KPMG’s latest Pulse of Fintech report finds insurtech investment in the U.S. rising, bucking wider fintech trends.
According to the report, fintech investment in the U.S. hit a record $59.8 billion last year, which includes investments in mergers and acquisition, venture capital and private equity. Global fintech investment in 2019 decreased from the 2018 results, with $137.5 billion invested across 2,693 deals.
U.S. insurtech was led by the $3.5 billion acquisition of Assurance IQ by Prudential Financial in October 2019, and Bright Health’s Series D financing of $635 million. Investors focused on later-stage companies, a reflection of the larger trend of VC investors preferring safer bets and proven companies.
The current increase was reported due to the expansion of fintech beyond the traditional payments and lending spaces helped fuel investor interest in the U.S, like growing interest in B2B-focused companies, fintech-specific cybersecurity-related solutions and insurtechs.
“Large carriers completed multiple proof of concepts and have seen the capabilities that exist in insurtech and realize that these solutions will have a large impact on their future,” shared Gary Plotkin, global insurtech leader for KPMG. “They are starting to partner with them, acquire them, do joint ventures with them, and incorporate them into their businesses.”
Robert Ruark, KPMG’s Financial Services strategy and fintech leader in the U.S. added, “B2B focused fintechs are particularly attractive to investors given the large number of financial institutions looking for ways to improve their digital offerings and enhance customer experience to their small business and corporate clients.”