Technology and innovation are on the rise; consumers are hungrier than ever to acquire new value adds for their lives from innovations that are gradually disrupting all sectors, starting from energy to smart lifestyle, education on the Metaverse, banking, fintech and now insurtech.
Economical orders are changing and big firms are racing to adapt to the ever-evolving technologies leveraging big data, AI and IoT that are continuously redefining user experiences and cultivating new players in the market. One thing is for sure though, consumer benefits are at the forefront of any successful disruption.
Modern insurance was founded early in the 17th century and traditionally considered one of the most noble industries founded to serve a higher purpose ensuring safety and security for mankind through services and products made to protect us and our loved one. However, data abundance, consumers infinite access to information, and rising skeptics on the logic behind overwriting premiums are putting customers benefits at doubt, thus adding a new layer of challenge for big insurance incumbents worldwide pushing them to place unprecedented efforts to re-establish their credibility, authority and safety promises through venturing and investing in new insurtechs. This is being done with the aim of disrupting the industry and supporting big players to stay competitive through placing customers benefits first and foremost.
With the evolution of AI and advancement in IoT, insurtechs have raised 14.4 billion USD only in 2021, thus surpassing the total raised in 2020 by about 87% and reaching a cumulative ten-year total of $43.8 billion from 2012 to 2021. Through customer-first technologies, the insurance industry is using IoT not only for post-accident coverage but also for the actual prevention of accidents. Promises are being raised from ensuring family’s welfare post disease/death to disease and death prevention. Additionally, more than $9 billion in disclosed capital has been committed to over 700 Insurtech investments over the past five years.
We aim for a safe world and insurtechs are adding this value to the ecosystem, from technologies that utilize AI to customize our car insurance premium based on driving records and mileage used, to insurtechs making use of wearable data for health insurance premiums customization based on our individual activities. Tech giants such as apple have announced that they will leverage their data and AI capabilities to team up with a big insurance provider to offer health insurance premiums in 2024. The health data apple acquires from our wearables grants insurance companies insights into creating customer-first products and repurposing insurance by all means.
Health insurance in specific, especially post Covid, has become one of the fastest growing markets in the world with a market size worth around US$ 2.10 trillion in 2021, it is estimated to hit approximately US$ 3.619 trillion by 2028.
Approximately 1,500 InsurTech startups are currently operating globally out of which 44 % (655) are health insurtechs, proving that the health insurance market is one of the fastest growing projected to grow from USD 2 billion in 2021 to USD 3 billion in 2028 at a CAGR of 5.5% from 2021 to 2028.
Taking a magnified view into the MENA region nevertheless, our region has been taking steady strides in the insurtech scene where the health insurance market is poised to grow at a CAGR of 6% by 2027, Qatar and UAE are taking the lead especially after COVID-19 made several countries regionally put into force a mandatory health insurance regime in which private sector employers must procure health insurance for their employees. The healthtech startup ecosystem in the MENA region is now worth over $1.5B, a 22x increase since 2016. Healthtech startups in the region are taking off, with more than $200M in Venture Capital funding received since 2016.
The growth rate for the MENA region is very promising when compared to the global growth rate, making it one of the most lucrative markets for insurtechs to operate in.
Start-ups are being founded and the need for proper funding the cease this growth has been created. Qatar’s leading insurance company QIC Group has taken a noticeable step in attending to this need by founding QIC-Digital Venture Partners early this year to build insurance ecosystems through connecting innovations, talents, partners, and capital. After hosting the 1st regional hackathon, QIC-Digital Venture Partners are on the go to start up the Insurtech MENA Association aiming to bridge regional Insurance incumbents with promising insurtech starts ups in areas of health, lifestyle, mobility and travel pairing them with tech giants such as Google and knowledge firms such as Deloitte. The association is setting the stage for a prosperous ecosystem, securing the MENA region’s advantage and competitiveness with respect to the globe.
Opinion Disclaimer. The views and opinions expressed by the authors on the QIC Digital Venture Partners page are solely their own current opinions regarding current events and are based on their own perspectives and opinion. Such views, opinions and/or perspectives are intended to convey insights and experiences of the authors and are not intended to malign any individual, religion, ethnic group or company. the views and opinions expressed do not reflect the views or opinions of Qatar Insurance Group or the subsidiaries under the group.
