Global insurtech funding totalled $US1.27 billion ($1.93 billion) in the second quarter, up 40% on the previous period to the highest level since the first three months of last year.

There were only 82 deals, down from 107 in the first quarter and the lowest quarterly count in four years, Gallagher Re says. However, average deal size almost doubled.

“There is still strong interest among companies to invest in this space,” Gallagher Re global head of insurtech Andrew Johnston said. “For this quarter at least, the tide has turned and insurtech numbers have climbed back up.”

One-third of deals involved insurtechs focused on artificial intelligence, and 40% featured risk focused start-ups.

In Australia, the quarter included Honey Insurance’s $US85.16 million ($129.56 million) raising. Honey is backed by ABN Group, AGL Energy, Anthony Eisen, Apex Capital, Gallatin Point Capital, Graham Mirabito, Jamie McPhee, Larry Diamond, Metricon, Mirvac, Peter Tonagh, PEXA, RACQ, Shadforth Financial Group and Tim Fung.

Handdii, which was founded in Australia in 2017 and is now based in California, raised $US4.57million ($6.95 million) during the quarter.

Its “three-sided marketplace”, which simplifies the claims process with a trade network spanning 38 US states, was backed by Johns Lyng Group.

Average deal size rose to $US18.46 million ($28.08 million), the highest in almost two years, according to Gallagher Re. There was only one “mega-deal” of more than $US100 million ($152.14 million) in the first half – California-based Sidecar Health. 

Analysis by Gallagher Re shows a concentration of deals around the average of $US10 million ($15.21 million), suggesting valuations are now “more realistic” and the “distribution of investor capital is more democratised”.

“We can see this trend continuing – deal-sizes are clustering around the mean,” Mr Johnston said.