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European insurers such as Axa, Aviva and Allianz, along with MassMutual and American Family in the US and Ping An in Asia have all set up specialist venture capital funds dedicated to investing in start-ups that may be relevant for their core businesses.
Analysts said insurance has lagged behind other parts of financial services when it comes to digital investment, but say that interest has picked up sharply in recent months in a bid to stay competitive and harness big data analytics.
“The priority is financial return,” says Eric Emmons, managing director at MassMutual Ventures. “We’re running a for profit venture capital firm. Once companies are in the portfolio, we’ll do what we can to make our colleagues at MassMutual aware of them.”
Other insurers, such as MetLife and Generali, have taken a different route and invest in conjunction with existing venture capital firms. However last year Generali went further and bought full control of MyDrive, a UK-based telematics business.
Insurers have taken a wide definition of what might be relevant investments to make. According to CB Insights, between 2010 and 2015 just 13 per cent of investments were in insurance technology companies. As well as the parking app, Aviva Ventures has invested in Cocoon, a home security business while Axa has backed a start-up that forecasts the price of airline tickets.
“We are looking at technology that will be relevant in three to five years,” says Ben Luckett, managing director of Aviva Ventures, “especially around the internet of things”.
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