Global insurtech funding balloons to record 210% in one year: WTW

Global insurtech funding was "astronomically high" in the first half of 2021, even exceeding the total full-year investment of 2020, and the major driver of this increase was the growth in "mega-rounds", according to a new report by re/insurance broker  Willis Towers Watson.

In the first half of the year, insurtechs have raised $7.4 billion – surpassing the $7.1 billion raised for all of 2020 by more than $300 million. The overall deal activity grew to 162 deals, up 11 percent compared with last quarter, largely driven by 15 mega-rounds of $100 million or more.

In the second quarter of 2021, the investment in the insurtech sector ballooned to over $4.8 billion, representing an 89 percent increase from Q1  and a 210 percent increase over Q2, 2020.

WTW report noted that the money was raised predominantly by later-stage players seeking expansion with Series B and C fundraisings driving a large number of deals in the second quarter, but the number of early-stage deals also increased.

Early-stage deals were up by more than 9 percent from the previous quarter, and 200 percent from pandemic-stricken Q2, 2020. As a percentage of overall deals, early stage activity held roughly steady, at 57 percent.

Insurtechs focused on distribution accounted for 55 percent of start-up deals, and for 10 of the 15 mega-rounds, said WTW. Of all Q2 deals, 73 percent were for P&C-related insurtechs, while 43 companies raised funds for L&H technology.

Funds were raised by companies from 35 countries, including new entrants Botswana, Mali, Romania, Saudi Arabia, and Turkey.

Andrew Johnston, global head of insurtech at Willis Re, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviors. Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition.

"Those that use it to redefine service in the insurance world will thrive. That means a positive future for InsurTechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.