Gallagher Re: Mixed news from the global insurtech market
Global insurtech funding in 2023 fell 43.7% year on year, according to Gallagher Re's latest Global InsurTech Report.
The global insurtech market remains robust — particularly for late-stage startups — despite a marked decrease in funding, Gallagher Re reports in its Global InsurTech Report for Q4 2023 produced with CB Insights.
“If we take a step back and consider where we were even as recently as five years ago, the increased adoption, use, improvement and general view of technology today is actually quite astounding,” Andrew Johnson, global head of Gallagher Re InsurTech, writes in the report’s introduction.
Among the report’s major takeaways:
- Global insurtech funding decreased 43.7% year on year, from $8 billion in 2022 to $4.51 billion in 2023.
- However, funding in this space actually inched up 0.5% quarter on quarter, from $1.098 billion in Q3 2023 to $1.103 billion in Q4 2023.
- Roughly 40% of all Q4 2023 insurtech funding went to mega-round deals — a six-quarter high.
- Global deal share among U.S.-based insurtechs rose 5.50% between 2022 and 2023 — the largest gain among all countries.
- Fourth-quarter 2023 saw 41 venture technology investments from (re)insurers.
Although average check sizes were smaller and mega-round funding also dropped, Johnson maintains that there are reasons for optimism.
“Despite lower deal counts and funding, transactions were consistent and continued throughout 2023, indicating a mature and healthy market,” Johnston said in a press release about the report findings. “Whereas, 2021 was the peak of the market, and described as the first phase of the insurtech investment or the ‘Great Experiment’, 2023 could be viewed as the beginning of a new phase involving a sustained change in investor behavior. Will check sizes be smaller but not less frequent? Will mega-rounds become less common? Will the overall flow of deal activity continue? Time will tell, and we may one day reflect that 2023 was an overcorrection, and potentially itself an anomaly.”
Gallagher Re’s InsurTech Practice vets insurtech businesses at scale to help foster best-in-class technologies through partnerships with clients, technology integration and advisory.
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