The growth, representing a notable 19.8% increase, was fuelled by a remarkable 25.5% surge in property and casualty (P&C) insurtech investments.
According to Gallagher Re’s latest Global Insurtech Report, this surge occurred despite a 16.4% drop in the average deal size, hitting a six-year low at US$10.3 million. In contrast, life and health insurtech investments faced a 4.5% decrease, amounting to $166.6 million.
The report highlights a rise in the number of quarterly insurtech deals, jumping from 97 in Q2 to 119 in Q3—a notable achievement, marking the highest count since Q3 2022 (140). P&C insurtech dominated with 90 deals, while life and health insurtech recorded 29 deals. Interestingly, US-based insurtechs claimed 55.4% of the global insurtech deal share in Q3 2023, reaching the highest level since Q1 2020.
Early-stage insurtech funding experienced a substantial 24.7% quarter-on-quarter increase, reaching US$269.45 million, accompanied by a surge in early-stage deals from 51 in Q2 to 71 in Q3. However, mid-stage Series B and C funding hit its lowest total since 2014, with an average of US$24 million. Companies falling into this category raised $323.36 million, constituting 29.5% of total insurtech funding across 18 deals in Q3.
The quarter witnessed two notable mega-round investments, with both Boston-based homeowners’ insurance platform Openly and San Francisco cyber platform Resilience securing $100 million in Series D rounds.
In terms of (re)insurers’ involvement, the report reveals that 34 insurtech investments were made in the quarter, predominantly concentrated in the early-stage category (61.8%). Q3 saw 10 seed/angel-stage investments and 11 Series A investments by trade players. MassMutual Ventures led the activity with seven investments, followed by Avanta Ventures (part of CSAA), MS&AD Ventures, and Munich Re Ventures, each making three or more investments.
Dr Andrew Johnston, Gallagher Re global head of insurtech, said: “We continue to move through a crucial inflection point of global insurtech, from phase one, the ‘great experiment’ to phase two focused on sustainable, profitable business outcomes through precision, not volume.”
He added:”The third quarter provided us with some very thought-provoking examples of what this change looks like at an individual company level, for both insurtechs and investors.”
Top 5 Insurtech Capital Raises in October 2023
NEXT Insurance: US$265 million
bolttech: US$246 million
wefox: US$55 million
Agentsync: US$50 million
Onsurity: US$24 million