International insurtech funding falls under $1 billion in Q1 2024

International insurtech funding has dipped under the billion-dollar mark amid a scarcity of mega-round offers throughout the first quarter of 2024, in accordance with Gallagher Re.

In a brand new report, the worldwide reinsurance dealer revealed that insurtech funding within the first quarter of the yr amounted to simply $912.3 million. This can be a 17.3% lower from the earlier quarter, making Q1 2024 the bottom interval for international Insurtech funding in 4 years. 

Andrew Johnston, Gallagher Re’s international head of insurtech, mentioned the market has continued to see a “funding reset” since insurtech funding peaked in 2021.

The report highlighted a drop within the common measurement of insurtech offers, which sat under $10 million for the primary time for the reason that third quarter of 2017.

Regardless of the lower in deal measurement, the variety of insurtech offers elevated to 107 from 100 within the earlier quarter. Early-stage funding additionally elevated 26.5% quarter-over-quarter.

“With exercise up however common deal measurement down, traders have gotten extra democratic of their funding allocations and spreading capital extra evenly amongst corporations,” mentioned Johnston. “This has resulted in a extra sustainable insurtech market.”

Synthetic intelligence performs key function in insurtech funding developments

Gallagher Re’s report additionally shared insights into insurtech funding developments inside particular trade segments.

Funding for property & casualty insurtech dropped by 22.5% from This fall 2023 to Q1 2024. The variety of offers additionally fell by six, in accordance with the report.

As for the life & well being phase, insurtech funding dropped barely by 4.7%, however the variety of offers elevated by 54.2%.

Moreover, AI-focused insurtechs represented 28% of all offers throughout the quarter. Additionally they noticed a better common deal measurement of $10.5 million in comparison with the general common of $9.8 million.

Amongst these transactions, 16 out of 30 went to early-stage corporations, with common deal sizes of $6.1 million. Gallagher Re mentioned this was over $2 million greater than non-AI-centered insurtechs.

By way of funding sources, (re)insurers made 37 non-public expertise investments within the quarter, down barely from 41 within the earlier quarter, however nonetheless up from 30 year-on-year.

The US additionally represented 54% of those investments, in accordance with Gallagher Re.

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