Distribution remains the most lucrative and active segment of the insurtech market, according to new research from Oliver Wyman.

The management consulting company partnered with Policen Direkt, a life insurance startup in Germany, to take a look at more than 1,000 insurtechs worldwide and get a handle on the market for their joint "Insurtech Caught on the Radar" report. Insurtechs were divided into 19 subcategories, which themselves were grouped into three overarching categories.

Of those three top-level categories, distribution companies working on solutions around reaching customers through digital channels, claimed 42% of the insurtechs, the largest proportion. Next up was operations, or insurtechs that focus on back-end business process, with 39%.

Rounding out the groups was proposition, which encompasses companies that target the very nature of insurance. These companies are offering more value-added services in addition to coverage, or providing coverage for new risks endemic to the digital age. They are more likely to be insurers themselves, and are threatened the most by legacy carriers, Oliver Wyman says.

"There are significant opportunities for those pursuing opportunities along the right avenues. The segment might in the future even bring forward the first true insurance disruptors," the consultancy says.

An example of insurtechs that fall under the proposition segment are Trov and Slice, for their situational, short-term coverage options. Other companies Oliver Wyman noted were Lemonade, for its community-based model; and Cloudsurance, because of its focus on an "emerging" risk.

"The emergence of newly funded and fully digital insurance carriers might bring forward real breakthroughs," Oliver Wyman says. "It is very likely that the segment will look quite different in a few years."

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