Insurance Technology Market Update Q3 2020

By Houlihan Lokey

Highlights from the insurance technology market update report for Q3 2020 include:

Insurtech continues to see explosive activity, with ~$6 billion in financing volume and ~$12 billion in M&A volume year-to-date.

89 financings in Q3 were ~44% higher than the year-ago period, and ~3.8 billion in Q3 volume was ~230% higher than the year-ago period. Lots of Q3 financing activity across digital distribution, software, and data and analytics.

29 M&A transactions in Q3 were ~32% higher than the year-ago period, and ~$9.5 billion in Q3 volume was ~27% higher than the year-ago period. 2020 M&A volume has been bolstered by a number of large deals. Some have argued that the pandemic is actually driving increased M&A activity in the category, as large incumbents push to digitize and small insurtechs look for exits.

Q3 saw continued insurtech IPO launches and filings, which are expected to garner further interest in the category and boost private-market capital-raising activity.

Insurance software and data and analytics companies lead the public company pack, trading at 23.0x and 18.9x EV/2020E EBITDA, respectively.

Read the full report here.

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