AI seen boosting insurtech investment sector

Las Vegas – Artificial Intelligence will help to reinvigorate an insurtech investment sector that is off its valuation highs of 2021, according to a panel of experts who spoke Wednesday at the annual InsurtechConnect conference.

“AI is insurtech’s new producer, and things are changing,” said David Katz, Toronto-based partner at Radical Ventures Investments Inc., a venture capital fund with teams in Toronto; Palo Alto, California; New York; and London. He likened the investment sentiment to a rock band that has found new success with a fresh producer.

Mr. Katz added that technology uptake is on the rise among brokers, insurers and others. “On the risk side, they’re adopting these solutions faster than they have in the past. … The adoption has been pretty, pretty strong and pretty quick,” he said.

Amir Kabir, an adviser for AV8 Ventures, where he previously served as a general partner, acknowledged the challenges faced by the insurtech investment sector but emphasized the staying power of the insurance sector.

“The environment is tough right now (for Insurtech investment), but what’s not going to change, from my perspective, is that financial services and insurance are a core part of the economy.”

Luis Viñas, Barcelona, Spain-based partner with venture capital firm Alma Mundi Ventures, said that in some cases a focus on scale rather than profitability ultimately dented returns on investments in the insurtech sector and had a role in souring sentiment.

Ruth Foxe Blader, founder and managing partner at Foxe Capital, an early-stage venture capital fund, was upbeat, however, noting that early stage funding continues to be robust.

“The market is amazing,” Ms. Foxe Blader said, noting that seed rounds are averaging almost $14.9 million, which is higher than it’s ever been. “So, seed funding is not suffering at all.”