Cyber insurtechs are well positioned to shrug off any slowdown in fundraising in the global insurtech sector after a record-setting year, a report from S&P Global says.

Cyber insurtech startups drew big valuations in 2021, benefiting as incumbents lack the same advantage in cyber as other sectors and as they offer new and differentiated products to those legacy carriers provide.

"I don't see the legacy carriers starting to provide the advanced cyber threat and mitigation services that has helped differentiate this segment from their legacy competitors," Insurtech Advisors Managing Partner Kaenan Hertz said.

S&P says after setting records in both fundraising and valuations, global insurtechs may find 2021 "difficult to replicate” amid rising interest rates and the struggles at publicly traded insurtechs in the US, where insurtechs raised about $US3.58 billion ($5.02 billion) from issuances of common equity, preferred securities and senior debt, according to an S&P Global Market Intelligence analysis.

Funding could face an “uphill climb” in 2022, S&P says, as bond yields improve, the Federal Reserve signals it will raise interest rates multiple times, and after the shares of publicly listed insurtech companies plummeted in the last year.

“Even Lemonade Inc., which bucked the trend and soared through the end of 2020, had a brutal 2021,” S&P said.

Mr Hertz said insurtech funding in 2021 reminded him of the late dot-com era, when tech stocks dived after years of massive gains. Few startups were in a position to pivot, but those that did ended up surviving, and the same will happen with insurtechs, he said.

High-growth insurtechs that demonstrate a sustainable business model will be rewarded with high valuation as the froth comes off insurtech valuations and markets become more discerning, the report said.