Global investment in the InsurTech sector of well over $2 billion in Q2 2022 was 8% greater than the total in Q1, but still 50% below 2021’s record-breaking second quarter, according to analysis by Gallagher Re.
Average deal size was up 18.3% to $22.11 million over Q1, which masks a 7.7% fall in total deal numbers.
The quarter saw 132 InsurTech deals, compared to 143 in Q1. The lower Q2 number includes six mega-rounds, including four in the US, which raised $948 million in total, according to the latest quarterly Global InsurTech Report from Gallagher Re, the global reinsurance broker, published today.
Q2 saw 40 L&H investments of $918 million, up 12.4%, and 92 P&C InsurTech deals worth $1.49 billion in total. P&C deal flow was down 13.2%, but total investment was up 5.9% on Q1, while average deal size was $20.73 million.
The early-stage InsurTech funding of $368 million in Q2 represented a decline of 44.4%% compared to Q1, and a drop of 26.1% year-on-year.
An about-average 45.5% of deals benefited US-based InsurTechs, but UK ventures saw a big increase – representing 12.1% of total global deals in Q2 2022, up four points.
(Re)insurers made 28 of the Q2 investments, five fewer than the previous quarter. Their Series A investments comprised almost a third of (re)insurer deals, the highest since Q2, 2020, driven by strategic investments announced as partnerships.
Dr Andrew Johnston, global head of InsurTech at Gallagher Re, said: “Global markets have struggled since the beginning of the year, with even the most robust stock valuations taking a beating.”
“InsurTechs which are set to deliver growth and profitability over the long-term now present confident investors with an excellent opportunity to diversify their portfolios. A number of them will undoubtedly change the face of our industry, or parts of it, and in some cases are already doing so. As markets begin to recover, those InsurTechs should rise to the surface with the utmost buoyancy.”