Global insurtech funding rose 38% to $US1.39 billion ($2.06 billion) in the first quarter from the previous three months, and trends suggest this year may mark a return to the ­gently rising insurtech funding seen before 2021, Gallagher Re says. 

Average deal size grew by a quarter and deal count was steady during January-March, according to the latest Global InsurTech Report from Gallagher Re. 

Mega-round funding accounted for only 13% of the total, the lowest in three years. The majority of investment by insurers went to early-stage rounds, a trend now observed for six consecutive quarters.  

Property & Casualty insurtech funding drove the quarterly investment increase, surging 53%. Average early-stage deal size was up 28% at $US8.31 million ($12.3 million).  

Global Head of Insurtech Andrew Johnston says “2023 may be the beginning of a new era for insurtech”. 

"2021 undoubtedly marked the funding peak. The sector came back down to earth in 2022,” he said. 

“Founders are now thinking about long-term sustainability and growth, and realising their businesses will need to pull the plough themselves, reliant on their own capabilities and revenues.” 

There is a “genuine willingness” among insurers, brokers and agents to adopt technology, he says, and the "pressure is therefore on insurtechs to make their businesses palatable and value-adding”. 

The quarter included a $US2.5 million raise by Melbourne-based Koba Insurance, which attracted backing from Birchal, Ensurance, Hunter Equity Group, Insurtech Gateway Australia, and undisclosed investors. 

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