Global Insurtech Funding and Deals Slide to 6-Year Lows – Research Report

Global Insurtech funding and deals slide to 6-year lows in 2023, according to an update shared by CBInsights.

Insurtech startups had a “brutal” 2023, with funding and deals reaching 6-year lows — in line with the broader venture slowdown, the team at CBInsights noted.

Nevertheless, early-stage insurtechs have “shown some resilience, with the median early-stage deal size holding steady in 2023 vs. 2022.”

Furthermore, despite the funding headwinds, insurtechs continue “to see demand from strategic investors and acquirers,” the CBInsights report revealed.

As stated in the CBInsgights update, during Q4’23, for instance:

  • Allianz and Allstate‘s venture arms invested a combined $265M in Next Insurance
  • Travelers acquired Corvus Insurance for $435M
  • Sumitomo Life took a majority stake in Singlife (which had previously merged with Aviva Singapore) at a $3.4B valuation

Based on CBInsights’ deep dive, here are the key takeaways on the state of insurtech:

  • Global insurtech funding fell to $4.6B in 2023, the lowest level since 2017. Total insurtech funding fell 45% YoY, from $8.3B in 2022.
  • A dearth of $100M+ mega-rounds drove the funding drop. Insurtech mega-round funding and deals fell by 64% and 63%, respectively, between 2022 and 2023.
  • Quarterly insurtech deals have fallen by over 50% from their record high in Q2’21. Q4’23 saw just 100 global insurtech deals — a significant decline from mid-2021, when the sector saw over 200 deals in one quarter.
  • Early-stage insurtech deal sizes held steady YoY at $3M in 2023. 62% of insurtech deals were early-stage in 2023 — a 5-year low in deal share after a spike to 70% in 2022.
  • The US regained majority share of insurtech deals among global regions in 2023. US insurtech deal share ticked up to 51%, surpassing the 50% mark for the first time since 2020.

In another report, CBInsights claims that AI breakthroughs are “ushering in a new wave of dynamism in tech.”

Startup valuations jumped for AI companies in 2023. Big tech is reaching new heights — as well as facing intensifying competition. Corporates are feeling “the pressure to build their AI strategies and stay ahead of their peers.”

At the same time, enterprises and investors have “become more cautious spenders.”

Venture funding fell to a 6-year low in 2023. Many tech spaces will “contend with consolidation in the year ahead, from digital therapeutics to cybersecurity.”

Nevertheless, even with limited access to capital, startups continue “to make commercial breakthroughs in areas like quantum computing, neurotech, and robotics.”

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