FinTech and InsurTech Hub in Bavaria: Scalable capital success story The FinTech start-up is one of the major success stories in the FinTech hub in Munich. Co-founder Erik Podzuweit explains how it came about and what makes the location so special in the third episode of our #bytevaria talks. Watch the video
FinTech and InsurTech Hub in Bavaria: Scalable capital success story The FinTech start-up is one of the major success stories in the FinTech hub in Munich. Co-founder Erik Podzuweit explains how it came about and what makes the location so special in the third episode of our #bytevaria talks.

#bytevaria – FinTech and InsurTech in Bavaria

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Bavaria, a strong finance and insurance centre

The FinTech and InsurTech scene in Bavaria is booming. The insurance corporations and banks have recognised that their business is undergoing radical change due to digitalisation. At the same time, the location offers start-ups huge customer potential. With roughly 100 insurance companies, Bavaria is an international leader. The 390 credit institutions in the state also prove that the location is extremely attractive for finance companies. Taken together, the industry employees 179,000 staff. The banking and insurance sector has grown by just under 60 percent in Bavaria since the 1990s. With Munich, Nuremberg and Coburg, the region is one of the largest international insurance locations, not least because of globally active insurance groups such as Allianz and MunichRe. This leading role has already shown its pull in attracting major international companies and prompted Generali and Swiss Re to establish offices in Munich. Of the 63,000 employees in the insurance industry in Bavaria, 33,000 are in Munich alone. The state capital therefore leads the list in Germany. Bavaria plays a similarly central role in German banking. In terms of the number of institutions, Bavaria is the largest banking centre in the Federal Republic, a quarter of all German credit institutions are based here – even more than in Switzerland. These include two of the largest banks in Germany, HypoVereinsbank Unicredit Bank AG and BayernLB. In recent years, new big names in the InsurTech and FinTech industry have also joined the ranks – for example Check24 or Interhyp.
 

Radically changing times: opportunities for start-ups
 

Start-ups in particular bring new approaches for promising business models into play with their innovative thinking. Bavarian success stories from the FinTech and InsurTech sector such as Ottonova, Scalable Capital or e-bot7 are attracting worldwide attention, so the spectrum of companies in the sector is also expanding with international market leaders such as Bikmo, Keylane and Blinkin. The geographical proximity to the many established providers in the digital sector is convincing as a global hotspot.

For this reason, Munich was recently awarded by the Federal Ministry of Economic Affairs and Energy as an InsurTech hub as part of its Digital Hub initiative. The hub is managed by Bavarian insurance companies in close cooperation with Werk1.Bayern GmbH. Founders can familiarise established companies with their creative solutions through direct exchange and benefit from their partners’ industry expertise. 

The InsurTechHub Munich (ITHM) offers a unique infrastructure for mutual success – with over 65 alumni start-ups, 20 representatives from the insurance sector as well as other cross-industry partners and many more experts. Plug & Play, one of the world’s largest Silicon Valley accelerator programmes, chose the Bavarian capital as the centre for its European InsurTech programme. Start-ups from all over the world were brought to Bavaria through the two accelerator programmes Plug & Play and InsurTech Hub Munich Innovation Programme. The hub also reaches the rest of Bavaria due to the integration of the insurance locations Nuremberg and Coburg. A cooperation project between ITHM and Medical Valley in Nuremberg / Erlangen in the field of e-health has also recently been added to this. The H+ programme is also aimed at international e-health start-ups that want to launch their product on the German market. 

With the largest InsurTech conference in Europe, the DIA Munich – Digital Insurance Agenda, Bavaria offers annual networking opportunities that attract the most innovative InsurTech players from around the world. The Munich Financial Center Initiative, a consortium of 50 companies, associations and scientific and state institutions from the finance industry, champions the industry’s interests. The strong representation of business angels and venture capitalists provides FinTech and InsurTech start-ups with excellent development opportunities. 25 new companies were founded in the field of FinTech and InsurTech on the Bavarian capital’s broad-based start-up scene in 2018 and 2019. Investment amounts of 1.289 billion euros flowed into German FinTechs in the first 9 months of 2019 alone. This corresponds to 36 percent of the entire German venture capital market. The FinTech start-ups in Bavaria are also bringing about radical change in the traditional finance sector with their innovative business models, especially in the B2B sector. The location takes second place for new FinTech start-ups, even ahead of Frankfurt.
 

Talent & research 
 

Well trained specialists are essential for the growth of the Bavarian FinTech and InsurTech scene. A variety of training programmes provide highly qualified employees for the growing FinTech and InsurTech industry. The following is just a small selection: the Friedrich-Alexander-Universität Erlangen-Nürnberg offers the Insurance combined study programme as a dual course of study together with the Nuremberg Chamber of Commerce and Industry, in addition to the “Finance & Insurance” Master’s degree course. The Northern Bavarian Institute for Insurance Science and the Insurance Industry (Forum V) is also very active, creating a centre of excellence for insurance in northern Bavaria, together with other players in the sector to research interdisciplinary cooperation in the field of insurance. In the Bavarian capital, the Munich Risk and Insurance Center (MRIC) at Ludwigs-Maximilian-Universität supports teaching and research activities in the field of risk management and insurance. In addition to the renowned classical vocational training as a banker, academic training in banking is provided by a wide range of courses in business administration. Bavaria also offers specialised study programmes, like for example at the University of Bamberg with the “Finance & Accounting” Master’s degree course or the Chair of Finance and Banking at the University of Augsburg

59 % growth since the 1990s in the Bavarian banking and insurance sector.

Bavaria is moving with the times. The banking and insurance sector has grown by just under 60 percent in our state since the 1990s. This growth is also going to be increased further thanks to young start-ups’ ways of thinking.

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