Global Insurtech investment hit $1.56 billion during the second quarter of 2020, an increase of 71% compared to Q1, according to Willis Towers Watson.
2020’s first quarter was heavily influenced by the uncertainty surrounding COVID-19.
WTW says the increase in Q2 was driven in part by later-stage investments, including four ‘mega-rounds’ in excess of $100 million.
Despite deal count actually being down 23%, Q2 saw many large individual as investors continued to turn away from Seed and Angel deals in favour of support for more mature ventures.
P&C sector investments counted for 68% of funding, but the share of L&H sector investments was up 17 points to 32%, as the pandemic crisis continues to compound the value of technology, and particularly telehealth, in the segment.
Also notable was the initial public offering of Lemonade and the acquisition of two incumbent insurance companies by insurtechs, Hippo and Buckle.
WTW notes how deals were struck in a record-breaking 25 countries, including newcomers such as Taiwan, Croatia, and Hungary. Seed and Series A financing hit a record low, at just 42% of deals.
Series A deals were flat, but Series C deals accounted for 11% of deals, up from 6% the previous quarter.
Distribution-focused start-ups saw an 11-point rise in deal share, while B2B companies reduced their share by nine points. New re/insurer partnerships reached a record high of 34 deals, up four from Q1 2020.
“While InsurTech investment clearly rebounded in Q2, and the trend towards greater commitments to later-stage fundraisings continues, we should be cautious and not read too much into the general state of the global InsurTech market based on this quarter alone,” said Dr Andrew Johnston, global head of InsurTech at Willis Re.
“In the short term, investment confidence will test the status quo, especially for highly leveraged InsurTechs.
“Similarly, certain risks and their associated vectors have changed fundamentally and so the impact of that is yet to be truly felt. It is quite possible that we will observe a general slowing down of InsurTech activity as a result.”
