Worldwide insurtech investment slows after bumper year

Global investment in insurtechs slowed to $2.2 billion ($3.11 billion) in the first quarter, less than half of the previous corresponding period, the inaugural Global InsurTech Report from Gallagher Re says.

The result comes after 2021 “broke all records” with $US15.8 billion ($22.36 billion) invested, the highest annual capital inflow ever and more than in 2020 and 2019 combined, on a record 564-deal total.

Records were also reached last year for international participation, unicorn creation, IPOs, and single-deal size when Integrity Marketing Group raised $US1.2 billion ($1.7 billion) in December.

“An incredible upwards trajectory of global insurtech funding has occurred during the past nine years. An enormous $41.65 billion ($58.95 billion) has been invested globally across 2249 deals in 63 countries,” Gallagher Re global head of insurtech Andrew Johnston said.

“Technology will be the platform, enabler and product that continues to keep our industry relevant and cost efficient,” Mr Johnston said.

Gallagher Re says the first quarter was “fascinating” geographically, as while the US dominated with a 47% share of the number of deals, 31 countries participated. Australia took a 4% share to be equal with Singapore and India (6 deals each).

In the first quarter, five global mega-rounds totalled $664 million ($939.79 million), representing 30% of all capital invested in the insurtech sector — the second lowest percentage driven by mega-rounds since 2017.

The first quarter had the highest ever recorded participation of early-stage investment at $US660 million ($934.12 million) – a “possible signal to the increased democratization of capital across more deals”.

Gallagher VP and head of insurtech development Jonathan Hendrickson says the full benefits of the innovation and investments made are yet to be seen.

“As a share of global venture funding, the sector is underinvested relative to its share of GDP. For the insurance and brokerage industry, as we start to see some of the investments mature, I expect we will see even greater improvements in customer experience, data insights and proactive risk management and mitigation.”

View the full report here.