Average deal dimension 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 mentioned. 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 end of 2019, we estimated the total number of insurtech businesses globally at 3,000, but now only about 2,050 are actively open for business,” mentioned Dr. Andrew Johnston, international head of insurtech at Gallagher Re. “Meanwhile, venture capitalists are focused on profitability and well-understood KPIs. capital is available, but investment dropped dramatically in 2022 from 2021, with 2021 arguably marking the peak of expectations. The most significant feature of 2022 is that the narrative around ‘disruption’ seems to be truly over.”
Read extra: Revealed – insurers’ tech priorities for 2023
Johnston mentioned {that a} small variety of particular person companies – all of which deal with the business as a group – did remarkably nicely in 2022.
“2022 has prompted an exodus of third-party capital providers, causing the sector to refocus on the real prize: wider adoption of appropriate technology to make the entire process of insurance more efficient, cost-effective, and less complex, leading to an improved customer experience,” he mentioned.
Investment frontrunners
Gallagher Re’s This fall Global InsurTech Report additionally compiled a listing of 2022’s insurtech funding frontrunners. Leading with the 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 checklist for whole 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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