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Global insurance technology funding to return to $2.4 billion in Q2 2022

Global funding for the insurance technology sector registered a slight recovery in the second quarter of 2022, but is still down more than half from a year ago, a report from reinsurer Gallagher Re shows. I’m here.

Funding rebounded about 9% to $2.41 billion in the April-June period from $2.2 billion in the first quarter, but investment levels in the three months to June 30 was still 50.2% below the $4.84 billion recorded by The second quarter of 2021 was the second best on record, the London-based advisory said in a quarterly update.

Reported Q2 raised a total of $948 million across 6 mega rounds, including 4 US-based, with average deal size growing 18.3% quarter-on-quarter to approximately $22.1 million the book says.

The total is approximately 43% higher than the $668 million in the first quarter. This was offset by a 7.7% decline in his total deal count of 132 in the second quarter from 143 in the first three months of the year.

Andrew Johnston, global head of InsurTech at Gallagher Re, said insurance technology companies are poised for long-term growth and profitability amid a downtrend in the stock market, and investors will He called it a “perfect opportunity” to diversify its portfolio.

“Several [InsurTechs] It will undoubtedly change the face of our industry, or parts of it, and in some cases already does. These InsurTechs should emerge with maximum buoyancy as the market begins to recover. ”

According to Future Market Insights, demand for InsurTech solutions will help predict consumer demand, increase purchases, and use machine learning, artificial intelligence, and cloud computing to enhance decision-making and insurance planning. , is rising.

The global insurtech industry is expected to grow from about $16.6 billion in 2022 to $165.4 billion by 2032, with a compound annual growth rate of about 26%.

In 2021, the InsurTech sector will record a record $15.8 billion in funding from 564 deals, with more capital flowing into the industry last year than in 2020 and 2019 combined, Gallagher Re said in April. said to

According to Gallagher Re, total public funding for life and health InsurTech in the second quarter of 2022 reached $918 million. His average deal size for the quarter was $24.8 million, with about 58% of companies focused on prospecting or selling.

Funding to the property and casualty insurance segment also increased, increasing approximately 6% quarter-over-quarter to $1.49 billion, but transaction volumes were down 13.2%. Average deal value for the quarter was $20.73 million, with the majority of deals being between companies with a focus on distribution and business-to-business deals.

The US-based insurtech company closed 60 deals in the second quarter. This is the highest, with 46% of the market.

The UK’s share increased significantly, becoming the only country to record a double-digit market share above 12%.

Gallagher Re said the InsurTech industry remains a viable investment option given the uncertain economic climate. The potential of technology to improve insurance services is also an attractive proposition.

Market participants are “nervous about overall global economic growth,” the company said, citing soaring oil prices, the war in Ukraine and a sharp rise in Covid-19 cases in China.

Johnston said the recent decline in corporate values ​​could lead to mergers, acquisitions and divestments that were unthinkable six months ago.

“It caused some InsurTechs to coalesce, throwing cold water on many other InsurTechs who previously thought of themselves as special or unique,” he said.

“After realizing value, certain InsurTechs need to be offloaded and acquire certain investors (even certain InsurTechs). For both sides of the deal, this moment can be viewed as a great opportunity .”

Updated: Aug 5, 2022, 3:30 AM