Startups using technology to shake up the insurance industry have generally failed to deliver for investors buying publicly traded shares.
Now, private investors appear to be cooling on so-called insurtech, which forms part of the broader fintech, or financial technology, sector. A new report by reinsurance broker Gallagher Re found:
- Global funding for insurtechs fell to $4.5 billion last year, down 44% from 2022.
- The tally of insurtech deals dropped to 422, from 521 a year earlier.
- The slump echoes a wider fall in funding for startups, as higher interest rates have prompted investors to look for returns elsewhere.
Despite the falloff in funding, the consistent flow of insurtech deals last year was a sign of a “mature and healthy market,” said Andrew Johnston, Gallagher Re’s global head of insurtech.