Global Insurtech funding jumps as industry doubles down on AI
According to Gallagher Re’s latest Global Insurtech Report, the global insurance tech industry has reached a new stage of maturity and growth after a decade of uncertainty.
This report, the first in the 2025 series, is a collaboration between Gallagher Re, Gallagher, and CB Insights.
The report defined 2024 as a year of contrasts, likening its two halves to the duality of Dr. Jekyll and Mr. Hyde, for the Insuretech industry.
On the one hand, in the first half, funding jumped 25 per cent, with most funds directed towards early-stage companies. However, during the second half of the year, funding was inconsistent and volatile, with just five mega-rounds constituting 55 per cent of capital deployed in the third quarter.
Still, (re)insurer investment activity reached a new peak in 2024, with 150 deals completed, compared to 107 deals in 2021, when total funding was four times higher.
Gallagher said this was in part due to (re)insurers’ growing commitment to and confidence in the transformative potential of technology, with a particular focus on early-stage investments, with around a third of deals with companies focused on AI.
After a slow end to 2024, with deals down to $690m (£516m) in the fourth quarter from $1.4bn in the third quarter and nearly $2.3bn in the first half, 2025 began with a “surge of activity.”
Global Insurtech funding jumped by 90.2 per cent quarter-on-quarter to $1.3bn in the first quarter and two-thirds of this total went to companies with an AI focus.
A notable event was Munich Re’s acquisition of Next Insurance for $2.6bn in March, which will help the European reinsurance giant’s direct insurance arm, ERGO, to enter the US market.
Meanwhile, Guidewire expanded its AI and automation capabilities by acquiring Quantee, a Polish InsurTech offering dynamic pricing software.
Other significant transactions included agency alliance SIAA’s acquisition of DONNA ai and Vouch’s acquisition of StartSure.
Looking at deals over the past 12 years, the Global Insurtech Report noted the sector’s early years were dominated by undisciplined future-gazing and a disconnect between theoretical predictions and business realities.
The pandemic ushered in an era of discipline and uncertainty, as companies tried to adapt to the new normal and maintain their growth plans. To ensure survival, a series of restructurings and mergers resulted.
Today, the current era is defined by pragmatism, with a renewed focus on applying technology within sound business models, as shown with recent deals and renewed interest in funding.