Investment in the global insurtech market grew by 84% in 2018, topping the $3bn mark.
The funding increase has also led to a greater number of digital policies for consumers as more insurtech startups emerge, according to research from analytcis firm GlobalData.
The study, Digital Challengers in Insurance, highlights the number of new ventures offering 'on-demand' policies where consumers can buy coverage by the hour, day or week via an app for certain personal lines such as motor, gadget and home insurance.
While insurtech funding still lags other industries such as transport and entertainment, the success of startups offering more flexible services is foricng traditional providers to respond with their own innovations, said Ben Carey-Evans, insurance analyst at Global Data.
For example, UK insurer Aviva has launched Aviva Plus, which allows insureds to pay monthly subscriptions while adjusting levels of coverage. Meanwhile UK bank Lloyds has recently partnered with US-based insurtech Trov, using the latter's white-labelled platform to develop a series of digital insurance products for customers.
“Established UK players have to adapt to progress made by start-ups or consumers will begin to go elsewhere," said Carey-Evans. "They can no longer rely on their trusted brand names, as they are not just competing against start-ups but can be left behind by their competitors partnering or investing in them.”