Insurtech Insights
To Merge or Not to Merge: InsurTechs Must Increasingly Ask This Question
To Merge or Not to Merge: InsurTechs Must Increasingly Ask This Question
Merger

Follow us:

Linkedin Twitter Facebook

The drumbeat for InsurTechs to pursue a merger, acquisition or partnership is getting louder, with the number likely to substantially grow in the months ahead, an insurance industry expert believes.

“InsurTech is reaching a point where [startups] must decide whether they are better off on their own or need to find a partner,” said Adrian Jones, SCOR’s Deputy CEO of P&C Partners in charge of Ventures & Strategic Partnerships.

Jones, predicts that these arrangements will happen a variety of ways: between two InsurTechs, InsurTechs sold to incumbents [older carriers] or with InsurTechs buying troubled assets themselves. 

“The bottom line—if you’re not discussing M&A, it is a great conversation to start to have,” Jones said.
 
The reason why, according to Jones: startups reach a point in their development where they pursue growth that builds on, and adds to the capabilities they started with.
 
According to Jones, the same rules apply to InsurTech startups as for older insurers.
 
“Ultimately, M&As are driven by companies seeking more growth than the market provides … businesses are ultimately collections of people, and people want to grow,” Jones said. Similarly, he noted, startups are going to also pursue growth by accessing new markets through M&A, and build their capabilities in the process.
 
 
The COVID-19 Factor
 
While InsurTechs—many launched over the last few years— may be organically reaching the point of M&A or a partnership, Jones said that the COVID-19 pandemic is accelerating the process.
 
Acquirers, he said, “are starting to see the value of InsurTech during COVID,” a period where customers rapidly began leaning heavily on all things digital rather than in-person transactions.
 
A number of acquisitions have already closed in recent months, conducted by startups including Buckle, Coalition and Hippo. In those situations, “these are deals where incumbent assets have been sold to startups who are using them aggressively to build out new businesses,” Jones said.
 
He added that this type of M&A is letting InsurTechs accelerate their market presence and exploit the “cost-of-capital” advantages.
 
For incumbents, or older school insurers, Jones said the argument for them to buy an InsurTech startup can be more varied. If nothing else, he said, incumbents can pursue an InsurTech acquisition to outsource tech and other improvements they’d traditionally pursue on their own.
 
“Incumbents have cash and aren’t necessarily spending enough on internal R&D; they need growth and capabilities and [are] realizing these young companies have something real and it is worth paying for,” he said.
 
 
Good Merger Candidates Talk About It Often
 
Companies that are good merger initiators look at the possibility often, Jones said.
 
“This is a boardroom issue,” Jones said. “The best acquirers and I would argue the best sellers of particular assets or companies—they regularly discuss the M&A at the board, either as part of an annual strategic review, or [for startups] even as a regularly quarterly topic.”
 
Startups in particular should screen for merger capabilities and assets among possible incumbent partners, he said.
 
“These are tricky boardroom conversations,” he said, noting that talking about a possible M&A transaction is a big deal regardless of company size. “but they can also be highly productive discussions when they lead to blue sky thinking about the future of our industry.”
 

Source: Carrier Management

LinkedIn
Twitter
Facebook

Can't stop reading? Read more

Aviva Ventures Completes Strategic Investment in Indico Data to Accelerate AI-Driven Insurance Automation

October 28, 2025

Indico Data, a global leader in AI-powered automation for insurance operations, has announced a strategic investment from Aviva Ventures, the corporate venture capital arm of Aviva plc, one of the United Kingdom’s largest insurers. The investment strengthens Indico Data’s growing leadership in the London Market and supports its expanding adoption among global property and casualty carriers.

Read More »

Guidewire to Acquire ProNavigator

October 28, 2025

Guidewire has announced that it has entered into a definitive agreement to acquire ProNavigator, a knowledge management platform designed specifically for the property and casualty (P&C) insurance industry. The acquisition aims to strengthen Guidewire’s capabilities in delivering advanced, context-aware intelligence across its platform.

Read More »

Ryan Specialty to Acquire Stewart Specialty Risk Underwriting

October 28, 2025

Ryan Specialty has announced that it has entered into a definitive agreement to acquire Stewart Specialty Risk Underwriting, a Canadian managing general underwriter specialising in large-account, high-hazard property and casualty solutions. Following the completion of the transaction, Stewart Specialty Risk Underwriting, also known as SSRU, will become part of the Ryan Specialty Underwriting Managers division.

Read More »

Share this article:

APPLY TO SPONSOR

Gain access to the most senior audience of insurance executives, entrepreneurs, and investors. We offer a wide range of opportunities for you to engage with our attendees from networking to thought leadership.

Sponsorship packages provide a wide range of opportunities developed for almost any budget and are designed to help achieve your branding, networking, and/or thought leadership goals. 

Don’t Stop Here

CONTINUE READING