Will Insurtech Ever Recover?

Plus, bankers love their WhatsApp.

Number of the Week: $1.2 billion (explanation below)

Will Insurtech Ever Recover?

The last year or so has witnessed the bursting of many bubbles. The ongoing crypto winter gets the most attention, but perhaps a more precipitous decline has been the once white-hot insurtech sector.

In so many ways, the insurance business was, and is, desperately in need of a technological overhaul. Like banking, it is a centuries-old industry dragged down by antiquated methods and greedy, quasi-monopolistic business models. And so when the parade of newcomers like Root, Lemonade and Hippo emerged a few years ago, the moment felt ripe for innovators to seize the day.

And, truth be told, the insurance industry has changed dramatically in recent years. Filing a claim via mobile phone, which was rare a decade ago, is now routine. Insurtech firms introduced risk and pricing models—such as basing auto insurance coverage on real-time driving performance, as captured on a mobile phone—that the incumbents were unlikely to introduce on their own.

But despite the innovation wins, the insurtech sector, using various yardsticks, is a mess.