Insurtech Australia’s Sydney investor event highlights hidden opportunities
On Thursday, 9th November, Insurtech Australia hosted a gathering of insurtechs, early-stage investors and business leaders from the insurance industry and startup ecosystem.
The evening was supported by Investment NSW and hosted by Stone & Chalk at the Tech Central Scaleup Hub in Sydney’s Haymarket.
“Most of the innovation in the insurance industry is driven by insurtech,” said Simone Dossetor, CEO of Insurtech Australia, in her opening remarks.
“But insurtech may not be what you think it is! It’s actually a diverse sector that intersects with proptech, regtech and medtech, amongst other adjacencies,” she added.
A highlight of the night was the panel hosted by Insurtech Australia Director Tetiana George, Co-Founder at Curium, with expert guests Jayden Basha from Investible, Claire Bull from Rainmaking APAC, Derek Feebrey from Trendspek and Francoise Gelbard from HumanableCX.
Here are the key takeaways from the panel’s discussion.
Australia’s large and mature insurance industry is a ripe opportunity for insurtech
Australia’s insurance industry is large and mature with most sub-segments (general, life and health) concentrated on only 4-5 well-known household brands.
Australians buy some $100 billion of insurance products annually, making our relatively small 25 million population disproportionately impactful versus other countries. Additionally, there are unique features of Australian risk exposures that make our geographic market interesting for global insurers and reinsurers seeking diversification.
Jayden Basha articulated the investment thesis for insurtech, citing “legacy systems, margin pressures and distribution challenges.”
The investment case is compelling both domestically and globally where insurtech represents a $7 trillion market opportunity for investors.
“Insurtech investing is growing across APAC,” said Claire Bull, who pointed to research highlighting the huge growth in embedded insurance. “We can’t keep doing it the same way,” she continued, referring to the efficiency benefits from redesigning insurance supply chains.
Francoise Gelbard pointed to the huge opportunity to quantify financial benefits like reducing customer churn, even if just by 1% per annum. “It can be tens of millions in revenue,” she said.
Insurance is highly targetable and sticky, with plenty of scope to grow and upsell
As a positive byproduct of its regulated nature, the Australian insurance industry is easy to map and target with marketing and selling efforts. There are approximately 80 general insurance underwriters, 25 life insurance underwriters, 200 managing general agents (MGAs) and 11,000 brokers.
While standard B2B sales cycles still need to be navigated, “Once you are through the vendor onboarding, there’s a lot of scope to grow and upsell and you’re protected by a high entry barrier,” commented Francoise Gelbard.
“The figures can be so big, they’re scary,” said Jayden Basha, who also noted that initial success in selling to a smaller underwriter can be leveraged up to larger industry participants. “Your go-to-market will need to change as you grow,” he said.
Importance of refining the pitch and finding the right early-stage investors
“It’s a good exercise to do a lot of pitching,” said Derek Feebrey. “We speed dated a lot of investors and we learned a lot!” he said.
Claire Bull concurred, saying, “It’s a two-way process. Both parties have got to be right for each other.”
She also encouraged founders to have confidence, manage expectations and persevere.
Tetiana George commented that it might take 70+ conversations to get a yes from an investor, especially if that investor is not familiar with the insurtech opportunity. “We spent 50 per cent of our time explaining insurance,” she said.
Jayden Basha noted that Investible receives some 400 pitch decks a month, so it’s important for insurtech pitches to be highly polished. He also emphasised the importance of being able to walk investors through the financial model and educate them about the industry. “Don’t assume the investor is a subject matter expert,” he said.