Global insurtech new funding falls 61.9%: Gallagher Re

New funding for the global insurtech sector dropped to $916.7 million during the second quarter of 2023, down 61.9% from the year-earlier period, according to a report Thursday from Gallagher Re, the reinsurance business of Arthur J. Gallagher & Co.

Second-quarter funding was also down 34.0% sequentially from $1.39 billion in first-quarter 2023. The second quarter was the first in three years to fall below $1 billion in new funding and the third consecutive quarter with only one “mega round” of funding above $150 million.

There were 97 transactions in the second quarter, 49% in the U.S., matching the 49% of all 2,973 transactions since 2012 targeted for the U.S. India was second in second-quarter 2023 with 9% of transactions, followed by France with 6%. Since 2012, the U.K. has garnered 8% of transactions, second to the U.S., while China and India tied for third with 5% each.

Business-to-business insurtechs garnered the largest portion of funding at 51%, followed by distribution at 42% and insurer-focused techs at 7%, compared with 45%, 50% and 5%, respectively, since 2012, according to report data.

Andrew Johnston, Nashville-based global head of insurtech at Gallagher Re, said there remains investment interest in insurtech and noted that $ 1 billion is still substantial new capital for the sector.

Mr. Johnston also said the insurtech sector has reached the end of its “phase 1,” 10 years of experimentation that helped the insurance industry understand the role technology will play, leaving investments now more focused than previously.