Global investment in the InsurTech sector reached a record during H1 2021, as half-year funding of $7.4 billion exceeded full-year investment in 2020, and in every other year, according to a new report by insurance and reinsurance broker, Willis Towers Watson (WTW).
In Q2 2021, 162 deals yielded more than $4.8 billion in investment, which represents a 210% increase over the prior year period and growth of 89% from the amount witnessed in Q1 2021.
Combined with Q1 2021, investment in the InsurTech arena has reached a huge $7.4 billion at the half-way stage of the year, which is already above the $7.1 billion recorded for the whole of last year.
WTW’s latest Quarterly InsurTech Briefing shows that, the quarterly total was driven mostly by 15 mega-rounds of $100 million or more.
Together, these deals reached an impressive $3.3 billion, or two-thirds of total funding during the quarter. The money was raised predominantly by later-stage players seeking expansion, notes the broker.
At the same time, Series B and C fundraising drove the large number of deals in the second quarter, while the number of early-stage deals also increased in the period.
Funding went up by more than 9% compared to the previous quarter and as a percentage of overall deals, early stage activity held steady at 57%.
InsurTechs focused on distribution accounted for 55% of start-up deals, and for 10 of the 15 mega-rounds, shows the report. Most of the distribution InsurTechs target reduced dependence on agent channels.
73% of all second-quarter deals were for property and casualty (P&C)-related InsurTechs, while 43 companies raised funds for Life and Health (L&H) technology. Funds were raised by companies from 35 countries, including new entrants Botswana, Mali, Romania, Saudi Arabia, and Turkey.
Dr. Andrew Johnston, global head of InsurTech at Willis Re, the reinsurance broking arm of WTW, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours.
“Consumers and businesses increasingly expect insurance to be delivered when and how they want it, and risk carriers that fail to respond will fall away over time.
“To embrace technology is a minimum survival condition. Those that use it to redefine service in the insurance world will thrive. That means a positive future for InsurTechs that bring a truly differentiated business approach to our industry. Some of them will create untold long-term opportunities for themselves and the insurance sector.”