Insurtech funding bounces back in Q1 2023
Gallagher Re reports that P&C insurtech funding drove the quarterly investment increase, as it surged by more than 53%.
New funding for the global InsurTech sector rose to $1.39 billion during the first quarter of 2023, according to the latest Global InsurTech Report from Gallagher Re.
The new figure represents a 37.6% increase over late 2022, when the insurtech sector saw its lowest funding infusion in two years, the global reinsurance broker reports. Property and casualty insurtech funding drove the quarterly investment increase, as it surged by more than 53% to $967.89 million.
“2023 may be the beginning of a new era for InsurTech,” Andrew Johnston, Global Head of InsurTech at Gallagher Re, said in a press release. “2021 undoubtedly marked the funding peak, fueled by Covid-19 uncertainty and an organically occurring crescendo. The sector came back down to earth in 2022, leading to some serious restructures, cost-saving actions, and new business strategies. A lot of companies did not make it through.”
Average deal size in early 2023 was up 25.3%, Gallagher Re said. But deal count remained steady. Mega-round funding accounted for only 12.9% of the total, the lowest since the 2020 Q1 dip.
“Founders are now thinking about long-term sustainability and growth, and realizing their businesses will need to pull the plough themselves, reliant on their own capabilities and revenues,” Johnston continued. “A significant upside seems to be the genuine willingness of many (re)insurers, brokers, and agents to adopt technology. The pressure is therefore on InsurTechs to make their businesses palatable and value-adding.”
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