Global insurtech funding up sharply in Q2: Gallagher Re

Global insurtech funding rose 39% year-over-year in the second quarter to $1.27 billion, according to a report Thursday from Gallagher Re, the reinsurance business of Arthur J Gallagher & Co.

Second-quarter funding was up 39.7% from $912 million in the first quarter, as the average deal size roughly doubled to $18.46 million from $9.81 million

Overall deal count declined 23.4%, from 107 in the first quarter 2024 to 82 in the second quarter, marking the lowest quarterly total since second-quarter 2020’s 74 deals, the report said

The artificial intelligence-centered insurtech sector attracted $445.81 million, 35.1% of the total. Since 2012, AI-centered insurtechs have received approximately 16% of all capital invested in the industry, according to a statement with the report.

The United States continued to be the leading destination for insurtech investment, netting 49% of total investments, with the U.K. a distant second at 13% and France and India tied at 6%.

In the property/casualty sector, funding for business-to-business insurtech transactions received the lion’s share of investment at 57%, followed by distribution-focused deals at 37%, and insurer tech funding at 6%, according to the report.

The insurtech investor base has shifted to now include more traditional commercial insurance industry players and fewer venture capitalists, said Andrew Johnston, Nashville, Tennessee-based global head of insurtech for Gallagher Re.

“There are now more reinsurers and insurers investing than ever have done before. Similarly, there’s been a big exodus of the general tech VC funds. It’s probably one of the biggest fundamental shifts,” he said.