Anyone who looks at InsurTech investment data can identify the low level of investments from the traditional insurance companies in InsurTech start-ups.
An interesting angle related to this matter is the reference of the startups to the reinsurance companies and the benefit that the reinsurance companies derive from the nature of their activity.
An interesting issue is that, logically, insurance companies are supposed to be much more involved in investing in startups because they have a lot of capital to invest in and even more of that the insurance companies need new and interesting technologies.. And therefore the small number of startups in which an insurance company shareholder is required to explain.
The reason for this is that the startups do not want an insurance company to be a shareholder in their startup because this will cause them to be associated and identified with the same insurer, which will impair their ability to work with other insurance companies and severely limit the type of investors in future rounds. Therefore, the entrepreneurs do not usually allow an insurance company to be a shareholder in their company.
Here reinsurance companies enter the matter and have a built-in advantage for start-ups. On the one hand, they have the entire world of insurance like, underwrite, insurance products , claims and on the other hand, the reinsurance companies are not identified with any single insurance company, and therefore the entrepreneurs have no future restriction on the activities of the startup and the identity of the shareholders.
Moreover, the reinsurance company is also an excellent distribution channel for the technology of the same startup so that the introduction of a reinsurer as a shareholder is a very big advantage, and the reinsurers benefit from it