Global insurtech funding balloons to $4.8bn in 2021’s Q2

Global investment in the insurtech sector has ballooned to $4.8bn (£3.5bn) in Q2 of 2021, demonstrating an 89% increase since Q1, according to Willis Towers Watson’s (WTW) latest Quarterly Insurtech Briefing. 

The briefing report, published today (29 July 2021), noted that the second quarter of 2021 saw 162 deals yield more than $4,824m in investment - this is a 210% increase compared to Q2 in 2020. 

Meanwhile, half year funding for insurtechs this year amounted to $7.4bn (£5.3bn), exceeding the full year investment these businesses received in 2020.  

The enormous quarterly total was driven largely by 15 investment rounds of $100m (£72m) or more.  

Collectively, these 15 deals reached $3.3bn (£2.4bn), or two-thirds of total funding during the quarter.  

The money was raised predominantly by later stage players seeking expansion.  

Andrew Johnston, global head of insurtech at Willis Re, said: “As technology changes our lives, society will demand an insurance community that reflects and supports our changing, digitally empowered behaviours.  

“Consumers and businesses increasingly expect insurance to be delivered when and how they want it and risk carriers that fail to respond will fall away over time. To embrace technology is a minimum survival condition.”  

Truly differentiated  

WTW’s latest briefing, which focuses on insurtechs that are targeting insurance distribution, opens with a detailed exploration of the way technology is impacting the future of delivery channels.  

It includes case studies of the following insurtechs: 

• Bolttech, which connects insurers, distribution partners and customers over an exchange platform. 

• Semsee, a platform for quoting small commercial business. 

• Breathe Life, a digital distribution platform for life insurance carriers. 

• Uncharted and Bindable, two consumer-facing insurance aggregation platforms. 

• Penni.io, which embeds carriers’ products into distribution partners’ digital customer journeys. 

• Talage, a commercial quoting engine built for white labelling.  

Although series B and C fundraising steered a substantial number of deals in Q2 of 2021, the number of early stage deals also increased.  

These were up by more than 9% compared to the previous quarter, and up 200% compared to a pandemic stricken Q2 in 2020.  

Johnston added: “Those that use [technology] to redefine service in the insurance world will thrive. That means a positive future for insurtechs that bring a truly differentiated business approach to our industry.  

“Some of them will create untold long-term opportunities for themselves and the insurance sector.”  

Early stage activity held steady at 57% for overall deals in Q2 this year.  

Insurtechs that focused on distribution accounted for 55% of startup deals in the second quarter. These businesses also accounted for 10 of the 15 mega rounds.  

Most of the distribution insurtechs target reduced dependence on agent channels.  

Of all the Q2 deals this year, 73% were for property and casualty-related insurtechs, while 43 companies raised funds for life and health technology.

Funds were raised by companies from 35 countries, including new entrants in Botswana, Mali, Romania, Saudi Arabia and Turkey.  

Clyde Bernstein, head of GB broking and global leader of data and technology, broking strategy at WTW, added: “Lift the hood on the insurance industry and you will see the engine in danger of over-heating.

”The diagnosis from those tasked with keeping the industry on the right trajectory is that a different motor is needed.  

“Fortunate passengers will enjoy the ride as new distribution and technologies deliver a better and more responsive client experience.”