PriyaPatel
TLDR:
Insurtech funding saw a notable increase in Q2 2024, reaching $1.27 billion globally. AI-centered InsurTechs and risk-related technologies were key focuses. Despite a decrease in the number of deals, average deal size rose significantly. Early-stage investments also saw a rise. The industry continued to support technology businesses, with re/insurers playing a key role.
Key Elements:
Insurtech funding in Q2 2024 reached $1.27 billion globally.
Focus on AI-centered InsurTechs and risk-related technologies.
Decrease in number of deals, but rise in average deal size.
Early-stage investments saw an increase.
Continued industry support for technology businesses, with re/insurers playing a key role.
Full Article:
Insurtech funding experienced a notable increase in the second quarter of 2024, with global investments reaching $1.27 billion, the highest level since the first quarter of 2023. Early-stage insurtech funding also saw a rise, totaling $377.60 million, the largest amount since Q1 2023. The average deal size rose to $18.46 million, the highest since Q3 2022. Despite the increase in funding, the overall number of insurtech deals dropped to 82, marking the lowest quarterly count since Q2 2020. According to insights from Gallagher Re, one-third of the deals in Q2 2024 involved AI-centered InsurTechs, while 40% focused on risk-related technologies.
In the first quarter of 2024, there was a downturn in global insurtech investments. However, there remained a strong industry focus on supporting technology businesses. Although cash valuations for insurtechs were down, there was an increase in the number of transactions, particularly those involving funds associated with re/insurers. Gallagher Re noted that the lack of mega-round deals in Q1 led to lower overall totals, with the median average deal size clustering around $10 million. This indicated more realistic valuations and a more democratized distribution of investor capital.
The first half of 2024 continued this trend, with only one mega-round deal, contributing to an H1 2024 total of $2.186 billion, just $119 million shy of the $2.305 billion recorded in H1 2023. The increase in average deal sizes in Q2 2024, nearly doubling from $9.81 million in Q1 to $18.46 million, was highlighted by Sidecar Health’s $165 million Series D round, the quarter’s only $100 million+ mega-round deal. This made Q2 2024 the highest funding quarter since Q1 2023.
However, the deal count declined by 23.4%, from 107 in Q1 to 82 in Q2. This decline was consistent across both property and casualty (P&C) and life and health (L&H) sectors, with P&C deals dropping from 70 to 54 and L&H from 37 to 28. The quarterly deal count had not been this low since Q2 2020, which saw 74 deals. Early-stage deal sizes reached their highest level since Q1 2022, rising 77.8% quarter-on-quarter to $8.58 million. However, the number of early-stage deals fell by 21.9% to 50, the lowest since Q4 2020…
