Average deal measurement throughout 106 rounds fell 42.3% to $11.79 million, the report discovered. Total funding for 2022 was down by 49.5% from the prior 12 months, to $7.98 billion. Insurtechs additionally attracted $6.51 billion much less in mega-round funding in 2022 – a year-over-year decline of 66.7%.
Early-stage funding fell 25.1% quarter over quarter to $408.27 million in This fall, pushed by a 51.3% decline in early-stage P&C funding over 50 transactions averaging $4.63 million, Gallagher Re stated. Early-stage L&H funding, nevertheless, elevated by 46.5% to $213.64 million in This fall, pushed by 4 offers exceeding $40 million.
End of the ‘disruption’ narrative
“At the top of 2019, we estimated the whole variety of insurtech companies globally at 3,000, however now solely about 2,050 are actively open for enterprise,” stated Dr. Andrew Johnston, world head of insurtech at Gallagher Re. “Meanwhile, enterprise capitalists are centered on profitability and well-understood KPIs. capital is on the market, however funding dropped dramatically in 2022 from 2021, with 2021 arguably marking the height of expectations. The most vital function of 2022 is that the narrative round ‘disruption’ appears to be really over.”
Read extra: Revealed – insurers’ tech priorities for 2023
Johnston stated {that a} small variety of particular person companies – all of which deal with the trade as a group – did remarkably properly in 2022.
“2022 has prompted an exodus of third-party capital suppliers, inflicting the sector to refocus on the actual prize: wider adoption of acceptable know-how to make all the technique of insurance coverage extra environment friendly, cost-effective, and fewer advanced, resulting in an improved buyer expertise,” he stated.
Investment frontrunners
Gallagher Re’s This fall Global InsurTech Report additionally compiled a listing of 2022’s insurtech funding frontrunners. Leading with the very best variety of particular person offers was Y Combinator, which accomplished 17 rounds. Second place was shared by Gaingels and Anthemis, which every accomplished 12 offers. Plug and Play Ventures took third with 10 offers.
Greycroft topped the listing for complete funding worth, investing $699 million over 9 transactions in 2022. OMERS Ventures was second with $592 million, together with a share of This fall’s solely mega-round, for Clearcover. Allianz X took third with $565 million throughout three offers.
The high recipient international locations for insurtech funding in 2022 had been the US, the UK, Germany, France, India, Israel and Australia, all of which topped $200 million, Gallagher Re reported. At $4 billion, US firms acquired 35% extra funding than the following six international locations mixed.
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