Global insurtech funding reaches $1.01bn in Q3, Gallagher Re reports

Insurance technology investment reached $1.01bn in the third quarter of 2025, according to Gallagher Re’s latest Global InsurTech Report, signalling a sustained period of stability in the sector’s funding environment.

Quarterly totals have hovered around $1.1bn for 11 consecutive quarters, the reinsurance broker said.

Seven of those were within a 20% swing of the average, showing a new phase of consistency after years of volatility, according to the broker.

Andrew Johnston, global head of insurtech at Gallagher Re, said investor strategy had evolved significantly since the boom years of large, high-risk funding rounds.

“Investor strategy has shifted away from massive, high-risk bets on a few companies to a more balanced approach,” he said.

“While the huge ‘winner-takes-all’ funding rounds are less common, the underlying market is still very active, shown by strong deal flow and early-stage funding volatility. This signals that while the appetite for pure venture risk is alive and well, funding for growth stage companies is maturing and becoming more selective.”

Q3 funding dipped 7.3% from the prior quarter’s $1.09bn, with 76 deals recorded, the lowest count since Q2 2020.

Early-stage investment rose 6.8% quarter on quarter, and nearly three-quarters of funding (74.8%) went to AI-centred insurtechs.

AI and commercial insurance in focus

The Q3 report spotlights AI adoption in commercial insurance, which raised $470.7m in funding during the quarter.

Gallagher Re estimates that of the more than $60bn invested in insurtechs since 2012, around $9.3bn has gone to commercial-focused ventures.

The study outlines the use of AI to streamline underwriting and risk management, including automating data extraction from documents, improving fraud detection, and identifying portfolio anomalies to assist human decision-making.

Freddie Scarratt, global deputy head of insurtech at Gallagher Re, said integrating AI into commercial insurance remains challenging due to fragmented data and legacy systems.

“If an AI model denies coverage or flags a claim, underwriters, regulators and potentially reinsurance auditors need to understand why,” he said.

“Integrating cutting-edge AI platforms with decades-old core administration systems is a major technical and financial challenge for the entire risk chain.”

Scarratt also pointed to the industry’s growing need for hybrid expertise.

“The skills of a traditional underwriter or claims adjuster are still essential, but they must be augmented with data literacy and an understanding of how to work alongside AI tools,” he said.

“Finding and cultivating this hybrid talent is a critical challenge for every carrier,” Scarratt added.