Press Release

InsurTech M&As in Asia surge in 2017, three times that of 2016 – Willis Towers Watson study

April 16, 2018
| Hong Kong, Singapore
  • Total transaction volume more than three times that of 2016
  • Momentum continues in Hong Kong and Singapore driven by FinTech ambitions
  • Asia has also driven global InsurTech transactions to a record high 

Hong Kong, 9 April 2018 – The total transaction volume of InsurTech M&As in Asia hit US$460 million in 2017, more than three times that of 2016, as industry incumbents and new entrants to the market pushed towards greater digitalisation.

The fourth Quarterly InsurTech Briefing, produced by Willis Towers Watson Securities and Willis Re, in collaboration with CB Insights, highlights the key InsurTech trends of 2017.  It shows that InsurTech transactions continued to focus on capabilities related to digital distribution, consumer models and data analytics, while claims management and other back-end processing applications also became top business priorities, as insurers and reinsurers seek to enhance efficiency and engagement throughout the value chain. 

“Investments have picked up especially in the areas of artificial intelligence, automation, process enhancement and customer engagement as companies hope to drive further efficiencies in business operations,” says Vincent Lien, Managing Director, Willis Towers Watson Securities, Asia Pacific. “InsurTech certainly plays a significant role in those areas via the use of data and analytics. They are still to reach prominence across Asia Pacific, so the opportunities are huge.”

The popularity of data and analytics comes from the natural connection between data, peoples’ lifestyles, and their corresponding insurance needs, according to Kevin Angelini, Head of Strategy for the Insurance Consulting and Technology business in Asia Pacific at Willis Towers Watson.

“Thanks to advances in technology, now a growing abundance of data is available enabling insurers to use sophisticated data analytics to reward people who live a healthy lifestyle,” says Mr. Angelini. “This is a growing trend within insurers and the next challenge is to gain alignment from the wider ecosystem such as regulators and reinsurers.”

Turning to specific markets, China and India, home to much of the innovation in InsurTech, accounted for a significant 73% of transactions in 2017. Hong Kong, Singapore and other Asia markets continued to build on the momentum from 2016 and accounted for 27% of the transactions, representing a much more conspicuous contribution than in 2015 when they only amounted to 4% of the regional sum.

“As companies seek InsurTech transactions to tap new technologies, they are looking mostly to Asia, and in particular to Hong Kong and Singapore, amid low growth and even lower interest rates in the U.S. and European economies,” Angelini adds. “Hong Kong and Singapore have well-regulated free markets, mature insurance customers, and access to international capital markets. These make it easier for investors to integrate resources.”

Among the high profile transactions was Yunfeng Financial’s acquisition of MassMutual Asia. In August last year, Jack Ma’s Alibaba-backed Yunfeng said it would buy Hong Kong-based MassMutual Asia for US$1.7 billion, with ambitions to integrate robo-advisory technology and advanced data analytics into the insurance business.

Another example was Singapore Life, which received a capital injection from China Credit during 2017. Singapore Life is the first local independent life insurance company in Singapore to be granted a licence since 1970.   Singapore Life markets life products directly through a state-of-the-art digital underwriting engine licenced from UnderwriteMe. It announced the acquisition of Zurich Life’s Singapore run-off business in January 2018.

Both Hong Kong and Singapore are trying to position themselves as the region’s leading FinTech hub. Last year, this effort saw Hong Kong’s Insurance Authority launch an InsurTech Sandbox to facilitate pilot trials, and start a licencing fast track to provide a dedicated queue for new authorisation applications from online-only insurers in order to accelerate the approval process.

Meanwhile, last February, Monetary Authority of Singapore announced its intention to introduce the ASEAN InsurTech LaunchPad, which aims to bring in high-growth InsurTech start-ups to Singapore and facilitate collaboration between locally-based insurance corporations and start-ups. 

The increase in deal activities in Asia helped drive global InsurTech transactions to a record high in 2017. In the fourth quarter alone, insurers and reinsurers made 35 private technology investments globally, pushing the yearly total to 120, the highest numbers recorded respectively in any quarter or year. In terms of the actual volume, US$697 million of InsurTech funding in the last quarter rounded off 2017, which saw a total of US$2.3 billion, up 36% from 2016, and marked the second highest total for any year to date.

View the Willis Towers Watson InsurTech Briefing Q4 2017 report here.

About Willis Towers Watson

Willis Towers Watson (NASDAQ:WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has over 40,000 employees serving more than 140 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com

About Willis Towers Watson Securities

Willis Towers Watson Securities, with offices in New York, London, Hong Kong and Sydney, provides advice to companies involved in the insurance and reinsurance industry on a broad array of mergers and acquisition transactions as well as capital markets products, including acting as underwriter or agent for primary issuances, operating a secondary insurance-linked securities trading desk and engaging in general capital markets and strategic advisory work. Willis Towers Watson Securities is a trade name used by Willis Securities, Inc., a licensed broker dealer authorized and regulated by FINRA and a member of SIPC (“WSI”), Willis Towers Watson Securities Europe Limited (Registered number 2908053 and ARBN number 604 264 557), an investment business authorized and regulated by the UK Financial Conduct Authority (“WTW Securities Europe”) and Willis Towers Watson Securities (Hong Kong) Limited, a corporation licensed and regulated by the Hong Kong Securities and Futures Commission (“WTW Securities (HK)”).

About Willis Re

One of the world's leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit willisre.com.

About CB Insights

CB Insights is a Pilot Growth and National Science Foundation backed software company that uses data science, machine learning and predictive analytics to help customers predict what’s next. CB Insights has built a tech market intelligence platform that analyzes millions of data points on venture capital, startups, patents, partnerships and news media to predict technology trends.