As per a new report from Gallagher Re, the InsurTech industry experienced a 90% surge in funding during Q1 2025, reaching $1.31 billion.
According to Gallagher Re, around 61.2% ($710.86 million) of Q1 2025 InsurTech deals went to AI-centred companies, while five re/insurance investors made three or more tech investments in the opening quarter.
The report also found that Q1 2025 was only the second quarter since Q4 2022 to see three or more $100 million+ mega-round deals, all of which went to P&C InsurTechs.
In fact, P&C InsurTechs raised $1.13 billion in funding during Q1 2025, the highest level since Q3 2022.
Average InsurTech deal sizes also reportedly increased with the broader funding surge, rising 42.1% quarter on quarter to $15.77 million.
“The increase was primarily attributable to the rise in deals to B2B (i.e. tech vendor) P&C InsurTechs, from 26 in Q4 2024 to 43 this quarter,” Gallagher Re explained.
B2B InsurTechs are said to have raised 61.4% of all P&C deals, the highest level in more than a decade, and 85.2% of all L&H deals, the highest on record.
Looking at Gallagher Re’s findings on geography, the US saw its global InsurTech deal share rise 8.8 percentage points to 58.8%, quarter on quarter, in Q1 2025, the highest since Q3 2017.
Elsewhere, funding to L&H InsurTechs declined 34.6% quarter on quarter to $183.14 million in Q1 2025, while early-stage InsurTech funding fell 11.9% to a nearly five-year low.
Andrew Johnston, Global Head of InsurTech at Gallagher Re, commented, “Perhaps we are in more than an InsurTech spring, and in fact at the foothills of a longer-standing trend of sustainable adoption of technology into our industry from an InsurTech cohort.
“M&A activity is up, AI funding is now a significant part of overall InsurTech funding, and 2024 marked a record high for re/insurer investing – so the future of InsurTech is certainly looking brighter than it was 24 months ago.
“As we look forward, we are also seeing rapidly growing interest in aspects of climate finance. Some InsurTechs are pioneering carbon credit insurance, with Artio Carbon making headlines after launching an early-stage carbon insurance offering backed by major insurers.
“Those InsurTechs focusing on providing technology, data and insurance solutions for AI liability products are also catching the eye.”
