Global insurtech funding $1.1B in Q3: Gallagher Re

Global insurtech funding increased by nearly 20% and early-stage insurtech funding increased quarter over quarter from $216 million to $269 million, according to Gallagher Re, which released its Global Insurtech Report for Q3 2023. 

While funding has increased, the average deal size dipped in the third quarter to a six-year low. 

The report is a collaboration between Gallagher Re, Gallagher and CB Insights. 

"With our industry under so much existential pressure, now more than ever technology and new entrants can play a critical role in preserving and fortifying the value of reinsurance," the report states. 

This year has the highest number of reinsurer investment deals with 73 transactions. In 2021 there were only 40 deals. The trend could suggest that insurance carriers are seeing more opportunities in insurtech investments.

There were 119 deals in the third quarter this year, a bounce back from the previous 97 deals in the second quarter. The increase is attributed to property & casualty insurtech funding specifically, which saw about a 25% increase in funding quarter over quarter.  

The report highlights the insurance carriers that led corporate venture activity in the third quarter including MassMutual Ventures, which made seven investments. Avanta Ventures, MS&AD Ventures and Munich Re Ventures, which all made three or more investments. 

The U.S. continues to lead mid-stage expansion rounds with 80 deals equaling $1.9 billion between 2022 and 2023, year-to-date. The United Kingdom raised $579 million with 11 deals. 

The report also highlighted a $35.5 million, Series B funding round raised by Lula, an API software insurtech. The investors included Khosla Ventures, NextView, Bill Ackman, Moving Capital and Founders Fund. 

Matthew Vega Sanz, co-founder of Lula, said the company launched GAIL, generative AI by Lula in October. The voice-powered software can sell and provide customer service. 

"Your customers will think they're speaking with a person, when in reality it's GAIL. The coolest part about GAIL is that she'll be the first AI to pass an insurance state licensing exam."

Other items of note:

• Undisclosed investors were the most active investment group in Series B and C rounds. 
  
• Fifteen percent of all Q3 '23 InsurTech deals were in the mid-stage expansion category, which is less than long-term insurtech trends.
  
• The largest Series C insurtech to date is Wefox, which closed a $650 million round.