Global insurtech funding underwent a slump in the last three months as it decreased 7.9% quarter over quarter to US$1.01 billion in the third quarter, according to Gallagher Re’s latest report.
The decline was primarily attributed to the life and health (L&H) insurtech segment, which saw funding fall 56.8% to US$314.75 million.
Nearly a third of L&H insurtech funding in the quarter was directed to Employee Navigator, an employee benefits platform that secured the only US$100 million-plus mega-round deal for the period.
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In contrast, property and casualty (P&C) Insurtech funding rose 90.5% from a seven-year low in the previous quarter, reaching US$690.28 million in Q3 2025. Eight of the ten largest deals by funding amount were raised by P&C insurtechs, with four companies each securing deals of US$50 million or more.
The average deal size increased from US$12.83 million in Q2 2025 to US$15.70 million in Q3 2025, a change driven mainly by a decline in the total number of deals. Insurtech recorded just 76 deals in the third quarter, the lowest count since Q2 2020. This drop in deal count coincided with a broader decline in the number of active Insurtech investors, which fell to 186, the lowest since Q4 2017.
The reduction in deal activity was most pronounced in the L&H insurtech sector, which saw only 18 deals, the fewest since Q3 2018. The P&C Insurtech segment experienced a smaller decrease, with deal count ticking down from 59 to 58 quarter over quarter.
Seed-stage insurtech deals were limited, with the count falling from 26 to 17, marking the lowest level since Q2 2020. Despite this, early-stage Insurtech dealmaking showed mixed results, as the Series A deal count rose to a seven-quarter high of 22.
Early-stage insurtech funding increased 6.8% quarter over quarter, reaching US$277.65 million in Q3 2025. This marks the second consecutive quarter of growth for early-stage funding, with average deal size among early-stage insurtechs hitting a four-quarter high of US$8.17 million. L&H insurtech raised US$114.63 million in early-stage funding across just nine deals.
AI-centered insurtechs accounted for 74.8% of total Q3 2025 funding, raising US$751.72 million across 49 deals. The average deal size for AI-centered companies was US$16.70 million, slightly above the overall average for the quarter. Early-stage companies represented 29 of the 49 AI-centered Insurtech deals, including platforms such as Elysian and Penguin Ai.
Previously, Gallagher Re’s previous report noted that of the total insurtech investment since 2012, roughly 25% - about US$15 billion – has been directed toward artificial intelligence (AI) technologies.
Commercial-focused insurtechs raised US$470.67 million in Q3 2025, with five of the top ten deals by funding going to this segment. Since 2012, commercial-focused insurtechs have raised US$9.76 billion across 569 deals. Of the 76 Insurtech deals in the third quarter, 37 were commercial-focused.
Re/insurance companies participated in 51 tech investments in Q3 2025, a record high. These rounds surged from 31 in the previous quarter, with 43.1% of the deals at the early stage. MS&AD Holdings led dealmaking activity, investing in ten tech companies through its venture capital entities.
