Global investment in the insurance technology sector totalled US$7.4 billion in the first half of 2021, setting an all-time high and exceeding full-year investment in 2020 and in all previous years, according to a report by Willis Towers Watson (WTW).
The second quarter saw 162 deals yield more than $4.88 billion in investment, a 210% increase over the same period last year and 89% from the previous quarter, according to WTW’s Quarterly InsurTech Briefing. This was largely driven by 15 mega-rounds of $100 million or more, representing $3.3 billion combined. Most of these funds were raised by later-stage players seeking expansion.
While Series B and C rounds were the major contributors to the quarterly total, the number of early-stage deals also increased. It increased by over 9% from the previous quarter, and 200% from pandemic-stricken Q2 2020. As a percentage of overall deals, early stage activity was mostly steady, at 57%.
Distribution-focused insurtechs made up the majority (55%) of start-up deals and 10 out of the 15 mega-rounds. Property & casualty insurtechs also dominated the deals for the second quarter with 73%.
Investors came from 35 countries globally, including several new entrants from Botswana, Mali, Romania, Saudi Arabia and Turkey.
“As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours,” said Dr Andrew Johnston, global head of insurtech at Willis Re.
“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.”