Tech funding across insurance bounced back from a fourth quarter low to hit $1.39bn in this year’s first three months, according to reinsurance broker Gallagher Re.
Analysis from Gallagher Re shows insurtech investment bounced back to reach $1.39bn in the first quarter of 2023.
The recovery came after “a broad-based reset in 2022” the reinsurance broker said.
The $1.01bn insurtech investment recorded for the final quarter of last year was the lowest quarterly total since the first quarter of 2020, Gallagher Re observed.
The latest figure represents a 37.6% increase on that low, noted the reinsurance broker.
“2023 may be the beginning of a new era for Insurtech. 2021 undoubtedly marked the funding peak, fuelled by Covid-19 uncertainty and an organically occurring crescendo,” said Andrew Johnston, global head of insurtech at Gallagher Re.
Property and casualty (P&C) insurtech funding surged by more than 53% to hit $967.89m.
Gallagher Re said P&C investment “drove the quarterly investment increase”; life and health grew some 9.6% in comparison.
Average deal size across all insurtech meanwhile was also up 25.3%, with the number of deals recorded steady.
Mega-round funding accounted for only 12.9% of the total investment, the lowest since the first quarter 2020 dip, according to Gallagher Re’s Global Insurtech report.
Johnson said: “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.
“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,” he 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,” Johnson added.