Insurtech investment broke records in 2021 – Gallagher Re

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Global investment in insurtech breached $15.8bn in 2021, according to Gallagher Re’s Global Insurtech Report.

The figure, said Gallagher Re, was the highest on record and more than 2019 and 2020 combined.

The firm said that over the course of 2021, some $9.4bn was invested into Property & Casualty InsurTechs, with the balance of $6.4bn – about 40.5% of the total, following a huge uptick in Q4 – directed into Life & Health companies. The rise in total funding in the final quarter of last year was driven by 13 ‘mega-round’ deals. They accounted for 71% of the $5.3bn invested during that period. Alongside these, 2021 Q4 was also – until the most recent first quarter of 2022 – the largest-ever for Seed, Angel, and Series A funding rounds, which totalled $635m.

Dr Andrew Johnston, global head of InsurTech at Gallagher Re, said: “An incredible upwards trajectory of global InsurTech funding has occurred during the past nine years, after we started tracking it in 2012, culminating in the record-breaking $15.8bn total for 2021. By the end of 2021, an enormous $41.65bn had been invested globally into InsurTechs across 2,249 deals in 63 countries. It included 99 mega-round deals, which accounted for $21.88bn of the total. Therefore, more than half of all the investment (52%) deployed during this period went into only 4.4% of all InsurTech deals.”

He added: “InsurTech investment growth over the past decade has been incredibly impressive, and there’s no slowing down for the time being, with the first quarter of 2022 recording $2.2bn worldwide. While ‘only’ 43% of the total global investment recorded when compared with the prior quarter [2021 Q4], 2022 Q1 saw parity between quarters in terms of total deal flow [deal count], with a very impressive 143 deals recorded.”

Gallagher Re’s latest report opens with a snapshot of the region’s InsurTech landscape. It notes that at year-end 2021, the United States had seen more InsurTech investment – both in terms of cash and deal count – than the next 60 countries combined. Up until the end of 2021, the region had hosted 54.62% of all deals completed, raising $27.2bn through 1,237 rounds, of which $26.5bn was raised by US companies. The report also focuses on the most recent quarterly investment statistics for the region.

The April Report also includes case studies of the InsurTechs Root, a full-stack, risk-bearing personal lines insurance company; Mexico’s Zenda.la, a digital health insurance MGA in partnership with Swiss Re and Prevem Seguros; and Foxquilt, which develops, underwrites, and distributes its own commercial insurance products in the US and Canada with the backing of Munich Re.

The Report’s ‘Deal of the Quarter’ explores the transaction that made Latin America’s first unicorn, Betterfly. The digital health InsurTech automatically tracks individuals’ good habits and rewards them with no-cost life insurance coverage. The ‘Regional Expert’s View’ section contains an article by Manuel Almenara, vice president of strategic partnerships at Swiss Re and co-founder of Peruvian InsurTech Hello ZUM; and a discussion with Nigel Walsh, managing director at Google Cloud, features in ‘The Role of Big Tech’.

Johnston said that funding had been directed towards companies that a few years ago would not have been considered as insurtech firms.

He added: “Since almost all new ideas and entrants now have a technological angle, it becomes harder to separate the two. If we were to look back at every single insurance-sector investment since technology was first truly yoked, and reclassified the investment data to the current broader use of the term, InsurTech investment’s recent worldwide growth trajectory might look a little less impressive and stark. 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.”