Global insurtech funding decreases 43.7% in 2023: Gallagher Re
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Global Insurtech funding declined 43.7% to $4.5 billion in 2023, as both property/casualty and life sectors showed declines, according to a report Thursday from Gallagher Re, the reinsurance brokerage of Arthur J. Gallagher & Co.
Property/casualty insurtech funding dropped 35.4% to $3.4 billion, while life & health dropped 59.8% to $1.1 billion.
While the yearly funding total was the lowest since 2018, Andrew Johnston, global head of insurtech for Gallagher Re, noted that $4.5 billion is “still a lot of capital” and investors are showing a much more disciplined approach to investing than previous years, including 2021’s record $15.8 billion, which also benefitted from more favorable macro factors such as lower inflation.
Deal count declined along with funding, down 19% to 422 in 2023, according to report data.
During 2023, the first quarter saw the most insurtech funding with $1.389 billion and the second quarter the least at $917 million. Insurtech deals fell 16.0% quarter on quarter, from 119 in the third quarter to 100 in the fourth.
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Average deal size, however, increased from $10.4 million in the third quarter to $14.1 million in the fourth, according to report data.
The U.S. continued to see the vast majority of funding, 48%, with the U.K. and China a distant second and third with 8% and 6%, respectively.
Mr. Johnston also noted that corporate venture capital, such as a large incumbent with a tech investing arm, was supplanting independent venture capital, which could be more sensitive to higher interest rates.
He said reinsurers are making more insurtech investments, largely in satellite imagery and other geospatial technologies.
