Insurtech funding down in third quarter from second quarter

Global insurtech funding fell 7.9% to $1.01 billion in the third quarter compared with the second quarter, according to a report Thursday from Gallagher Re.

Property/casualty insurtech funding jumped 90.5%, from $362.34 million in the second quarter to $690.28 million in the third. Eight of the third quarter’s top 10 deals went to property/casualty insurtechs.

Third-quarter life and health insurtech funding declined 56.8% quarter to quarter, to $314.75 million.

There were just 76 deals in the third quarter, the lowest count since second-quarter 2020.

The average deal size increased from $12.83 million in the second quarter to $15.70 million in the third.

AI-centered companies netted 74.8% of third-quarter insurtech funding, raising $751.72 million across 49 deals.

Overall, quarterly insurtech funding has been coming in at around $1.1 billion for 11 consecutive quarters.

Over the past three years, seven of the 11 quarters have recorded a funding total within 20% of the mean average of $1.1 billion. Ten of the 11 quarters have recorded a funding total within 30% of the mean average.

During that time, there has been a general pivot among insurtechs toward business models that help incumbent insurers and away from competing with them directly for customers, “an incredibly cash-intensive business,” the report said.