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Disruption in Bavaria – FinTech and InsurTech boom in Munich
The world of finance and insurance is being turned upside down by young start-ups who are exploiting the opportunities of digitalisation and developing completely new business models with disruptive technologies. However, the big players are still needed and both sides have recognised that working together can benefit everyone. Fintech and Insurtech start-ups are able to bring their ideas to the market thanks to the strong support, while the companies benefit from fresh expertise.
Start-up help for entrepreneurs
This year for the first time, numerous Bavarian businesses have come together under the management of business incubator Werk1 to launch a funding programme created specifically for Insurtech businesses – the W1 Forward InsurTech Accelerator. To this end, ten insurance providers have joined forces with Werk1: Allianz, ARAG, die Bayerische, Generali, HUK Coburg, LV 1871, MunichRe, Nürnberger Versicherungsgruppe, SwissRe and Versicherungskammer Bayern; the Bavarian Ministry for Economic Affairs is the project's patron. The first wave came in June, when the start-ups benefited from non-cash contributions worth EUR 80,000, including training with renowned coaches and workspaces at Werk1's co-working space. The next batch is expected to begin early next year. The following start-ups took part in the first round:
- Leonhard-MacDonald Ventures are developing an SAAS-based business intelligence solution.
- Minnosphere harnesses machine learning and AI to minimise risks for insurance providers.
- MotionsCloud wants to accelerate the claim settlement and administration with mobile cloud solutions.
- Nect is working on an authentication solution for use by multiple insurers.
- Snapsure is working on an insurance bot that automatically finds the appropriate insurance offer.
Synergy effects not only for this sector
The selection of start-ups makes one thing particularly clear: The disruptive technologies the entrepreneurs are working on are not only in the interest of the finance and insurance sector. Instead, the start-ups are to some extent conducting fundamental research on future technologies, from which many other user sectors can also benefit: big data, blockchain, machine learning or artificial intelligence to name just a few. The young companies have found fertile ground in Munich, as the city is home to companies from all industries who have a steady demand for new, digital solutions. This is further demonstrated by the increasing number of research institutions of international corporations coming to Munich to look for targeted contact to insurance providers. The insurance and finance business, start-ups, industrial enterprises – everyone involved benefits from the synergy effects brought about.
It is no accident that the Insurtech scene is currently booming in Munich. After all, the city is one of the world's leading locations for the (counter)insurance industry, as the companies listed above prove. Since the 1990s, the sector has recorded growth of nearly 60 percent. Erik Podzuweit of Scalable Capital also knows that Munich is the ideal location for finance and insurance entrepreneurs – the fintech start-up was recently awarded the FinTech Germany Award in the Early Stage category. In the third episode of our #bytevaria talk series, the co-founder and co-CEO talked to us about why Munich is the perfect location for entrepreneurs and what potential he sees in the fintech and Insurtech scene. Learn more about the topic in the interview or in our infographic.