Biggest InsurTech Startups describes startups that are valued at more than $1 bn. Global insurtech funding is expected to expand at a compound annual growth rate (CAGR) of 51.7% from 2023 to 2030, according to Beinsure Media.
The global insurtech market remains robust — particularly for late-stage startups — despite a marked decrease in funding.
Global InsurTech funding fell to USD912.25 million in Q1’2024, the lowest since Q1’2020. The industry saw no quarterly USD100 million+ mega-round deals for the first time since Q3’2017. Property & Casualty InsurTechs raised USD605.58 million in Q1’2024, a low not seen since Q3’2018. Early-stage InsurTech funding increased 26.5% quarter on quarter, countering the broader InsurTech funding picture.
Global InsurTech funding dipped below USD1B in Q1’2024, falling from USD1.103B in Q4’2023 to USD912.25M in Q1’2024. The decrease was largely attributable to an absence of USD100M+ mega-round InsurTech deals for the first time since Q3’2017.
The average deal size experienced a significant reduction of 30.6%, decreasing from USD 14.14 million in the fourth quarter of 2023 to USD 9.81 million in the first quarter of 2024.
This marks the first time since the third quarter of 2017 that the average global InsurTech deal size has fallen below USD 10 million.
The integration of InsurTech startups with traditional insurance companies represents a pivotal evolution in the insurance industry. “These collaborations harness the innovative capabilities of InsurTechs to enhance, streamline, and revolutionize the traditional models of insurance, from policy creation and risk assessment to customer engagement and claims processing”, says Oleg Parashchak, CEO Finance Media Holding.
This convergence is not merely a trend but a strategic move towards digitization that offers significant benefits to insurers, startups, and policyholders alike.
The rising number of insurance claims globally drives market growth. Auto, life, and home insurance claims remain the most common. Despite smaller average check sizes and a drop in mega-round funding, Johnson remains optimistic.
InsurTech startups, known for their agility, innovative tech, and customer focus, invigorate the traditional insurance sector, notes Beinsure Media. They use technologies like AI, blockchain, IoT, and big data analytics to enhance efficiency, customize insurance products, and improve risk management.
These technologies create new insurance models, such as on-demand and usage-based insurance, meeting the evolving needs of modern consumers.
In the first quarter of 2024, InsurTech deal activity rose by 7% from the previous quarter, with transactions increasing from 100 to 107. This growth continues a trend noted in earlier reports, where interest in the sector remains strong, although the average investment per deal is decreasing.
Although deal counts and funding were lower, transactions remained steady in 2023, indicating a healthy market. While 2021 marked the peak of the market, referred to as the ‘Great Experiment,’ 2023-2024 signals a new phase of sustained investor behavior changes, according to Beinsure Media.
The average deal size in this category reached its lowest point since the first quarter of 2018 at USD 10.09 million, and the total number of deals decreased to 70, a reduction of six deals from the previous quarter.
This decrease primarily resulted from fewer transactions in the categories of lead generation, brokerage, and managing general agents (MGA).
Funding for Life & Health (L&H) InsurTech remained relatively stable, decreasing only slightly by 4.7% to USD 306.67 million.For traditional insurers, partnering with InsurTech startups offers a way to achieve digital transformation without developing solutions from scratch. This partnership allows access to advanced analytics for better risk assessment and pricing, process automation for operational efficiency, and improved customer experiences through intuitive digital interfaces and personalized services.
