First quarter new funding for InsurTech surge 37.6%: Gallagher Re

This signals the industry may return to pre-COVID-19 levels in 2023.

Funding for the global insurance technology (insurtech) industry increased by 37.6% to $1.3b in Q1 2023, reports Gallagher Re.

This marks a significant improvement from the previous quarter,  when funding dropped to its lowest point since Q1 2020, at $1b.

The global reinsurer said this rise signals that 2023 may see gradual increases in funding in the Insurtech industry, last observed in 2021. 

In 2021, a large majority or 62% of investments were made through mega rounds. In contrast, the figure decreased to 41% in 2022.

The average deal size in the global Insurtech industry increased by 25.3%. Notably, mega-round funding only contributed to 12.9% of the total funding, marking the lowest percentage since the dip observed in Q1 of 2020.

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The quarter’s investment was driven by property and casualty (P&C) insurtech funding, growing above 53% to $967.9m.

Likewise, life and health (L&H) segment climbed 9.6% to $420.7m.

The total early-stage funding for the global insurtech sector amounted to $423.6m, but early-stage funding for (L&H saw a significant drop of 44.3% compared to Q4 2022, with only $119.04m in funding. 

Despite this, the average early-stage deal size increased by 28% to $8.3m. Moreover, (re)insurers continued to invest mainly in early-stage rounds, a trend that has persisted for six consecutive quarters.