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Brussels aims to become an insurtech hub
Belgian capital is calling on startups as it eyes up the huge opportunities in the insurance technology sector
Proximity to regulators, a rich mix of nationalities and its location make Brussels an attractive proposition for fintechs – and those disrupting the insurance sector are in particularly high demand.
Tech hubs across Europe are seeking to attract startup companies, and the Belgian capital is no exception.
Financial service industry-owned B-Hive, which has offices in Brussels, New York and Tel Aviv, is an organisation that helps fintechs to achieve growth, such as finding funding and connecting them with buyers. But B-Hive also has a role in promoting Brussels as a centre for startups to locate.
Fabian Vandenreydt, chairman of B-Hive Europe, based in Brussels, said the city now has about 160 startups on its books and the number is is growing. Vandenreydt was previously responsible for innovation at financial payments company Swift.
With the UK leaving the EU, cities across the European trading bloc are positioning themselves to take on UK tech startups that decide they need to move or set up additional operations in the EU.
Although Vandenreydt stressed that Brussels is not trying to compete with London for fintech startups, he said European cities are already beginning to attract startups that they might not have before Brexit.
“It is already happening, not just in Brussels but Amsterdam, Berlin, Frankfurt and other cities,” he said. “Because the current situation is not super clear, people are hedging their bets and are looking at ways that they can continue having access to the EU market.
“But London is still the biggest hub in Europe for reasons such as proximity to customers and access to capital. But I think that will be slightly eroded because of the uncertainty that we have today.”
Vandenreydt added: “Startups want to have access to a big market and do not want political restrictions.”
Read more about the battle for fintech in Europe
- London’s financial technology community warns of problems ahead as the reality of the UK leaving the EU unfolds.
- Banks and startups in the Nordic region are working together to develop new ideas in financial technology.
- While UK fintechs are playing whatever is in front of them amid the uncertainties caused by Brexit, the people putting the money into them are clear that things could take a serious turn for the worse.
- The European Commission has unveiled proposals to boost the EU’s financial technology sector.
Although not thinking about competing with London, Vandenreydt said he wants Brussels to be a good alternative.
“Our objective at B-Hive is not to try and compete with London because I don’t think that is reasonable – it is just to offer a solution to companies that choose Brussels,” he said. “Firms are looking at continuity of their business model, so they are looking for alternatives.”
Brussels is one alternative, said Vandenreydt, but there are many more, with every European city trying to verticalise what they offer.
So what about Brussels?
A key vertical for Brussels is insurance technology (insurtech). Although only part of the wider fintech revolution, insurtech is a rapidly growing sector. It is a sector in which challenger companies focus on consumer-friendly technology for the insurance industry.
According to analysis by Accenture, the number of insurtech deals in Europe grew by 118% in 2017, when the value of deals was $679m – 385% more than in 2016.
This market is likely to expand further. A recent global survey, carried out by Salesforce-owned MuleSoft, found that 62% of 18 to 34-year-olds said they would be happy for insurers to use their internet of things and social media data if it meant lower premiums and a more personalised service.
One company that has already chosen Brussels as its EU hub to complement its UK headquarters is insurance market Lloyd’s of London.
That is good news for Brussels, which is focused on fintech with a particular eye on its insurtech sub-group. “Every capital will promote its strengths and we never pretend to be London, but we have close proximity to the EU organisations and representatives of all banks,” said Vandenreydt.
A good place to be
One advantage of being in Brussels for companies in heavily regulated sectors, such as insurance services, is that it is where EU regulations are put together. These regulations affect startups that are disrupting business and consumer sectors, said Vandenreydt, adding: “If you want to talk about regulatory requirements around innovation, it’s a good place to be.”
Beyond insurtech, B-Hive has a focus on cyber security and the infrastructure part of financial services, including payments.
It also works with large tech companies and recently became the centre for Oracle’s European fintech innovation.
Oracle was looking for a partner to help find, screen and coach fintech companies that offer products complementary to its cloud portfolio, and it selected B-Hive in Brussels.
“We are going to jointly look for startups in not only fintech, but also pure banking and others,” said Vandenreydt. “We will select a few and coach them. We will help them learn about things like data privacy, cyber security and procurement law, which are things that often make it difficult for financial institutions to contract with startups.”
The idea, he said, is to enrich Oracle’s cloud offerings in certain verticals, where those startups will play a key role.