Global InsurTech funding fell to $912.25 mn in Q1’2024
Global InsurTech funding fell to USD912.25 million in Q1’2024, the lowest since Q1’2020. The industry saw no quarterly USD100 million+ mega-round deals for the first time since Q3’2017. Property & Casualty InsurTechs raised USD605.58 million in Q1’2024, a low not seen since Q3’2018.
According to Gallagher Re InsurTech reports, over a quarter of Q1’2024 deals went to AI-centered InsurTechs. Half of Q1’2024 deals went to distribution-focused InsurTechs. The majority of tech investments from (re)insurers were early-stage. Quarterly global InsurTech funding fell to the lowest level since Q1’2020, decreasing 17.3% quarter on quarter.
Global InsurTech funding dipped below USD1B in Q1’2024, falling from USD1.103B in Q4’2023 to USD912.25M in Q1’2024. The decrease was largely attributable to an absence of USD100M+ mega-round InsurTech deals for the first time since Q3’2017.
In the first quarter of 2024, InsurTech deal activity rose by 7% from the previous quarter, with transactions increasing from 100 to 107 (see Top-Performing Insurance and InsurTech Stocks). This growth continues a trend noted in earlier reports, where interest in the sector remains strong, although the average investment per deal is decreasing.
Global InsurTech funding
The average deal size experienced a significant reduction of 30.6%, decreasing from USD 14.14 million in the fourth quarter of 2023 to USD 9.81 million in the first quarter of 2024. This marks the first time since the third quarter of 2017 that the average global InsurTech deal size has fallen below USD 10 million, according to Global Landscape of Insurance Digital Transformation.
P&C InsurTech funding also declined, dropping 22.5% to USD 605.58 million in the first quarter of 2024, the lowest since the third quarter of 2018.
The average deal size in this category reached its lowest point since the first quarter of 2018 at USD 10.09 million, and the total number of deals decreased to 70, a reduction of six deals from the previous quarter. This decrease primarily resulted from fewer transactions in the categories of lead generation, brokerage, and managing general agents (MGA).
Funding for Life & Health (L&H) InsurTech remained relatively stable, decreasing only slightly by 4.7% to USD 306.67 million.
Annual InsurTech funding volume and transaction count
InsurTech by the Numbers
The number of deals in this sector increased dramatically by 54.2%, rising from 24 in the last quarter of 2023 to 37 in the first quarter of 2024.
Despite the increase in the number of transactions, the average deal size in L&H InsurTech fell by 39.38% to USD 9.29 million.
Funding for early-stage InsurTech surged by 26.5% from the fourth quarter of 2023 to the first quarter of 2024, reaching a total of USD 280 million.
This growth spanned both Property & Casualty (P&C) and Life & Health (L&H) sectors, which saw increases of 16.8% and 66.9% respectively (see How InsurTech Can Optimize Pet Insurance Industry?).
Quarterly InsurTech Funding Volume — All Stages
Quarterly InsurTech Funding Volume — Early-stage Incubation
The average deal size for early-stage InsurTech also rose from USD 4.43 million in the last quarter of 2023 to USD 4.83 million in the first quarter of 2024. The number of deals increased from 58 in the fourth quarter of 2023 to 64 in the subsequent quarter, largely due to a rise in Seed/Angel investments from 36 to 45.
AI-focused InsurTechs commanded 28% of the deal flow in the first quarter of 2024, emphasizing the importance of artificial intelligence in the sector.
These AI-centric companies secured USD 316.06 million in funding. Notably, the largest deal of the quarter was a USD 73 million Series B funding round for Hyperexponential, an AI-driven pricing platform.
Quarterly InsurTech Transactions by Target Country
Quarterly InsurTech Transactions by Investment Stage
Out of 30 AI-focused deals, 16 involved early-stage companies, which secured higher average deal sizes of USD 6.06 million, compared to USD 3.81 million for their non-AI counterparts.
Despite this, the overall average deal size for AI-centered InsurTechs was only marginally higher at USD 10.53 million than the overall average for the quarter.
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FULL Report — https://beinsure.com/global-insurtech-report-role-ai/
