Insurtech funding rises 8% in Q2

04-08-2022

Insurtech funding rises 8% in Q2

Global investment in the insurtech sector of $2.41 billion in Q2 2022 was 8.3% greater than the total in Q1, but still 50.2% below 2021’s record-breaking second quarter, according to the latest quarterly Global Insurtech Report from reinsurance broker Gallagher Re.

The average deal size was up 18.3% to $22.11 million over Q1, which masks a 7.7% fall in total deal numbers.

The quarter saw 132 insurtech deals, compared to 143 in Q1. The lower Q2 number includes six “mega-rounds”, including four in the US, which raised $948 million in total.

Q2 saw 40 L&H investments of $918 million, up 12.4%, and 92 P&C insurtech deals worth $1.49 billion in total. P&C deal flow was down 13.2%, but total investment was up 5.9% on Q1, while average deal size was $20.73 million. The early-stage insurtech funding of $368 million in Q2 represented a decline of 44.4%% compared to Q1, and a drop of 26.1% year on year.

An about-average 45.5% of deals benefited US-based insurtechs, but UK ventures saw a big increase–representing 12.1% of total global deals in Q2 2022, up four points. Re/insurers made 28 of the Q2 investments, five fewer than the previous quarter. Their Series A investments comprised almost a third of re/insurer deals, the highest since Q2, 2020, driven by strategic investments announced as partnerships.

Andrew Johnston, global head of insurtech at Gallagher Re, said: “Global markets have struggled since the beginning of the year, with even the most robust stock valuations taking a beating. Insurtechs which are set to deliver growth and profitability over the long-term now present confident investors with an excellent opportunity to diversify their portfolios. A number of them will undoubtedly change the face of our industry, or parts of it, and in some cases are already doing so. As markets begin to recover, those insurtechs should rise to the surface with the utmost buoyancy.

The quarterly series of Gallagher Re Global Insurtech Reports in 2022 focus on specific geographies. The Q2 2022 report covers Europe, the Middle East and Africa, and opens with a ‘snapshot’ of insurtech in the region.

In the past decade, EMEA insurtech has “exploded”, according to the report, with 41 countries in the region now home to funded insurtechs, more than any other. By the end of June 2022, the 701 deals completed in EMEA accounted for roughly 28% of all deals ever completed, and were worth $8.5 billion in total. Although, in the most recent quarter, EMEA had only one of six mega-round deals.

Insurtech, Gallagher Re

Bermuda Re