Q1 2024 global InsurTech funding dropped 17.3% quarter on quarter to $912.3 million – the lowest quarter in four years, according to the latest Global InsurTech Report by global reinsurance broker Gallagher Re. The decrease in funding was largely attributable to a lack of mega-round deals, the Q1 report stated.
While average InsurTech deal size fell below $10 million for the first time since Q3 2017, deal count climbed to 107 in Q1 from 100 in the previous quarter – indicating that frequency and interest are not waning, but the average check size per deal is decreasing. What’s more, early-stage InsurTech funding increased 26.5% quarter on quarter, countering the broader InsurTech picture.
“Since the InsurTech investment peak in 2021, we have continued to see a funding reset,” said Andrew Johnston, Global Head of InsurTech, Gallagher Re. “With activity up but average deal size down, investors are becoming more democratic in their funding allocations and spreading capital more evenly among companies. This has resulted in a more sustainable InsurTech market.”
From Q4 2023 to Q1 2024, Property & Casualty (P&C) InsurTech funding fell by 22.5% and deal count dropped by six. Life & Health (L&H) InsurTech funding also dropped by 4.7% quarter on quarter, but deal count increased 54.2% over the same time period.
AI-centered InsurTechs in Q1 accounted for 28% of all deals and saw a slightly higher average deal size ($10.5 million) than overall InsurTechs ($9.8 million). Additionally, 16 of the 30 AI-centered InsurTech deals went to early-stage companies, with average deal sizes of $6.1 million – more than $2 million larger than InsurTechs that were are not AI centered.
(Re)insurers continued to invest in InsurTechs in Q1, securing 37 private technology investments, down slightly from 41 in Q4 2023, but up from 30 year on year. The United States made up 54% of these investments.
Gallagher Re’s 2024 Global InsurTech Report Series
The Q1 Global InsurTech Report kicks off this year’s quarterly series which focuses on the role of AI in (re)insurance, and each quarter will examine one of the following areas where AI can add value: Distribution, Risk, Central Business Operations and Claims.
Johnston said: “The focus on AI this year will help guide businesses through the daunting task of understanding the principles of AI, its various subcomponents, and ultimately what advantages can be gained from its application.”
The Q1 report focuses on Distribution, providing insight on AI use cases, the role of data andwhere AI tools are having the most impact. Additionally, the report features:
- InsurTech business case studies on bolttech, REIN, and Semsee;
- Deal of the Quarter profile on RAINBOW;
- Incumbent case study on Admiral and Google Cloud;
- Internal case study by Gallagher Re’s Cyber team;
- Columns by Iain Willis of Gallagher Re and Adam Cherubini with Bottom Line Consulting; and,
- Investor spotlight on Parker Beauchamp with Markd.
Download the full report here.
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