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quarterly-insurtech-briefing-q4-2017

The Data Center

The Data Center InsurTech by the Numbers Deal Activity Accelerates to Near Record Level • InsurTech funding volume of $697 million in Q4 2017 • 123% increase from $312 million in Q3 2017; 157% increase year-over-year from $271 million in Q4 2016 –– 53 total transactions in Q4 2017 represents second most transactions completed in any quarter to date; 10% increase from 48 transactions in Q3 2017 and 23% increase year-over-year from 43 transactions in Q4 2016 –– Increasing international activity – U.S. accounted for 62% of transactions since 2012 but only 41% in Q4 2017; five of top 10 largest investment rounds closed in Q4 2017 were in companies outside of the U.S. –– Early stage momentum slowing; Seed/Series A transactions comprised 51% of total transactions in Q4 2017 compared to 64% of all such transactions since 2012 • P&C funding volume increased 175% from Q3 2017 and 187% year-over-year from Q4 2016 –– 45 P&C transactions in Q4 2017 represents 80% increase from 25 P&C transactions in Q3 2017 and 67% increase year-over-year from 27 P&C transactions in Q4 2016 • L&H funding volume increased 56% from Q3 2017 and 107% year-over-year from Q4 2016 –– Eight L&H transactions in Q4 2017 represents 65% decrease from 23 L&H transactions in Q3 2017 and 50% decrease year-over-year from 16 L&H transactions in Q4 2016 • Seven $30+ million investments contributed to the third highest funding volume recorded in any quarter to date; investors making more concentrated and later stage bets in selected maturing companies • Lemonade closed a $120 million Series C round in December 2017 • BIMA closed a $97 million Series E/secondary market investment round in December 2017 • PolicyBazaar closed a $77 million Series E round in October 2017 • Devoted Health closed a $62 million Series A round in October 2017 • Health IQ closed a $35 million Series A-III round in November 2017 • Chechechexian closed a $30 million Series B round in November 2017 • BankBazaar closed a $30 million Series D round in October 2017 Continued Concentration in Distribution Sector • 62% of both Q4 2017 P&C and L&H transactions involved companies focused on insurance distribution, compared to 62% and 43%, respectively, of all such transactions since 2012 • Includes digital lead generation, brokerage and MGA platforms Record Level of Incumbent Investment Activity • 35 private technology investments by (re)insurers in Q4 2017 represents most recorded in any quarter to date; 25% increase from 28 investments in Q3 2017 and 35% increase year-over-year from 26 investments in Q4 2016 • Second quarter since start of 2012 with 30+ private investments in technology companies by (re)insurers or their corporate venture arms (31 investments in Q2 2017) • 120 private technology investments by (re)insurers in 2017 is the highest annual total recorded to date; represents 14% increase from 105 investments in 2016, which was previously the highest year recorded to date • (Re)insurers, directly and through corporate venture arms, are expanding their focus to invest in a broad range of technologies with potential applications to their core (re)insurance businesses • Aegon, New York Life and Transamerica Ventures participated in a $40 million financing round for H20.ai, an artificial intelligence technology development company, in November 2017 • Allianz Ventures participated in a $35 million financing round for 1QBit, a quantum computing software development company, in November 2017 • RGAx participated in a financing round for Bitspark, a blockchain company offering simple money transfer services, in November 2017 (terms undisclosed) Back-End Administration and Processing Applications Emerging as Area of Focus • 64% of investment rounds closed in Q4 2017 were for companies focused on front-end processes (product & distribution), while the remaining 36% of investment rounds closed during the quarter were for companies focused on back-end processes (business process enhancement, data & analytics and claims management) • Selected back-end focused companies that raised capital during the quarter include: • Shift Technology, a SaaS based claims management solution, raised $28 million in October 2017 to bring its total funding to $40 million • CLARA Analytics, an AI-enabled claims management solution, raised $11 million in November 2017 to bring its total funding to $23 million • Snapsheet, a self-service mobile application for claims management, raised $4 million in November 2017 to bring its total funding to $50 million • Cytora, a data analytics solutions provider, raised $6 million in December 2017 to bring its total funding to $9 million • Weather Analytics, a technology-driven provider of global climate intelligence, raised $4 million in December 2017 to bring its total funding to $36 million • QuanTemplate, a developer of insurance reporting software for wholesale reinsurance markets, raised $3 million in December 2017 to bring its total funding to $11 million • Friss, a Netherlands based insurance compliance and fraud detection software provider, raised $18 million in December 2017 to bring its total funding to $19 million 51 willistowerswatson.com

The Data Center InsurTech by the Numbers Quarterly InsurTech Funding Volume – All Stages (US$ in millions) $2,000 Property & Casualty Life & Health $1,852 1,500 1,000 $992 $697 500 0 $422 $369 $783$398 $295 $240 $52 $31 $44 $78 $37 $110 $45 $135 $230 $180 $271 $284 $312 $132 $172 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Deal Count P&C: 5 L&H: 8 2012 2013 2014 2015 2016 2017 2 4 3 5 4 7 7 10 15 8 11 8 8 6 10 4 11 16 11 8 12 13 19 15 13 18 13 18 42 18 15 22 17 16 30 27 22 33 8 16 16 31 25 23 45 8 Quarterly InsurTech Funding Volume – Early Stage (US$ in millions) $300 250 Property & Casualty Life & Health $296 200 150 100 50 0 $177 $152 $156 $119 $120 $103 $98 $100 $87 $73 $78 $84 $58 $64 $56 $41 $33 $26 $28 $12 $11 $14 $9 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Deal Count P&C: 4 L&H: 6 2012 2013 2014 2015 2016 2017 1 4 3 4 2 3 6 7 8 4 5 5 4 2 5 6 4 7 9 16 6 8 8 8 13 8 7 8 10 18 33 9 23 20 8 9 4 11 15 21 17 10 19 15 23 4 Quarterly InsurTech Briefing Q4 2017 52

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