Global investment in insurance technology (insurtech) fell to its lowest level in seven years in 2024, reflecting a sharp decline in funding activity, according to a report by Gallagher Re.
The study revealed that insurtech funding totaled $4.17 billion in 2024, with the downturn primarily driven by a significant 24.3% decline in property and casualty (P&C) insurtech investment. P&C funding dropped from $3.42 billion in 2023 to $2.59 billion in 2024. In contrast, life and health (L&H) insurtech investment experienced substantial growth, rising 53.6% year-over-year to reach $1.66 billion.
Regional Disparities in Funding Share
South Korea emerged as one of the few markets to see an increase in its share of global insurtech funding, rising by 1.21 percentage points to 1.45% from 2023 to 2024. On the other hand, Australia recorded one of the most significant declines, with its share decreasing by 1.37 percentage points to just 0.29%.
Decline in Deals and Investor Participation
The number of insurtech deals also fell sharply, declining 18.5% from 422 in 2023 to 344 in 2024, marking a six-year low. This coincided with a reduction in venture investors, which dropped from 574 in 2023 to 466 in 2024, indicating waning confidence in the sector.
Despite the overall downturn, early-stage funding saw an increase. Early-stage insurtech investment rose 8.8% year-over-year to $1.22 billion, while the average deal size grew by 14.6% to $14.67 million. Mega-round funding remained relatively stable, dipping slightly from $969 million in 2023 to $930.17 million in 2024.
Steep Decline in Fourth-Quarter Funding
The final quarter of 2024 saw a dramatic drop in global insurtech investment, plummeting 50% quarter-over-quarter to $688.24 million—the lowest level since the second quarter of 2018. P&C insurtech funding fell 43.5% to $408.38 million, while L&H insurtech investment declined 57.4% to $279.86 million.
The decline was largely attributed to smaller deal sizes, which dropped from an average of $20.90 million in Q3 to $11.10 million in Q4. Unlike the third quarter of 2024, where 55.5% of funding was directed toward mega-round deals exceeding $100 million, the fourth quarter recorded no such transactions. Early-stage insurtech funding also suffered, decreasing by 47.8% quarter-over-quarter to $193.77 million.
Notable Investments Amid Market Contraction
Despite the challenging environment, the total number of deals in Q4 2024 slightly increased to 78. Only two startups secured deals above $50 million during the quarter: India-based SarvaGram, which focuses on life and health products for rural consumers, and Players Health, a managing general agent specializing in sports-related risks.
While the insurtech sector continues to grapple with declining investments, the resilience of early-stage funding and specific market opportunities suggest that investors remain selective but engaged in areas of strategic growth.
Related topics
