Hiscox, which led Coterie Insurance’s Series B round in March 2024

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We provide a deep dive on the state of insurtech in the full report. Here’s the TL;DR:

• Global insurtech funding increases to $1.3B in Q2’24 — the highest level since Q1’23. Insurtech funding grew 44% QoQ — led by 50% growth in funding to P&C insurtechs, from $0.6B to $0.9B. Funding to life & health (L&H) insurtechs also increased QoQ, ticking up from $0.3B to $0.4B.

• Insurtech deal count falls 27% QoQ to 82, the lowest level since 2016. The drop was nearly proportional across P&C and L&H: P&C deals fell 28% to 54 deals, while L&H deals decreased by 26% to 28 deals. On a percentage basis, the decline in insurtech deals outpaced the broader venture and fintech environments (where deal activity fell 7% and 16% QoQ, respectively).

• Median insurtech deal size increases 25% from $4M in 2023 to $5M in 2024 YTD. Only 2021 has seen a higher median deal size over the past 10 years. However, while the median early-stage insurtech deal size is at a record-high $4M this year, late-stage deal size ($31M) is the lowest it’s been since 2018. Insurtech mega-rounds (deals worth $100M+) were nearly nonexistent in Q2, with Sidecar Health, a health insurer, raising the quarter’s only such deal (a $165M Series D).

• Insurtech sees its first IPOs since Q3’22. Two insurtechs IPO’d in Q2’24 — Digit Insurance, an India-based insurance provider, and Saudi Arabia-based Rasan, which primarily focuses on auto insurance sales and vehicle services. Both IPOs occurred amid a broader lull in global IPO activity.

• Europe’s share of insurtech deals reaches 35% — a record high. Deals to Europe-based insurtechs stayed roughly steady, ticking up from 28 in Q1’24 to 29 in Q2’24. Comparatively, the US saw insurtech deal count fall from 61 to 40. Funding to Europe-based insurtechs reached a 7-quarter high ($0.5B), driven by two $93M deals for Finland-based ICEYE — a provider of data from satellite imagery — and UK-based Vitesse, a claims payments processor.

The post State of Insurtech Q2’24 Report appeared first on CB Insights Research.

The technology has been top of mind for major insurers such as Cigna, Sun Life, and Munich Re, with discussion on corporate earnings calls surging over the past year.

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Amid the decline, investors have shifted their focus to writing fewer, larger checks for more mature companies in the digital health ecosystem. Meanwhile, their interest in early-stage companies has cooled.

Based on our deep dive in the full report, here is the TL;DR on the state of digital health:

• Global digital health funding declines by 26% QoQ, with funding falling to $2.9B across 235 deals in Q2’24 — the lowest quarterly deal volume seen since 2014. However, the annual average deal size globally is $16.7M in 2024 YTD, up 40% from the average for full-year 2023, signaling that investors are writing fewer but larger checks.

• US deal share grows to 61%, up from 54% in Q1’24. While digital health funding in the US declined by 18% QoQ in Q2’24, the US’ proportion of the global deal volume grew, marked by an increase in mid- to late-stage deal share. Median deal size is also up in the US in 2024 so far — sitting at $7.5M vs. $4.6M in full-year 2023.

• Mid-stage deal share jumps to 26% in 2024 YTD, while early-stage deal share falls by 14 percentage points. Early-stage deals have consistently accounted for 60%+ of all digital health deals in recent years. However, in 2024 YTD, early-stage deal share has dropped to 51% as mid- and late-stage deals have captured more investor interest. In the US, early-stage deal share has fallen to 45% in 2024 YTD vs. 62% in full-year 2023.

• $100M+ mega-rounds drop off in Q2’24 but are more varied across the digital health landscape. Digital health mega-rounds dropped from 8 in Q1’24 to 5 in Q2’24. While mega-rounds were focused on biotech in Q1’24, they were more spread out in Q2’24, spanning areas like care navigation, ultrasound tech, and value-based care tools. The largest deal of the quarter ($200M Series D) went to Foodsmart — a telenutrition company focused on chronic disease management.

Source: CB Insights — Foodsmart Funding Insights

• Digital health exits increase in Q2’24, rising from 26 to 32 QoQ. AI-driven platforms were the highlight here, with Tempus (precision medicine) and XtalPi (drug R&D) going public via IPO and Nuvo Group (remote pregnancy monitoring) going public via SPAC. Digital health M&A exit activity also picked up in Q2’24, especially in Europe, which saw M&A deals jump from 5 to 10 QoQ. Globally, virtual care, provider workflow tools, and drug R&D platforms were key categories for M&A in Q2’24.

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These leaders are harnessing their existing offerings — in areas like cloud computing, AI, and hardware — to service healthcare providers and pharmaceutical companies.

While big tech players are competing with each other in this landscape, they are also carving out distinct strategies: 

• Amazon is going deeper into primary and specialized care.
• Google is amassing troves of health data, which could play a role in its biotech bets. 
• Microsoft is equipping healthcare organizations with AI tools to improve clinical research, drug R&D, and care delivery.
• Nvidia’s long-standing hardware dominance positions it to play a major role in the future of smart hospitals. 

This report uses CB Insights datasets like investments, acquisitions, business relationships, patents, buyer interviews, company scouting reports, and more. Learn more about our data here.

The post Big Tech in Healthcare: How Amazon, Google, Microsoft, & Nvidia are looking to transform drug R&D, primary care, and more appeared first on CB Insights Research.

To do that, the company is prioritizing growth opportunities that augment its core business, with recent actions laddering up to broad themes like improving decision-making in claims and underwriting.

Notably, M&A activity is absent from Nationwide’s strategy. Instead, it grows its network of relationships through investments — at the corporate level and through its CVC arm, Nationwide Ventures — and partnerships.

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It’s tackling the issue on all fronts, from investing in AI-enabled care models via Google Ventures, to forging partnerships through its Google Cloud division, to launching new products that tailor generative AI to healthcare use cases.

These moves seek not only to address the challenges facing the sector, but also to strategically differentiate Google from big tech peers like Nvidia, Microsoft, and Amazon — all of whom are making concerted efforts to integrate AI into healthcare.

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Digital health funding grew 48% quarter-over-quarter in Q1’24. This growth was supported by an increase in $100M+ mega-rounds, which were largely directed at biotech startups and other players leveraging AI.

Despite the increase, however, total funding still came in below pre-pandemic levels in Q1’24. Meanwhile, deal count continued to trend down.

Based on our deep dive below, here is the TL;DR on the state of digital health:

• ​Global digital health funding increases 48% QoQ to reach $3.7B in Q1’24. However, funding was still down 12% vs. Q1’23 and 63% vs. Q1’22. Meanwhile, digital health deal count declined in Q1’24, dropping to its lowest quarterly level since 2014.
  
  
• Funding to US digital health startups rises 44% QoQ. However, the US also saw deals drop to 144 — the fewest in a quarter since 2013. Despite the decline, the US still saw the majority of global digital health deals (53%) and funding (70%) in Q1’24. The US also secured 6 out of 7 digital health mega-rounds in the quarter.
• Average digital health deal size is up 38% in 2024 so far. After dropping from $23.1M in 2021 to $11.9M in 2023, average deal size is up to $16.4M in 2024 so far. This is being driven in part by the resurgence of mega-round deals. In Q1’24, these deals accounted for their second-highest share of quarterly funding since 2022.
• Digital health sees 7 $100M+ mega-rounds in Q1’24. Digital health mega-round deals rebounded QoQ in Q1’24. The largest digital health deal of the quarter went to Freenome — a biotech company focused on cancer detection. While biotech drove the top deals, Q1’24 mega-rounds were spread across the digital health industry, from biomedical NLP to robotics for microsurgery.
• No new unicorns (private companies valued at $1B+) emerge. While Freenome added $1B to its valuation following its Series F mega-round in February 2024, the company had already attained unicorn status in 2020. Among Q1’24 mega-round earners, Abridge saw the largest increase in disclosed valuation. It reached an $850M valuation — up 350% from October 2023.

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The index calculates innovation by analyzing CB Insights data on acquisitions, dealmaking activity, and patent filings for each player, and it calculates execution based on earnings transcript mentions, partnership & licensing agreements, and product launches.

Below, we look at how prepared the top 50 insurance companies (inclusive of subsidiaries) are to adapt to a rapidly evolving AI landscape across 2 key pillars: innovation and execution.

• Innovation: The innovation score measures an insurance company’s track record of developing or acquiring novel AI capabilities. This score is based on CB Insights data including patents, acquisitions, and dealmaking activity.
• Execution: The execution score measures an insurance company’s ability to bring AI-powered products and services to market, as well as deploy AI internally across corporate functions. This score is based on CB Insights data including business relationships, product launch media mentions, and earnings transcripts.

Want to dive into key data featured in this index? CB Insights customers can check out the links below:

• AI investments
• AI acquisitions
• AI patents
• AI earnings call mentions

Leaders

Cigna leads in AI readiness, primarily due to its relatively high level of AI innovation. For example, the company is actively patenting AI-related tech. It has also funded companies with diverse AI use cases (like digital twin leader Aitia) and acquired AI-enabled solutions (like care navigation platform Bright.MD). When it comes to execution, however, Cigna lags behind some of its peers — this is due in part to lawsuits over alleged AI-guided claims denials.

Travelers and Munich Re round out the top 3. Notable AI initiatives for these companies include Travelers’ $435M acquisition of AI-powered cyber insurance startup Corvus Insurance. Meanwhile, Munich Re actively invests in and partners with AI-enabled companies like Augury.

GenAI-powered products are increasingly coming into focus for leaders in the space. More than 10 of the assessed companies have publicly announced genAI products, many of which are focused on operational improvements, such as claims processing and document summarization.

Innovation

Most assessed companies have demonstrated measurable AI innovation across various focus areas, although innovation scores generally lag behind execution scores.

Only 4 of the top 50 insurance companies — Cigna, Centene, Travelers, and Willis Towers Watson — have made an AI acquisition since 2019 (as of 2/16/24). Additionally, one of these acquisitions has since been divested: Centene sold Apixio to investment firm New Mountain Capital last year. However, 2 of these deals occurred just last quarter amid a boom of executive attention on AI. Travelers acquired Corvus Insurance and Cigna’s Evernorth picked up Bright.MD.

UnitedHealth Group and MassMutual lead in AI startup investments, as each company has inked 25+ deals since 2019. In fact, among assessed insurance companies, MassMutual was the most active AI investor in 2023 with 4 investments, most of which were focused on cancer treatment.

Just 5 companies — State Farm, UnitedHealth Group, Allstate, Cigna, and The Hartford — have accounted for the vast majority of the 900+ US AI patents filed by the evaluated cohort. State Farm alone has filed 300+ patents, including over 50 related to computer vision.

Execution

While AI execution scores vary among assessed companies, no player has emerged as a singular leader in this capacity.

Twenty-eight of the top publicly traded insurance companies have discussed AI strategies on earnings calls at least once since 2019. AI mentions surged in 2023, underpinned by discussion of genAI adoption from companies including Aon, Travelers, and UnitedHealth Group.

Meanwhile, 34 of the 50 insurance companies analyzed have entered into partnership or licensing agreements with AI startups. To highlight a few:

• AXA partnered with Kayrros to launch a wildfire risk management service last year.
• Munich Re partnered with EvolutionIQ in 2022 to support AI-enabled claims guidance for disability insurance carriers.
• Last year, Swiss Re and One Concern forged a strategic partnership focused on business interruption underwriting for natural catastrophe-related risks.

Many of the evaluated companies have also launched AI-enabled products. These efforts have commonly centered on opportunities within claims, operations, and underwriting. For example, Elevance Health is using genAI to analyze health data and provide members with care recommendations, while Liberty Mutual is analyzing loss data with AI. Multiple companies — including AXA and Manulife — are implementing internal genAI tools for employees.

Even so, a few insurance companies have faced lawsuits over their use of AI, which has weighed on their execution scores. For instance, separate lawsuits were filed against Humana and UnitedHealth Group in Q4’23 over their alleged use of AI to deny care for older adults.

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B2C insurtechs use tech to distinguish their offerings from established B2C insurance companies in various ways, from gamifying wellness for policyholders to embedding insurance points of sale on third-party platforms.

Even so, the lines between B2C insurtechs and established insurance companies are increasingly blurred. Many B2C insurtechs partner with incumbents to sell insurance products, while others compete to sell insurance products to the same potential policyholders.

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Based on our deep dive below, here is the TLDR on the state of digital health:

• Global digital health funding halved for the second straight year in 2023, while deals dropped by more than a third. With just $13.2B raised across 1,397 deals in 2023, funding and deals fell to their lowest levels since 2016 and 2014, respectively. Amid the downturn, the US held its leadership position, attracting more than half of all deals.
• Despite the drops, median deal size remained at $4M — the highest on record. While median digital health deal size has trended up for more than a decade, venture deal sizes more broadly have deflated since 2021.
• Mega-rounds have all but disappeared from the digital health realm. There were just 3 $100M+ rounds in Q4’23 — the lowest count since 2016. On an annual basis, mega-round count hit 20 for all of 2023, falling well below even the quarterly average for 2021 (37 deals per quarter).
• The digital health unicorn herd started to shrink in 2023. Unicorn loss is outpacing unicorn births — a trend driven by a mix of startup exits, down rounds, and shutdowns. Despite the emergence of 4 new unicorns in 2023, digital health’s total unicorn count dropped from 97 to 94 over the course of the year. 
• Digital health M&A nearly doubled in Q4’23, indicating that consolidation is picking up in the market. If funding remains sparse and IPOs remain largely out of reach, M&A will become an increasingly attractive option for cash-strapped digital health startups.
• After falling out of the top investor rankings, Andreessen Horowitz returned to tie for the top spot in Q4. The investor backed 5 unique digital health companies in Q4’23, tying Plug and Play Ventures for the title of “most active.” Thanks to its digital health bets in Q4’23, a16z added yet another unicorn to its portfolio.
• Care delivery & navigation tech held on to its funding crown in Q4’23. With $837M raised in Q4’23, care delivery & navigation tech remained the top-funded digital health sector. It was followed by monitoring, imaging, and diagnostics tech with $501M.

Below, we’ll explore these themes across 7 charts.

Spurred by the onset of the Covid-19 pandemic — as well as the broader tech boom — digital health funding skyrocketed to unprecedented highs in 2021. However, as the pandemic has faded from public imagination, digital health startups have watched funding halve with each passing year, dropping by 52% year-over-year (YoY) in 2022 and 48% in 2023.

At $13.2B, digital health funding for 2023 stood at its lowest level since 2016. Quarterly funding levels have yet to give any indication of a recovery. Dollars to the space fell every quarter in 2023, dropping by 44% from Q1’23 to Q4’23. With just $2.3B raised in Q4’23, digital health startups saw their lowest quarterly total in 8 years.

While no major global region was spared from the downturn, Asia was hit the hardest. In 2023, the continent saw greater YoY drops in funding (-55%) and deals (-46%) than both the US and Europe. While US funding didn’t fare much better — nearly halving last year — the country continued to lead digital health funding by a significant margin, securing nearly 70% of global equity dollars to the space. Unsurprisingly, US-based startups also led on a quarterly basis, even grabbing all 10 top digital health deals in Q4’23. 

While funding has been falling at an even pace since 2021, the downturn in dealmaking is only accelerating with the pandemic in the rearview mirror. Deals to digital health startups dropped by 19% YoY in 2022 and 38% in 2023. Over the course of 2023, digital health startups raised just 1,397 deals — the lowest annual count in 9 years. Quarterly deal count in Q4’23 (243 deals) also hit its lowest level since 2014.

Although digital health investors may be more hesitant to strike a deal now than in 2021, they are putting even more skin in the game where they do see value. Median equity deal size remained steady at a record high of $4M in 2023, representing an 8% increase from the heady days of 2021. This stands in stark contrast to venture at large, which saw a 22% decrease in median deal size over the same period. In digital health, the rise in deal size is particularly pronounced among Asia- and Europe-based startups — both groups have watched median deal size climb over the past 2 years.

Digital health investors may be willing to bet more cash on promising startups, but the upper dollar limit for many has dropped. Mega-rounds (deals worth $100M+) have all but disappeared from the digital health landscape. In Q4’23, just 3 of these deals were inked — the lowest count since 2016. Alongside deal count, quarterly mega-round funding also dropped to an 8-year low of $400M.

Digital health mega-round funding has fallen even further than funding to the space at large. It was down by 96% from its Q2’21 peak in Q4’23, while broader digital health funding decreased by 85% over the same period. So while mega-rounds regularly contributed more than half of the market’s funding in 2021, that share dropped to just 17% in Q4’23 — the lowest since 2019.

The post State of Digital Health 2023 Report appeared first on CB Insights Research.

On the drug R&D front, pharma players are using the tech to design new drugs in a fraction of the time. For instance, Insilico Medicine has brought an AI-generated drug for idiopathic pulmonary fibrosis to Phase II human clinical trials — in about half the time it would take without AI. Startups here saw a flurry of exit activity in 2023 as incumbents race to get involved.

Meanwhile, in the hospital setting, genAI is helping summarize complex doctor-patient interactions, make EHR entries more precise, and enhance diagnostic imaging. Cloud giants like Microsoft and Amazon have announced clinical documentation services that allow providers to automatically create medical notes, while EHR leader Epic has partnered with Microsoft to integrate genAI tools into its EHR system. 

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In the US, for instance, the industry-wide profit margin sits just north of 3%, as of Q2’23, according to The National Association of Insurance Commissioners. This figure has been relatively flat since 2021, but it remains well below the levels seen in 2019 (4.5%) and 2020 (5.3%).

To protect the bottom line, health payers are turning to tech vendors that can improve their core operations of covering health risks and paying claims. For instance, some tech providers are leveraging AI to tackle complex issues like health risk scoring and fraud, waste, and abuse detection.

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Using CB Insights data, we dig into key takeaways from our State of Insurtech Q3’23 Report, including:

1. Global insurtech funding rebounds QoQ in Q3’23 but remains below pre-pandemic totals.
2. Asia insurtech funding jumps 181% following a historically low quarter.
3. Despite spiking in Q2’23, M&A exits drop by 28% QoQ in Q3’23.

Let’s dive in.

Insurtech funding bounced back in Q3’23, rising 22% QoQ to hit $1.1B across 119 deals. In terms of quarterly funding growth, insurtech performed better than the broader fintech (-3% QoQ) and venture (11% QoQ) markets in Q3’23.

However, despite the increase, quarterly insurtech funding remained below pre-pandemic totals in Q3’23. This highlights the uncertainty the market has faced in recent years.

As a result, annual insurtech funding is on track to hit $4.5B for all of 2023, which would mark the lowest annual total since 2017.

Following a historically low quarter, funding to insurtechs in Asia grew 181% QoQ to reach $160M in Q3’23. Deals also jumped from 13 in Q2 to 18 in Q3 — the highest quarterly count this year.

The largest deals in the region were raised by India-based agriculture insurtech Leads Connect ($63M), India-based auto insurtech RenewBuy ($40M), and Hong Kong-based life and health insurtech Bowtie ($35M).

Despite spiking in Q2’23, insurtech M&A exit count started to drop yet again in Q3’23, falling by 28% QoQ.

Tech companies drove some of Q3’23’s notable insurtech M&A deals. For example, Acturis acquired digital insurance forms provider Broker Buddha and Zillow acquired title insurance platform Spruce.

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In US hospital systems, patient volumes have dropped year-over-year — inpatient volume by 12% and outpatient volume by 5%, according to FinThrive. Additionally, a Kaufman Hall report revealed that expenses in US hospital systems are 21% higher than they were in 2020. 

Revenue models are also shifting away from fee-for-service billing to value-based care and alternative payments, where provider revenue is linked to patient outcomes or subscription fees rather than the quantity of services delivered.

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From fertility to mental health benefits, employers are increasingly recognizing the power of comprehensive benefits packages in attracting and retaining employees. 75% of employees say they’re more likely to remain with their employer because of an attractive benefits package, according to a Willis Towers Watson study.

Employers are turning to tech vendors to offer more competitive benefits or develop the underlying infrastructure to administer and manage them. For instance, solutions like employee benefits marketplaces simplify the benefits enrollment process, while fitness and nutrition apps bring physical wellness initiatives to the workforce.

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To improve their risk assessment efforts, insurers can tap into advances in digital health, from improved data interoperability to more accessible patient monitoring to new treatment options like digital therapeutics. These innovations can enable insurers to not only strengthen their risk assessment and underwriting models, but also better engage with customers to improve their risk profiles, leading to better health outcomes.

In the market map below, we identify 125 insurtech and digital health vendors addressing predictive risk assessment across 12 different categories.

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Using CB Insights data, we dig into key takeaways from our State of Insurtech Q2’23 Report, including:

1. Global insurtech funding falls below $1B for the first time since 2018
2. Mega-rounds (deals worth $100M+) remain rare, with just 1 deal done in Q2’23
3. Insurtech M&A exits grow 45% QoQ, reversing a recent slowdown

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Among this year’s winners, some are developing new AI tools and infrastructure for insurers to digitize and improve back-office efforts, while others are competing with legacy insurers by building tech-first insurance platforms. A number of winners are digitally linking various stakeholders in the insurance industry, such as by opening new distribution channels or enabling more efficient risk transfer exchanges.

The CB Insights research team picked these 50 vendors from a pool of over 2K companies, including applicants and nominees. They were chosen based on CB Insights datasets — including R&D activity, Mosaic scores, business relationships, Yardstiq transcripts, investor profiles, news sentiment analysis, competitive landscape, and team strength — and criteria such as tech novelty and market potential.

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The payvider model — which combines traditional insurance products with home-grown tech, on-staff providers, and digital health tools — aims to drastically reduce the cost of care that traditional insurers incur. 

In 2021, the market’s outlook looked sunny. Four payviders — Bright HealthCare, Alignment Health, Clover Health, and Oscar Health — all went public that year at multi-billion-dollar valuations. 

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In May, Bolttech closed a $196M mega-round and wefox announced a $55M follow-on investment to its Series B. Meanwhile, insurance executives are increasingly emphasizing distribution as a priority, with earnings transcript mentions of “insurance distribution” doubling since 2021. 

Insurance distribution platforms make it easier for both insurers and non-insurance companies to offer insurance products to customers across multiple channels. Using these platforms, insurers can scale their omnichannel distribution efforts across online/mobile apps, embedded insurance, and agency channels.

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Within the digital health space, YC has backed nearly 300 companies. Altogether, YC-backed digital health companies have raised approximately $5B in pre-exit funding.

Y Combinator’s most recent cohort (its Winter 2023 batch) included over 270 companies, with roughly 7% (20) operating in healthcare. 

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Financial institutions are using the technology for use cases including conversational finance, financial analysis, and synthetic data generation. Now insurers are tailoring the tech to the insurance value chain to drive more personalized customer experiences and internal automation efforts. 

While most initiatives are currently in the early pilot stages, incumbent and startup insurers are betting heavily on generative AI’s transformative potential. Lemonade, for example, has identified 100 business processes that can be automated with generative AI. Similarly, Chubb CEO Evan Greenberg mentioned on the company’s Q1 earnings call that it’s ready to start using these AI tools at scale.

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Using CB Insights data, we highlight some of the key takeaways from our Q1’23 State of Insurtech report, including:

1. Global insurtech funding grows 40% QoQ in Q1’23, deals drop 5%.
2. Insurtech M&A exits drop 58% YoY, marking a continued slowdown from 2022’s record-high activity.
3. Mid-stage deal share up 10 percentage points from 2022, early-stage deal share down 11 percentage points.

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Its 3 core businesses — The Cigna Group, Cigna Healthcare, and Evernorth — cater to both payer and provider markets and provide coverage to 18M medical customers.

Cigna is betting big on technology to provide patients with more precise and personalized care experiences. It is looking at ways to use technology to conveniently deliver care, strengthen its insurance offerings, and do more with patient health data.

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The post Analyzing Cigna’s growth strategy: How the healthcare payer is expanding into virtual care, home health, and insurtech appeared first on CB Insights Research.