’This year’s emphasis on AI will assist businesses in navigating the challenging process of comprehending the fundamentals of AI,’ says global head of insurtech
Global insurtech funding saw a 39% quarter-on-quarter surge during the second quarter (Q2) of 2024 to reach £992m ($1.27bn), up from £729.4m ($912.3m) in the previous quarter.
This marks the highest level of funding for insurtechs since Q1 2023 and a reverse of previous declines.
That was according to the latest instalment of Gallagher Re’s Global Insurtech Report Q2 2024, published yesterday (1 August 2024).
The report also revealed that out of the £992m total funding, artificial intelligence (AI) centred insurtechs secured a total £348.76m ($445.91m) in funding and represented a third of all deals in Q2.
However, the average size of AI insurtech deals was smaller compared to non-AI deals during this period.
Since 2012, AI insurtechs have received approximately 16% of all capital invested in the industry.
Andrew Johnston, global head of insurtech at Gallagher Re, said: “This year’s emphasis on AI will assist businesses in navigating the challenging process of comprehending the fundamentals of AI, its different subcomponents and, ultimately, the benefits of implementing it effectively.
“The application of AI to risk functions, such as pricing and underwriting, offers significant potential, but as the industry continues to embrace AI, it must also address the regulatory challenges associated with its implementation.”
Deal count
The reinsurer’s latest edition of the Global Insurtech Report focused on the role of AI in reinsurance and insurance, especially around the areas of pricing, underwriting and portfolio optimisation.
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It found that the overall insurtech deal count in Q2 2024 was the lowest since Q2 2020, which suggests a shift towards larger, more impactful investments.
The average deal size rose to £14.44m ($18.46m), the highest level since Q3 2022, which indicated a growing appetite for larger investments in the industry.
Deals completed in Q2 2024 include Sixfold and Artificial Labs.
- Insurance Times has converted dollar amounts into pounds using an exchange rate of $1.28 = £1, which was correct as of 1 August 2024.
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