Eos Venture Partners

Sam Evans

The last two years have been particularly turbulent for the InsurTech sector. Coming off the 2021 highs, the industry has been forced to quickly adjust to the current market.

For many companies, the adjustment has been too much; there have been many failures, distressed mergers and acquisitions, and many InsurTechs have plateaued. However, we believe there is strong cause for optimism for the discerning investor and those seeking commercial opportunities.

This optimism is driven by two dominant technology themes, which we expect to support the development of InsurTech over the next decade. These themes combine with a flight to quality and growing maturity of the underlying business models.

The first macro theme is artificial intelligence, which clearly isn’t new, but we believe it is reaching a tipping point with exponential growth in capability, speed, and data. Global data is doubling every two years, which means by 2035, the amount of data available will have increased by 1,124% compared to 2025. The cost to train AI has fallen by 99.6% in the last five years. This dynamic is why business leaders like Sundar Pichai, Alphabet's CEO, believe AI will have such a transformational impact. Sundar has made the following comment: “Artificial intelligence could have more profound implications for humanity than electricity or fire.”

It's also no coincidence that we are now seeing an explosion in generative AI companies, including in the insurance tech sector. Developing generative AI models and training them with extensive data sets has never been cheaper.

The second macro theme is longevity, a medical innovation-driven health-span revolution. Longevity is core to many areas of insurance and is expected to have far-reaching implications for humankind over the next decade. Biotech advancements and recent breakthroughs in diagnostic testing capability are the core drivers of this transformation.

Biotech advancements include DNA sequencing, which now costs $200 and can be completed in 7 hours, CRISPR sequencing, anti-aging genes, gene therapy, and 3D printing of organs.

In the sphere of diagnostic testing, we are moving from a world where the human body is exceptionally good at hiding disease. 70% of heart attacks occur with no prior symptoms, 70% of fatal cancers aren’t regularly screened, and it takes on average 17 years for a life-saving breakthrough to make it to a typical doctor’s office. This is all changing with the ability to identify the potential for a catastrophic health event in asymptomatic people (driven in part by harnessing the power of AI).

“In the sphere of diagnostic testing, we are moving from a world where the human body is exceptionally good at hiding disease”

These developments are incredibly exciting, but to be successfully harnessed (and commercialized) by the InsurTech sector, we need to see a growing maturity in the underlying business models. Thankfully, the pressures of the last few years have forced a flight to quality. It’s now harder to succeed, but those who are successful are making a bigger impact.

Many earlier InsurTech models were focused almost entirely on growth with little regard for underwriting discipline, sustainable unit economics, or care for the insurer and reinsurer balance sheets. However, we are now seeing businesses underpinned by a laser focus on underwriting profitability, managed by experienced insurance and technology leaders, built around cost-effective B2B2C distribution channels, and with a clear path to profitability.

With increasing clarity around the value proposition and more reasonable valuation expectations, we remain bullish about the future prospects of the InsurTech sector.