Global investment in the insurance technology sector reached $15.8 billion in 2021, an all-time high, according to a new report.
The sector attracted more capital inflows last year than in 2020 and 2019 combined, according to the report compiled by the reinsurance broker Gallagher Re show. The sector also saw a record 564 InsurTech deals last year, according to the report.
“An incredible upward trajectory of global InsurTech funding has occurred over the past nine years after we started tracking it in 2012, culminating in the record total of $15.8 billion for 2021,” said Andrew Johnston, Global Head of InsurTech at Gallagher Re.
“From the first quarter of 2012 through the end of 2021, $41.65 billion has been invested globally in InsurTechs across 2,249 deals in 63 countries.”
Current consumer adoption of InsurTech in the Middle East and North Africa region stands at 8%. However, the industry’s expected usage of services in the future stands at 48%, according to data compiled by Indian research firm Redseer.
The global InsurTech market size is expected to reach $152.43 billion by 2030, registering a compound annual growth rate of 51.7% from 2022 to 2030, said a report by Research and Markets.
Rising awareness of the benefits of InsurTech solutions in simplifying the claims process, improving communication and applying automation is expected to drive the market growth, the report adds.
About $9.4 billion was invested in P&C InsurTechs last year, with the remaining $6.4 billion directed to life and health insurance companies, Gallagher Re said.
The increase in funding in the final quarter of last year was driven by 13 “mega-round” deals, which accounted for 71% of the $5.3 billion invested during that period, according to the report.
“InsurTech investment growth over the past decade has been incredibly impressive and there is no slowing down at this time, with the first quarter of 2022 registering $2.2 billion globally,” said Mr. Johnston.
“Whereas [accounting for] only 43% of total global investment recorded compared to the previous quarter, the first quarter of 2022 saw parity between quarters in terms of total deal flow, with 143 deals recorded.
Although there were only five mega-towers in the first quarter of 2022, it recorded the highest participation of seed investments, with $660 million invested in InsurTechs globally in their early stages. stadiums, said Gallagher Re.
While the United States dominated with a 47% share of InsurTech’s 67 global deals, 31 countries participated in InsurTech’s global investment.
There have been five mega rounds this term. Total investment related to the mega tower totaled $664 million, or 30% of all capital invested in the first quarter of 2022, according to Gallagher Re.
At the end of last year, the United States had more investment in InsurTech — both in terms of cash and number of transactions — than 60 countries combined, according to the report.
“In absolute terms, the $15.8 billion invested in 2021 is a big number, but if you look at it as a share of global venture capital funding, the sector is underinvested relative to its share of domestic product. crude,” Jonathan Hendrickson, vice president and head of InsurTech development at Gallagher, said.
Updated: April 30, 2022, 08:38