Israel is one of the largest tech hubs in the world and a major hotspot that favors the adoption and development of disruptive industries. InsurTech is one of the best examples of how Israel’s innovation ecosystem has helped tech-savvy entrepreneurs bring to life groundbreaking concepts that improve people’s lives.
Tel Aviv is already a global leader in insurtechs (startups focused on technology in the insurance sector); companies which are turning insurance on its head by creating new ways of pricing, producing, distributing and servicing insurance policies. As insurtechs proliferate (there are already estimated to be 400 such startups in Tel Aviv alone), so too will collaboration and investment opportunities for incumbents who are looking for strategies to respond to change. By being ahead of the curve in this respect, Tel Aviv’s global influence in the insurance sector is set to grow in 2020 and beyond.
A recent report published by Israeli NGO Start-Up Nation Central reveals that the number of InsurTech companies in Israel has grown by 50% compared to 2015. There are now 480 active InsurTech startups based here and many of them attract investments from major multinationals.
Global insurers are partnering with Israel
The growing influence of Israel’s InsurTech sector is not only felt at a local level, but it’s also beginning to cross borders. Major life insurance companies in the USA are looking at the growth opportunities in Israel and establish strategic partnerships with local InsurTech start-ups. In addition to life insurance companies, some of the world’s biggest financial service firms (including Visa, Mastercard, Citi, Barclays, and JP Morgan) have opened offices in Israel, acquired Israeli FinTech startups or incorporated the services they developed. Another example is Eos Venture Partners, a strategic venture capital fund, which entered the Israeli market to establish partnerships with InsurTech innovators.
There is a growing interest in Israel’s InsurTech and FinTech sectors, which are now 75% funded by foreign venture capital-backed investments, compared to 60% in 2016. Of the foreign companies that invest, 38% are multinationals. The Start-Up Nation Central report also explains that the first half of 2018 gave a record number of investments to Israel start-ups. The 45 deals raised more than $400 million, proving that foreign investors are ready to capitalize on Israel’s InsurTech innovations.
The skyrocketing evolution of the Israeli InsurTech sector is supported by 5 pillars: advanced big data capabilities, small market size, receptivity for early adoption, cybersecurity expertise and a strong blockchain community.
For further information, contact the Economic and Trade Department at the Consulate General of Israel in Mumbai.
Siddhant Gupte; Trade Officer, Mumbai