InsurTech unicorn describes startups that are valued at more than $1 billion. Global InsurTech funding fell to USD912.25 million in Q1’2024, the lowest since Q1’2020. The industry saw no quarterly USD100 million+ mega-round deals for the first time since Q3’2017.
Property & Casualty InsurTechs raised USD605.58 million in Q1’2024, a low not seen since Q3’2018. Early-stage InsurTech funding increased 26.5% quarter on quarter, countering the broader InsurTech funding picture.
The global insurtech market remains robust — particularly for late-stage startups — despite a marked decrease in funding
The integration of InsurTech startups with traditional insurance companies represents a pivotal evolution in the insurance industry. These collaborations harness the innovative capabilities of InsurTechs to enhance, streamline, and revolutionize the traditional models of insurance, from policy creation and risk assessment to customer engagement and claims processing.
This convergence is not merely a trend but a strategic move towards digitization that offers significant benefits to insurers, startups, and policyholders alike.
- Global InsurTech funding dipped below USD1B in Q1’2024, falling from USD1.103B in Q4’2023 to USD912.25M in Q1’2024. The decrease was largely attributable to an absence of USD100M+ mega-round InsurTech deals for the first time since Q3’2017.
- In the first quarter of 2024, InsurTech deal activity rose by 7% from the previous quarter, with transactions increasing from 100 to 107 (see Top-Performing Insurance and InsurTech Stocks). This growth continues a trend noted in earlier reports, where interest in the sector remains strong, although the average investment per deal is decreasing.
- Half of Q1’2024 deals went to distribution-focused InsurTechs. The majority of tech investments from (re)insurers were early-stage. Quarterly global InsurTech funding fell to the lowest level since Q1’2020, decreasing 17.3% quarter on quarter.
TOP-20 InsurTech Unicorns by valuation
| № | InsurTech | Most recent valuation | VC raised to date |
| 1 | Bright Health | $11.1B | $1600M |
| 2 | Root Insurance | $6.7B | $527.5M |
| 3 | PolicyBazaar | $5.9B | $478.3M |
| 4 | Shuidi | $4.7B | $603.9M |
| 5 | Wefox | $4.5B | $1300M |
| 6 | Next Insurance | $4.0B | $886M |
| 7 | Ethos Life | $2.7B | $416.0M |
| 8 | ManyPets | $2.4B | $480.4M |
| 9 | Newfront | $2.2B | $312M |
| 10 | Lemonade | $1.6B | $522M |
| 11 | Hippo Enterprises | $1.5B | $709.5M |
| 12 | At-Bay | $1.4B | $291.8M |
| 13 | Marshmallow | $1.2B | $111.3M |
| 14 | AgentSync | $1.2B | $111.1M |
| 15 | Caribou | $1.1B | $188.3M |
| 16 | Acko | $1.1B | $504M |
| 17 | Branch Insurance | $1.1B | $224.5M |
| 18 | Surest | $1.1B | $177.5M |
| 19 | Zego | $1.1B | $257.7M |
| 20 | Betterfly | $1.0B | $205.7M |
The increasing number of insurance claims worldwide is one of the major factors accentuating the market growth. Auto, life, and home are the most common insurance claims secured by people worldwide. Although average check sizes were smaller and mega-round funding also dropped, Johnson maintains that there are reasons for optimism.
TOP-20 InsurTech Unicorns by venture capital raised
| № | InsurTech | VC raised to date |
| 1 | Bright Health Group | $1600M |
| 2 | Wefox | $1300M |
| 3 | Next Insurance | $886M |
| 4 | Hippo Enterprises | $709.5M |
| 5 | Shuidi | $603.9M |
| 6 | Root Insurance | $527.5M |
| 7 | Lemonade | $522.0M |
| 8 | Acko | $504.0M |
| 9 | ManyPets | $480.4M |
| 10 | PolicyBazaar | $478.3M |
| 11 | Ethos Life | $416.0M |
| 12 | Newfront | $312.0M |
| 13 | At-Bay | $291.8M |
| 14 | Zego (Automotive Insurance) | $257.7M |
| 15 | Branch Insurance | $224.5M |
| 16 | Betterfly | $205.7M |
| 17 | Caribou (Financial Software) | $188.3M |
| 18 | Surest | $177.5M |
| 19 | Marshmallow | $111.3M |
| 20 | AgentSync | $111.1M |
InsurTech startups, characterized by their agile operations, innovative technologies, and customer-centric approaches, bring a breath of fresh air to the historically conservative insurance sector.
The average deal size experienced a significant reduction of 30.6%, decreasing from USD 14.14 million in the fourth quarter of 2023 to USD 9.81 million in the first quarter of 2024.
This marks the first time since the third quarter of 2017 that the average global InsurTech deal size has fallen below USD 10 million
They leverage cutting-edge technologies such as artificial intelligence (AI), blockchain, the Internet of Things in insurance, and big data analytics to introduce efficiencies, personalize insurance products, and improve risk management.
Annual InsurTech funding volume and transaction count
These technologies enable the development of new insurance models, such as on-demand and usage-based insurance, which cater to the evolving needs of modern consumers.
P&C InsurTech funding also declined, dropping 22.5% to USD 605.58 million in the first quarter of 2024, the lowest since the third quarter of 2018.
The average deal size in this category reached its lowest point since the first quarter of 2018 at USD 10.09 million, and the total number of deals decreased to 70, a reduction of six deals from the previous quarter.
Despite lower deal counts and funding, transactions were consistent and continued throughout 2024, indicating a mature and healthy market.
Whereas, 2021 was the peak of the market, and described as the first phase of the insurtech investment or the ‘Great Experiment’, 2023-2024 could be viewed as the beginning of a new phase involving a sustained change in investor behavior.
Will check sizes be smaller but not less frequent? Will mega-rounds become less common? Will the overall flow of deal activity continue? Time will tell, and we may one day reflect that 2023 was an overcorrection, and potentially itself an anomaly.
For traditional insurance companies, partnering with InsurTech startups offers a pathway to digital transformation without the need to build digital solutions from scratch.
It allows them to tap into advanced analytics for better risk assessment and pricing, automate processes to increase operational efficiency, and enhance customer experiences through more intuitive digital interfaces and personalized services.
Furthermore, these partnerships can significantly reduce time-to-market for new products, enabling insurers to stay competitive in a rapidly changing market.
The synergy between insurers and InsurTech startups also fosters innovation in product development and distribution channels.
Startups often experiment with new business models and distribution strategies that, when scaled by an established insurer, can lead to disruptive innovations in the market.
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Fact-checked by Oleg Parashchak – Editor-in-Chief Beinsure Media, CEO Finance Media Holding
