Today, we sit down with Florian Graillot, a leading voice in the insurtech ecosystem and Founder of AstoryaVC, a specialist venture capital fund dedicated to transforming the insurance industry. Florian shares his perspective on how Insurtech has evolved — from early digital distribution models to today’s AI-driven, B2B, and embedded solutions. He discusses the changing expectations for startups and how collaboration between incumbents and innovators is shaping the next phase of insurance transformation.

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Looking back at the first wave of Insurtech, what stands out most—the successes, the failures, or the lessons that shaped where the industry is today?

That’s a very fair question as the hashtag InsurTech recently turned 10 ! Based on all investments announced across Europe in insurance technology, I’d say there are several trends to keep in mind.

The first one is that most startups from that initial wave of InsurTech were addressing the ‘distribution’ part of the value chain. Since inception, over half of all rounds announced were in that section. Most players were even distributing directly to end customers (B2C or B2SME) while another significant part of funding went to full-stack players (startups operating under an insurance license).

Since the second half of 2022, things have changed.

Investors are currently fueling a broader range of startups, either embracing different distribution models (e.g. ‘embedded insurance’) or addressing other sections of the value chain. I think about the ‘product’ part where more startups are leveraging technology to build resilience and tackle emerging risks (including climate or cyber for instance). And a growing number of players have embraced a B2B positioning, meaning they are developing technology for incumbents.

Ultimately, several leaders have emerged as the VC market has pivoted from “growth at all costs” to “profitable growth”. Several startups have indeed reached profitability while they have reached great milestones. There are several players on the market with over 500,000 customers - even close to 1m ! -, generating hundreds of millions of Gross Written Premium per year. In the UK, I think about Marshmallow selling car insurance in the UK ; I France I would refer to Alan selling health insurance, Acheel a multi-product full-stack InsurTech or Descartes Underwriting doing parametric weather (and cyber) insurance ; in Germany, Getsafe is selling many B2C insurance products.

Long story short, the first wave of insurance innovation is very biased towards two single business models (D2C and full-stack) while several players have clearly emerged, and insurance innovation is more business diverse than ever, getting closer to the insurance core engine.

As incumbents increasingly integrate AI-driven underwriting and claims automation, do you see space for pure-play Insurtech disruptors, or is the future more about partnerships and embedded models?

AI is a buzzword. But it’s also a reality. Since the beginning of this year, a third of all deals announced in InsurTech Europe were AI-first players ! There are two trends currently structuring the market. Several players are doing “AI in insurance” and building a product or use-case while teaming up together with their insurance customers & partners. Other players are focusing on a single use-case. In the first scenario, we see shorter sales cycles but I’m wondering how to demonstrate a clear RoI with unclear use-case scenarios (up-front). In the second category, sales cycles are similar to those enjoyed in Enterprise software but the RoI can easily be demonstrated as the value proposition is clearly detailed upfront. Let’s see if both categories remain on the market or if one takes the lead in the near future. Anyway, incumbents do initiate many AI projects and there is a real diversity in terms of business models. Almost all of the value chain is under threat. Though, claim management is the clear leader. Underwriting and product design are a growing trend though less players are active on these sections of the value chain (so far).

From your vantage point, what are the most pressing risks Insurtechs should be tackling today—regulatory, technological, or macroeconomic? And how do new challenges like electric vehicles, cyber threats, climate change, and digital assets shift that risk landscape?

I see three major challenges for insurers in the near future. The first one is how to keep growing while inflation is going down (assuming it led to a massive price surge in the last few years, which drove revenues growth). The second challenge is around operational efficiency. Many players are even raising it publicly. And technology could definitely help. Many B2B InsurTech are already offering their services to incumbents ! Last but not least, new risks are emerging and threatening existing business lines or unlocking new ones. I think about climate, cyber, the switch to electric vehicles, financial fraud & sams, health wellbeing & longevity.

Home insurance has become unprofitable in some markets due to climate risk. How can technology help insurers keep coverage affordable while remaining sustainable as businesses?

In the US for instance, several players have indeed left local markets. This is not sustainable. Neither in an economic standpoint - revenues are down for these players - nor societally speaking - how to live in a non-insured World ?! In addition, in Europe for instance, several players faced a tough financial year when natural catastrophes pilled while they had a great financial year when the climate was smoother. Such a dependence on climate & natural events, is not sustainable either for incumbents. This is probably why we are spotting so many players exploring how technology (data, algorithms) could help better understand, assess and price these risks. I’m even wondering if, in several locations, climate insurance might become a must have on top of - or instead of - home insurance. And beyond pure insurance it might be a matter of expanding the risk value chain with prevention, risk assessment and resilience.

2021 was the peak for VC funding in Insurtech, followed by a steep drop mirroring Fintech and VC globally. How has this climate changed the way startups should position themselves? And what separates those able to raise late-stage capital from those that stall after early traction?

You’re right, the VC market has pivoted from “growth at all costs” to “profitable growth”. Startups need to show figures earlier in their journey and should demonstrate their capacity to make money. This may sound obvious but it’s challenging in the insurance industry. First, you need to sell insurance in a profitable way meaning that premium generated should cover claims with a margin ! Then you need to distribute these products - or a tech you have developed - in a profitable way, meaning you should earn more than what it costs you to find customers. Ultimately, a company could consider being profitable if other expenses enable it.

Whatever the positioning (selling technology to incumbent or selling insurance products to end customers) startups now need to keep that in mind and not necessarily reached profitability in the short term - investors are here to finance the first customers - but demonstrate they have a resilient business model !

Are you seeing a shift in how Insurtech VCs evaluate customer acquisition models—particularly in the SME space where conversion cycles are longer and more costly?

I would refer to the famous CAC/LTV ratio in the VC industry. This compares potential revenues (LTV) with how much it costs to sign these customers (CAC). And, as mentioned above, both startups selling insurance or technology should think this way and demonstrate their resilience in that background. The SME space might sound particularly challenging as it combines downfalls: small customers - compared to Enterprise customers - but still professional players, meaning a long sales cycle (compared to B2C). But startups selling insurance to SME - or operating in the SME insurance space - have long been a model in the InsurTech space : regularly there are new entrants, and at a later stage, +Simple is now under Private Equity ownership !

Where do you see the greatest impact of Insurtechs on insurers: driving revenue growth, reducing operating costs, or lowering claims expenses? Which of these areas still holds the most untapped potential?

Things have evolved over the years. In the D2C space, InsurTech 1.0 claimed it would replace incumbents. If several players have reached significant milestones, things are more balanced and we see more partnerships between corporates and startups.

In the B2B space, things have always been more balanced. A lot has been explored in claim management - targeting operational efficiency, but fraud is a regular use-case too (which has an impact on claim expenses. And the more the ecosystem matures, the more startups get close to the insurance core engine (risk assessment & pricing). This might have an impact on the loss ratio.

In addition, tech-enabled MGA are leveraging technology (data, algorithms, …) to better address vertical niches. These players may be growth opportunities for insurers they are working with.

Overall, tech startups have various impacts on the insurance business. Which makes sense as every section of the value chain and every business line is under innovation threat. There is nowhere in the market where startups are not exploring how to improve - or revamp - how insurance is done !

Europe’s Insurtech scene is often described as dominated by France, Germany, and the UK. Which other regions or markets across the continent are underestimated right now?

Actually the InsurTech ecosystem is vibrant across Europe. It’s true the UK and France are clear leaders - in terms of rounds announced - while Germany is slightly below what it should be (based on the FinTech comparable for instance). But beyond these three largest ecosystems, many others are worth it. And that’s something we advise to board members we meet: you should keep an eye on what is happening beyond your domestic market, wherever you are based in Europe. Spain has long been very active, Italy is gaining momentum recently, the Nordics enjoy regular InsurTech players, while Benelux has already famous names on its ground (think of Qover in Belgium, Friss in the Netherlands or Ibisa Insurance in Luxembourg). Eastern Europe is very active too, with very strong teams. And you may remember that Quantee - from Poland - got acquired by Guidewire in the first half of 2025 !

If insurers truly have less useful customer data than tech platforms or Big Tech, is there a future where those platforms dominate insurance distribution? And what’s the single biggest mindset shift incumbents need to make to benefit from this second wave of innovation rather than be left behind?

I really enjoy that topic. On one hand, I remember the early days of InsurTech when the market spoke about “the Uber of insurance”. Then, Google or Amazon gave it a try to insurance and resumed their initiatives. These failed attempts seemed like tech giants could not enter insurance. In the meantime, several have done great in Financial Services (e.g. banking). And beyond these few players - the tech giants - there are plenty of vertical platforms which have significant customer bases in their niche. These players are highly relevant to push insurance to their customers. And actually many already offer insurance solutions. This is enabled by InsurTech players operating in the “embedded insurance” field. They have developed technology enabling any third party to become an insurance distributor. Which scale could these players reach? This is another question. Let’s have a look at eCommerce figures: it accounts for ~30% of all retail spendings. Online insurance distribution might reach such a market share in the future. Embedded insurance is one way to do it, alongside direct distribution. Let’s see where it lands. At least, I doubt insurance could be the only industry worldwide to remain fully offline…

Looking ahead, what’s the single biggest mindset shift incumbents need to make if they want to benefit from this second wave of insurance innovation rather than be left behind?

I would refer to the “make or buy” dilemma.

This is a real pattern I’ve spotted while investing in InsurTech for 10 years (first at AXA Ventures, then at astoryaVC). Incumbents tend to make things first. Whatever the tech trend (note this applies well to the current AI wave). For many reasons - starting with the challenge to attract, and most of all to keep, tech talents - incumbents often fail in their internal initiatives. Ultimately, they come back to the market and partner / buy an external solution. This means there is one way to take the lead and stay 24 to 36 months ahead of your competitors: go directly to external solutions.

Of course, there is no one-size-fits-all rule. It’s a matter of choosing the right path: “make” where you do have a competitive advantage ; “buy” elsewhere. Too often, the market tends to “make” on every topic. This should be more balanced. Fortunately, the market is big enough to see several incumbents “buy”, building a competitive advantage by teaming up together with a startup on a specific use-case !