The number of partnerships being struck between large insurers and technology start-ups has been increasing significantly, with 31 deals struck last quarter according to CB Insights.  

This represents significant growth and nearly double the number of reported agreements compared to Q1 2017. 

This data covers insurers providing capacity to start-ups (who are acting as a managing general agent (MGA)), distributing their products via new online channels, and buying software tools / new data sources from a start-up.

Reinsurers have been particularly active.  By working with start-ups and providing balance sheet, reinsurers are leveraging more nimble, digitally native businesses to expand their books of business.  Munich Re is the most active partner with a total of 18 partnerships agreed in the last two years (including MGA and some non-MGA agreements).

However, some start-ups have already become frustrated with operating under the constraints imposed upon them by the typical MGA model.  CEO's tell us that they want to control all of the levers of their businesses (pricing, underwriting and claims), and to do that, they must become full-stack insurance companies.  Metromile abandoned the MGA model after launching in just 8 states.  Others are getting ready to follow.