Global insurtech activity reached an all-time high in the second quarter of the year. Insurtechs raised $4.8 billion in 162 deals, an increase of 89% in funding and 11% in deals from the first quarter of the year, according to
The first half of 2021 has seen companies raise $7.4 billion, surpassing the funds raised last year at this time by over $300 million.
“From a product, service, distribution and underlying risk perspective, we--as a society and as an industry--are moving at an unprecedented speed to match expectations with reality, largely powered by harnessed appropriate technology and digital strategy,” writes Dr. Andrew Johnston, Global Head of Willis Re InsurTech. “As our lives are changing at a micro level, a collective society at a macro level demands an insurance community to support its changing behavior. With so much retail choice, those (re)insurance providers that fail to respond to the changes that the back-to-the-future model are creating will fall away over time.”
There were 15 funding rounds above $100 million, which is the likely reason for the overall growth, according to the report. Eight of the mega-rounds included U.S.-based companies, which made up about 38% of the deals, a 10 percentage point drop from the first quarter and down from a peak of 57% last year. The share of early-stage deals also decreased by one percentage point to 57%. Mid-stage deals were up by 17% from the first quarter and made up 23% of the funding.
The report also highlights that this is the most geographically diverse round since the start of recording, with insurtechs from 35 different countries securing investments, up from the 26 in Q1.
“The future of the global economy remains uncertain, as the pandemic, climate change, increased catastrophic events and other systemic events continue against the backdrop of these volatile markets,” Johnston writes. “These events have begun to force the (re) insurance market away from over a decade of “soft”(er) conditions to a situation that will be a lot less forgiving for new risk-originating entrants (technologically-enabled or not).”
