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InsurTech 2020: Has the Pandemic Changed the Trajectory?

New SMA Blog by Mark Breading, Partner, Strategy Meets Action

Right before the pandemic hit, I published a blog that reflected on the first decade of the InsurTech movement and made predictions for the decade starting with 2020. Little did I know that the world was about to plunge into chaos and fundamental change due to the global pandemic. My predictions on InsurTech through 2030 were based on my involvement in the movement over the last decade as a mentor, advisor, researcher, and consultant to startups, insurers, and venture capital firms. Of course, predictions are predictions, and those that are a decade out should always be taken with a grain of salt. But now the big question is whether the events of 2020 have permanently altered the trajectory of the InsurTech movement and subsequently thrown all my predictions out the window.

Despite all the turmoil of 2020 and the dramatic changes to society and business, I have decided to stand by my earlier predictions. There have certainly been big implications for InsurTech during the year – our research report from October 2020 contains our observations (The Top 10 Themes for InsurTech 2020: Operating in the Pandemic Era).

So, without further ado, here are the six pre-pandemic InsurTech predictions and my commentary on how 2020 has supported (or altered) those predictions:

1. By 2030, we will see multiple InsurTechs with over a billion dollars per year in revenue.

The InsurTechs that were on a strong growth path at the beginning of 2020 continued to grow throughout the year. Companies like Root, Hippo, Lemonade, and others already have multi-billion-dollar valuations and are on a growth path to be a billion dollars plus in revenue before 2030.

  • Prediction Assessment: On target

2. The term InsurTech will fade by mid-decade, but the impact of the movement will be lasting.

Despite some assessments early on in the pandemic that InsurTechs would fade more rapidly, the movement picked up steam again in the second half of 2020. There is as much or more activity than ever in terms or funding, partnerships, pilots, and even the launching of new startups during the pandemic. The term InsurTech is not even close to fading out of the lexicon.

  • Prediction Assessment: On target, but the term may be around a bit longer

3. The next 3-5 years will see a flurry of M&A activity in the space.

M&A, between InsurTechs and acquisitions of InsurTechs by incumbent players, increased in the second half of 2020. Marquee acquisitions included the Bold Penguin acquisition of RiskGenius and the Brown & Brown acquisition of CoverHound. The market conditions are currently favorable for M&A activity, and this is likely to continue into 2021.

  • Prediction Assessment: On target

4. InsurTech funding over the next five years will be greater than the prior ten years combined.

The final numbers are not in for 2020 yet, but a series of blockbuster deals in the second half of the year, along with the Root and Lemonade IPOs demonstrate a continuing strong appetite by investors for InsurTech startups. With many InsurTechs maturing and growing, it still seems likely that there will be very significant funding over the next five years and even more multi-hundred-million-dollar deals.

  • Prediction Assessment: On target

5. InsurTech distributors will gain significant market share in personal lines, but agents/brokers will still dominate in commercial lines overall.

The lockdowns and work from home environment of 2020 have accelerated e-commerce and the digital transformation of the world. More people are now comfortable with doing business online and have higher expectations about interacting with companies digitally. This will drive more of the personal lines customers to direct digital distribution options. For more complex risks on both the personal and commercial lines sides, there will be an increase in digital enablement, but agents and brokers are still in a strong position to play a major role.

  • Prediction Assessment: On target, may accelerate on the personal lines side

6. InsurTechs will play a major role in reshaping ecosystems for connected vehicles and smart homes, but the revolutionary changes in these areas will occur in the next decade – the 2030s.

The interest in telematics is increasing significantly due to the pandemic’s alteration of driving patterns. Likewise, the increase in individuals staying home for work and school has caused new activity in the smart home space. Thus, 2020 may serve to accelerate the impact of these new ecosystems earlier than the initial prediction, although big impacts may still lie five years out or more.

  • Prediction Assessment: May be too pessimistic – COVID is accelerating smart home and connected vehicle activity

I would be very hesitant to make any detailed predictions about 2021 given the high degree of uncertainty still surrounding the pandemic and economic implications. But over the longer term, the big themes that have been present in InsurTech and these six predictions from just before the pandemic seem to be on course.

Read the original blog from early last year – “InsurTech: A Decade Gone, A Decade Ahead.”

About The Author

Mark Breading, a Partner at Strategy Meets Action, is known for his insights on the future of the insurance industry and innovative uses of technology. Mark consults with insurers and technology companies on forward thinking strategies for success in the digital age. His inventive methods and his ability to incorporate InsurTech and emerging tech into business strategies are unparalleled. Mark also leads SMA’s research program, has overseen the publication of over one hundred research reports, and directed custom research projects for insurer and tech clients. His thought leadership in the areas of InsurTech, emerging technologies, customer experience, and digital strategies has earned him rankings as a “Top Global Influencers in InsurTech” by InsurTech News and Onalytica and a place in the 10 finalists for the “Top Global IoT in Insurance Influencer Award.”

Before joining SMA in 2009, Mark spent 25 years with IBM, where he co-developed IBM’s Account Based Marketing program and led the global project office to implement ABM across all industry verticals worldwide. Mark has held both technical and business roles in sales, consulting, marketing, and business strategy and has advised insurers around the world for almost 30 years.

He is a frequent speaker at industry events; an InsurTech mentor with the Global Insurance Accelerator; and a frequent contributor of articles to Insurance Thought Leadership, Insurance Networking News, LOMA Resource, and many other industry publications.

About SMA

Exclusively serving the insurance industry, Strategy Meets Action (SMA) is an advisory services firm offering retainers, research, consulting, events, and innovation offerings to both insurance companies and solution providers. Learn more about SMA at

SOURCE: Strategy Meets Action (SMA)