Global investment in the insurtech sector throughout 2021 reached a record-high of US$15.8 billion, according to the first Global Insurtech Report by reinsurance broker Gallagher Re.
The annual capital inflow, consisting of a record 564 deals, is higher than 2020 and 2019 combined. In addition, 2021 saw record-breaking numbers for international participation, unicorn creation, initial public offerings, and single-deal size.
Approximately $9.4 billion of this was invested into property and casualty insurtechs specifically.
Gallagher Re began collecting information on global insurtech funding in 2012. Andrew Johnston, global head of insurtech at Gallagher Re, comments: “An incredible upwards trajectory of global insurtech funding has occurred during the past nine years, culminating in the record-breaking $15.8 billion total for 2021.
“By the end of 2021, an enormous $41.65 billion had been invested globally into insurtechs across 2,249 deals in 63 countries. More than half of all the investment (52 per cent) deployed during this period went into only 4.4 per cent of all insurtech deals.”
Johnston adds that “there is no slowing down for the time being”, with the report noting that the first quarter of 2022 saw a further $2.2 billion investment, including five mega-rounds.
Johnston explains that this lower number of mega-rounds, as well as higher participation in early-stage investment, is an indication that capital invested is becoming democratised — delivering a more equally distributed spread of total capital invested.
Commenting more broadly on the funding and deal data, Johnston says: “Much of the money in more recent years has been invested into companies that would not necessarily have been labelled insurtechs five years ago.
“The vast majority of new insurance projects, ventures and businesses will be heavily supported by tech. Technology will be the platform, enabler, and product that continues to keep our industry relevant and cost efficient, so the label ‘insurtech’ needs redefinition.”
Gallagher Re will produce its Global Insurtech Report on a quarterly basis throughout 2022, focusing on the theme of ‘Global trends and regional idiosyncrasies’.
The first report focuses on the Americas, including profiles on various insurtech businesses, clients and individuals in the region, as well as the most up-to-date insurtech investment data.
At year-end 2021, the US saw more insurtech investment (in terms of both cash and deal count) than the next 60 countries combined, totalling $27.2 billion through 1,237 rounds (55 per cent of all deals completed).
The report features a profile on the region’s ‘deal of the quarter’, a transaction which saw the creation of Latin America’s first unicorn, Betterfly, a digital health insurtech that automatically tracks individuals’ habits and lifestyles to reward no-cost life insurance coverage.
The inaugural Global Insurtech Report also contains a regional expert’s view, a discussion on the role of big tech, a technology spotlight on how to bring efficiency to the commercial insurance industry, and an interview with Jonathan Hendrickson, vice president and head of insurtech development at Gallagher.
Hendrickson comments: “It has been around for a number of years, but insurtech is still in the earlier innings. We have yet to see some of the full benefits of the innovation and enablement investments which have been made.
“In absolute terms, the $15.8 billion invested in 2021 is a big number, but if you look at it as a share of global venture funding, the sector is underinvested relative to its share of gross domestic product. For the insurance and brokerage industry, as we start to see some of the investments mature, I expect we will see even greater improvements in customer experience, data insights, and proactive risk management and mitigation.”
