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Global insurtech investment hits record $2.55bn in Q1: WTW

28th April 2021 - Author: Matt Sheehan

New data from re/insurance broker Willis Towers Watson (WTW) shows that global investment in the insurtech sector reached a new quarterly high of $2.55 billion during the first quarter of 2021.

Fintech image via George Washington UniversityThis included eight so-called ‘mega-rounds’, which was more than in any other three-month period, analysts found, and which accounted for more than $1.13 billion of the funding.

Total funding during the quarter grew by 180% when compared with Q1 2020, which suffered a deep decline due to fears surrounding COVID-19.

The latest total also grew by 22% relative to more comparable Q4 2020, while the number of discrete deals soared 42% higher than during the previous quarter.

According to WTW’s findings, investment was driven primarily by property and casualty (P&C) focused companies, which represented 69% of deal share.

RMS

The largest funding rounds included Next Insurance, Coalition, Zego, Sidecar Health, Pie Insurance, Clarify Health, Corvus Insurance Agency, and TypTap.

But at the same time, there was a 13 percentage-point increase in early-stage deals compared to Q4 2020, with 60% of investments in Q1 2021 representing Series A or B fundraisings.

Additionally, WTW reported that Q1 was the most geographically diverse set of early-stage start-ups in a single quarter, representing 24 countries including Bangladesh, Estonia, Brazil, Nigeria, and U.A.E.

“The record level of activity this quarter reflects our industry’s ever more widespread willingness to engage and adopt technology, which continues to grow at an unprecedented rate,” said Andrew Johnston, global head of InsurTech at Willis Re.

“Technological innovation gains ground only when a community emerges to support it, and COVID-19, more than any other factor, has rapidly accelerated the change that was already well under way. COVID-19 has helped strengthen the narrative, and demonstrably illustrate the results technology can deliver, which are now being achieved at scale,” Johnston continued.

“That said, the solutions offered by InsurTechs must make intellectual and commercial sense to their target users, whether they’re insurers, brokers, or insurance buyers. For them, the technology itself is the least interesting part of the initiatives. Unfortunately, a failure to understand these realities, in addition to the general difficulty of entering our industry as a nascent business, means that many InsurTechs will most likely never achieve the grandeur of their aspirations.”

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