Global insurtech investment reached US$1.31 billion in the first quarter of 2025, according to the latest Gallagher Re InsurTech report.
The figure marks the highest quarterly total since the third quarter of 2022 and was largely driven by a resurgence in property and casualty (P&C) insurtech funding.
P&C insurtechs raised US$1.13 billion during the quarter, while early-stage insurtech funding dropped 11.9% quarter over quarter to US$170.79 million – the lowest figure for that segment in nearly five years.
AI-focused companies accounted for 61.2% of total insurtech funding in Q1 2025, with US$710.86 million in deal value. Five (re)insurance investors made at least three investments in tech ventures during the quarter.
The period also saw three funding rounds of over US$100 million, all in the P&C space: Quantexa secured US$175 million, Openly raised US$123 million, and Instabase obtained US$100 million. It was only the second time since the fourth quarter of 2022 that three or more US$100 million-plus deals occurred in a single quarter.
Average deal size rose 42.1% from the previous quarter to US$15.77 million, driven largely by increased activity among business-to-business (B2B) P&C technology vendors. The number of B2B P&C insurtech deals climbed from 26 in Q4 2024 to 43 in Q1 2025.
B2B insurtechs accounted for 61.4% of all P&C deals – the highest proportion recorded in more than a decade – and 85.2% of all life and health (L&H) deals, marking a record high.
The United States saw its share of global insurtech deals increase 8.8 percentage points to 58.8%, the highest since Q3 2017. Meanwhile, funding for L&H insurtechs declined by 34.6% from the prior quarter to US$183.14 million.
Previously, Gallagher Re reported that global insurtech funding in 2024 reached approximately US$4.25 billion, reflecting a 5.6% decrease from the previous year's US$4.51 billion.
This downturn was particularly evident in the fourth quarter, where funding dropped by 50% quarter-over-quarter to US$688 million. Despite this, early-stage funding and average deal sizes showed resilience, indicating sustained investor interest in nascent ventures
Andrew Johnston, global head of insurtech at Gallagher Re, commented on the market’s current trajectory, referencing a potential shift toward more sustained integration of technology in the insurance industry.
“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,” Johnston said.
What are your thoughts on this story? Please feel free to share your comments below.
