Record-breaking nine-month InsurTech investment surpasses $10 billion threshold in Q3, 2021

Rhea-AI Summary

In 2021, global investment in the InsurTech sector has achieved unprecedented levels, surpassing $10 billion for the first time. As of Q3 2021, total investments reached $10.5 billion, just $12 million shy of 2018 and 2019 combined. The third quarter alone saw 113 deals totaling over $3.1 billion, marking a 23% increase from Q3 2020. Notably, early-stage startups raised a record $630 million. However, funding remains concentrated, with 0.5% of InsurTechs securing $3.3 billion. The latest Briefing includes insights and case studies on innovative InsurTechs.

Positive

• Global InsurTech investment exceeded $10 billion for the first time.
• Record $10.5 billion raised in the first three quarters of 2021.
• Q3 saw 113 deals and over $3.1 billion in funding, a 23% increase from Q3 2020.
• Early-stage startups set a record by raising $630 million.

Negative

• Funding is highly concentrated; 0.5% of InsurTechs received $3.3 billion.
• The share of seed and angel rounds fell to 19%, the lowest since Q2 2020.

LONDON, Oct. 27, 2021 (GLOBE NEWSWIRE) -- Consolidated global investment into the InsurTech sector continues to reach new highs. Capital invested in insurance technology start-ups surpassed the US$10 billion mark for the first time in any one year on record. 2021 has now overseen a record-breaking US$10.5 billion raised during the first three quarters of the year. Still with three months left to go, 2021 is now only $12 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 $3.1 billion in investment, a 23% increase over Q3, 2020. It was the second-largest funding quarter on record. Deal numbers were up only 9% year-on-year, but the number of mega-rounds of $100+ million reached 11 and accounted for more than half of total funding (down from nearly 70% in Q2, 2021, a quarter that broke nearly every record). Two of the three largest deals were with cyber-related InsurTechs: Coalition ($205 million) and At-Bay ($185 million).

The share of US-domiciled investment targets rebounded to nearly 46%, 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 $630 million, as their average deal size grew to nearly $12 million. The share of seed and angel rounds fell dramatically, however, to just 19%, its lowest point since Q2, 2020. Conversely, Series A deal count nearly doubled to 31% of deals.

Dr. Andrew Johnston, global head of InsurTech at Willis Re, said: “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% of the world’s InsurTechs shared $3.3 billion, while $1.5 billion was distributed between another 147. Funding was zero for the remaining 95%.”

The latest Briefing, which explores InsurTechs focused on the future of risk, opens with a deep dive into the ways InsurTech are attempting to deliver innovations that ultimately lead to better insurance outcomes. This Briefing includes case studies of the InsurTechs:

• OTONOMI, a blockchain-enabled parametric MGA in the cargo space;
• Corvus, an MGA with an AI-driven approach to commercial risk;
• Arbol, a platform for parametric weather risk products;
• Stable, which provides price risk management tools for the food and farming sectors;
• Understory, a platform for hyperlocal climate-risk analysis;
• Concirrus, which uses IoT data and AI to design and price digital insurance products;
• Kettle, a reinsurance MGA that uses AI to assess perils, starting with California wildfires; and
• Previsico, a flood modeler focused on surface water flooding.

The Q3, 2021 Briefing features discussions with Volery Capital’s Manny Citron about the role of impact capital, and Toby Behrman of Global Parametrics about the combined impact of development capital and technology on liquidity in new and underserved risk transfer markets. ‘Transaction Spotlight’ examines the tech-enabled commercial flood risk MGA reThought and its recent $15.5 million fundraise, and explores the SME cyber, tech, and E&O risks At-Bay, which just raised $185 million. ‘Incumbent Corner’ speaks with Liberty Mutual’s Brendan Smyth and Premal Gohil, leaders respectively of its Global Innovations & Insights and Innovation Partnerships & Investments areas.

Thought leadership comes from Julian Roberts, managing director, Alternative Risk Transfer Solutions at Willis Towers Watson, who considers the future of risk management. Roberts said: “The interdependence of risk is now greater than ever, with almost every link in every supply chain reliant on functioning technology and connectivity. It’s both an emerging risk and a powerful solution. Enhanced data enabled by technology provides effective new risk insights and paves the way for boundless new creativity in insurance solutions.”

View the full report here.

About Willis Re

One of the world's leading reinsurance brokers, Willis Re is known for its world-class analytics capabilities, which it combines with its reinsurance expertise in a seamless, integrated offering that can help clients increase the value of their businesses. Willis Re serves the risk management and risk transfer needs of a diverse, global client base that includes all of the world's top insurance and reinsurance carriers as well as national catastrophe schemes in many countries around the world. The broker's global team of experts offers services and advice that can help clients make better reinsurance decisions and negotiate optimum terms. For more information, visit willistowerswatson.com/Solutions/reinsurance.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimise benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas – the dynamic formula that drives business performance. Together, we unlock potential. Learn more at willistowerswatson.com.

Media contact

Haggie Partners: +44 20 7562 4444 | willisre@haggie.co.uk

FAQ

What was the total InsurTech investment in Q3 2021 for WLTW?

In Q3 2021, total InsurTech investment reached over $3.1 billion.

How much capital was raised by early-stage InsurTech startups in 2021?

Early-stage InsurTech startups raised a record $630 million in 2021.

What percentage of InsurTech funding went to the top deals in Q2 2021?

In Q2 2021, more than two-thirds of total capital raised went into just 15 deals.

How has the share of US-based InsurTech investments changed in Q3 2021?

The share of US-domiciled investment targets rebounded to nearly 46% in Q3 2021.

What was notable about the number of mega-rounds in Q3 2021 for WLTW?

There were 11 mega-rounds of $100+ million in Q3 2021, accounting for over half of total funding.