PriyaPatel
TLDR:
- Global insurtech funding dropped below $1 billion in Q1 2024
- Early-stage insurtech funding saw a 26.5% increase quarter-on-quarter
In the ever-evolving landscape of insurtech investment, Gallagher Re’s Global Insurtech Report highlighted a shift towards more sustainable practices in the industry. With a decrease in overall funding but an increase in early-stage funding, the focus is now on profitability, robust business models, and realistic valuations. Companies are moving away from the previous mindset of ‘growth at all costs’ and towards steady, self-sustaining growth.
According to VP of Marketing at Genasys, Ed Halsey, the key to success in the insurtech sector lies in patience, deep subject matter expertise, and a focus on developing world-class products. Insurtech businesses are now expected to bootstrap for longer, demonstrate significant viability, and prioritize creating a sustainable future over chasing inflated valuations.
Several factors, including economic challenges and over-investment, have led to the current state of the insurtech funding environment. Halsey warns that businesses with unrealistic valuations may face struggles in the near future, prompting a shift towards a more profit-focused mindset. The industry is urged to prioritize customer satisfaction, operational efficiency, and long-term profitability over short-term gains.
Looking ahead, Halsey sees current insurtech leaders paving the way for the sector’s future. Key themes like cloud, connectivity, and artificial intelligence will continue to shape the insurtech space, with technology playing a crucial role in driving innovation. The democratization of tech through low-code and no-code solutions will empower insurance businesses to embrace insurtech practices and usher in a new era of possibilities.
