UK Law and Practice Contributed by: Clare Swirski, E. Drew Dutton, Hugo Laing and Rosamund Wood, Debevoise & Plimpton LLP
9.9 Insurers’ Rights of Subrogation Due to the doctrine of subrogation, an insurer may pursue third parties for claims pursuant to which the insurer may be liable to the insured. The insurer can “step into the shoes” of the insured and pursue in the insured’s name – or require the insured to pursue – claims that may lie against third parties in respect of the insured event giving rise to a claim under the policy. To trigger subrogation, at common law it is necessary for the insured to be fully indemnified as a condition to the insurer exercising its subrogation rights. In practice, the extent of – and circumstanc- es for – the exercise of subrogation and procedures applicable are specified in the policy. An increasing number of start-ups are applying new technologies in the insurance space. Incumbent insurers are focused on partnering with and acquir- ing these businesses to avoid disruption, meet evolv- ing customer demands and capitalise on insurtech’s potential. This has led to an increase in capital being deployed into the insurtech space, by an increasing number of investors. Strategies/Collaboration 10. Insurtech 10.1 Insurtech Developments Several of the most common strategies are listed in the following. Importantly, these strategies are not mutually exclusive, and global players typically utilise several in parallel, if not all of them. • Establish incubator: insurers commonly estab- lish incubators to accelerate seed or early-stage technology ventures. Incubators are often exter- nal acceleration programmes that admit and train applicants, or internal research and development outfits. • Venture capital investment: these investments are made directly through a business unit or through a standalone venture capital-focused investment fund. • Partnerships: partnerships offer potential benefits to incumbents and start-ups – entrants to the UK market may look to emulate the strategic part-
nership between Aviva and US-based insurtech Lemonade. • Licensing technology: rather than incurring the risk and expense of growing or acquiring technology, insurers may seek to licence fully developed tech- nology from third parties. • M&A: insurers also seek to acquire insurance-ori- ented technology companies outright and integrate them into their global brand. For example, in Janu- ary 2024, Travelers, a property and casualty insurer, acquired Corvus Insurance, a cyber insurance managing general underwriter, for USD435 million. Travelers stated that the deal bolstered Travelers’ cyber insurance offerings. Products Some of the products involved in insurtech are as fol- lows: • artificial intelligence and machine learning (togeth- er, AI) – AI promises substantial improvements in operational efficiencies, pricing accuracy and the geographical diversity of insurance coverage (see also 12.1 Significant Legal or Regulatory Devel - opments ). • intelligent agents – virtual and digital assistants and chatbots capable of interacting with customers; • internet of things (IoT) and big data analytics – insurers use data from wearables to project health outcomes, whilst data from automobiles can pre- dict the likelihood of future accidents; • add-on tools for incumbent insurers, such as data analytics, claims handling and anti-fraud measures; and • blockchain – a digital peer-to-peer ledger system designed to securely record transactions in digital assets, and ownership thereof (see also 11.2 New Products or Alternative Solutions ). Market data shows global insurtech funding remained active through 2025, with AI-centred propositions attracting a rising share of funding, even as overall volumes fluctuated quarter-to-quarter. 10.2 Regulatory Response Efforts have been made by regulators to adapt to insurtech. One example is the launch of Project Inno- vate by the FCA in 2014. A key component of the pro-
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