Gallagher Re, a global reinsurance brokerage and analytics firm, reports that worldwide InsurTech funding continued at a relatively high level in the first quarter of 2026, as outlined in its latest Global InsurTech Report.
The firm recorded total investment of USD 1.63 billion for the quarter. While marginally below the USD 1.67 billion seen in Q4 2025, Gallagher Re indicates that these back-to-back quarters represent the strongest funding activity since Q3 2022, suggesting a sustained improvement in investor appetite across the sector.
According to Gallagher Re, AI-labelled InsurTech companies accounted for the overwhelming majority of capital deployed during the period. These firms secured 95.2% of total funding, the highest proportion recorded to date.
Gallagher Re states that AI-focused businesses raised USD 1.55 billion across 68 transactions, with an average deal size of USD 25.79 million, exceeding the overall InsurTech average. The firm also notes that each of the ten largest funding rounds in Q1 2026 involved companies with an AI focus.
Gallagher Re identifies several notable shifts within the quarter’s funding activity. Early-stage investment rose significantly, increasing by 36.1% compared with the previous quarter to reach USD 548.50 million, marking the highest level since Q3 2022.
The average size of early-stage deals also expanded considerably, rising 278.8% year-on-year to USD 14.06 million. In addition, Gallagher Re reports that Life and Health InsurTech funding nearly doubled quarter-on-quarter to USD 718.99 million, supported by a number of larger deals. In contrast, Property and Casualty InsurTech funding declined by 31% over the same period to USD 907.14 million, although the average deal size remained consistent at USD 20.2 million.
Andrew Johnston, Global Head of InsurTech at Gallagher Re, commented: “Q4 2025 and Q1 2026 ranked as the highest for global InsurTech funding since Q3 2022 — bucking the now three-year trend of quarterly funding of around USD 1 billion.
“This provides further evidence that there is a return of capital into this space — and strikingly, 95.2% of Q1 2026 InsurTech funding went to AI-labelled companies, underscoring the industry’s commitment to this transformative technology.”
Gallagher Re further observes that the distinction between AI and InsurTech is becoming less pronounced, with most new companies and solutions positioning themselves as AI-enabled. Since 2012, businesses focused on digital and cyber risk have collectively raised USD 5.77 billion across 263 deals. In Q1 2026 alone, Gallagher Re notes that InsurTechs linked to AI liability and cyber insurance attracted USD 444.84 million in funding.
Johnston added: “AI and InsurTech are now almost synonymous. As an industry, we must embrace the opportunities AI presents while addressing the challenges it brings. The future of AI liability insurance isn’t coming; it’s already here, and it’s up to us to lead the way.”
Gallagher Re explains that this latest report marks the beginning of the final year in its three-year series examining AI within the InsurTech sector. While previous editions in 2024 and 2025 considered AI applications across the insurance value chain and their impact on core business lines, the 2026 series turns its attention to future developments. Gallagher Re states that this includes a focus on AI liability insurance and its connection to the evolving cyber insurance market.
The firm describes AI liability insurance as a form of protection intended to cover financial losses resulting from the use of AI systems, particularly in areas such as healthcare, financial services and autonomous vehicles.
Gallagher Re highlights that increasing adoption is expected to drive demand for this type of specialised cover. Organisations deploying AI face a range of distinct risks, including algorithmic bias, data quality concerns and liability arising from automated decisions. Gallagher Re notes that these challenges are prompting insurers to develop new products, endorsements and exclusions tailored to AI-related exposures.
Freddie Scarratt, Global Deputy Head of InsurTech at Gallagher Re, said: “The speed of AI’s evolution is extraordinary, but it brings new risks alongside opportunities. The emerging landscape of third-party AI liability insurance is not just an interesting sideline; it’s a fast-growing necessity, poised to mirror the explosive growth we’ve witnessed in the cyber reinsurance market. The silent risk of AI is becoming audible, and ignoring it is no longer an option.”
Looking ahead, Gallagher Re states that the insurance and reinsurance market will need to respond to the implications of AI. The firm suggests that insurers should enhance data governance practices, ensure continuous evaluation and monitoring of AI systems, and design targeted solutions to address emerging risks.
Gallagher Re expects AI liability insurance to develop along a similar path to cyber insurance, gradually moving from exclusions and endorsements towards more specialised, standalone policies as the market matures.
