Consolidated global investment into the InsurTech sector continues to reach new highs, with capital invested surpassing the USD10 billion mark for the first time in any one year on record.
2021 has now overseen a record-breaking USD10.5 billion raised during the first three quarters of the year. Still with three months left to go, 2021 is now only USD12 million short of the entirety of what was invested into InsurTechs globally in 2018 and 2019 combined. The total deal count was 421 which is also an annual record according to the new Quarterly InsurTech Briefing from Willis Towers Watson, a leading global advisory, broking, and solutions company (NASDAQ: WLTW).
The latest quarter saw 113 deals yield more than USD3.1 billion in investment, a 23 per cent increase over Q3, 2020. It was the second-largest funding quarter on record. Deal numbers were up only 9 per cent year-on-year, but the number of mega-rounds of USD100-plus million reached 11 and accounted for more than half of total funding (down from nearly 70 per cent in Q2, 2021, a quarter that broke nearly every record). Two of the three largest deals were with cyber-related InsurTechs: Coalition (USD205 million) and At-Bay (USD185 million).
The share of US-domiciled investment targets rebounded to nearly 46 per cent, an increase of roughly seven points from the previous quarter, but countries including Indonesia, Sweden, South Africa, Singapore, and the UAE saw quarter-on-quarter increases in deal activity. Early-stage startups raised a record-breaking USD630 million, as their average deal size grew to nearly USD12 million. The share of seed and angel rounds fell dramatically, however, to just 19 per cent, its lowest point since Q2, 2020. Conversely, Series A deal count nearly doubled to 31 per cent of deals.
Dr Andrew Johnston, global head of InsurTech at Willis Re, says: “The continuing escalation of InsurTech funding does not mean that venture and growth capital is available to most or even many InsurTechs. The growth of global InsurTech investment over the past decade has been significant, but the stark pattern is a concentration of the much for the few. For example, in the second quarter, more than two-thirds of the total capital raised went into 15 deals. Roughly 0.5 per cent of the world’s InsurTechs shared USD3.3 billion, while USD1.5 billion was distributed between another 147. Funding was zero for the remaining 95 per cent.”