In 2024, investors continued to retreat from insurtech.
Just 113 investors made at least 2 equity insurtech investments during the year — a 72% drop from the high of 406 investors in 2021. As a result, insurtech dealmaking dropped to 362 deals, the lowest annual total since 2016.
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Key takeaways from the report include:
- Insurtech dealmaking and funding continue to decline. Deal count fell 28% year-over-year (YoY) to 362 deals in 2024, while funding dropped 4% to $4.5B. Insurtech deals and funding are both at recent lows.
- Quarterly funding to P&C insurtechs is in the gutter. P&C funding dropped 43% quarter-over-quarter (QoQ) to $0.4B in Q4’24 — a 7-year low — with annual funding also declining to $2.6B. The year’s 2 largest deals in P&C went to AI-focused startups Altana AI and Akur8, highlighting investors’ appetite for specialized AI opportunities.
- Silicon Valley is dethroned as insurtech’s funding capital. Silicon Valley’s share of global insurtech funding dropped dramatically from 20% in 2023 to 10% in 2024, surpassed by New York at 15%. This was the first time since 2018 that Silicon Valley wasn’t No. 1.
- Early-stage insurtechs raise record-high deal sizes. The median early-stage insurtech deal size surged 52% YoY to $3.8M in 2024 — outpacing the broader venture landscape — as investors concentrate on a more selective group of innovators.
- Recently funded insurtechs show stronger business fundamentals and more efficient growth trajectories. Insurtechs that raised funding in 2024 have grown employee headcounts by a median of 20% over the last 12 months, far surpassing the 3% growth among those that raised during the funding boom of 2021.
Insurtech dealmaking and funding continue to decline
Insurtech deal count fell 28% YoY, from 500 deals in 2023 to 362 in 2024. The decline outpaced the broader venture environment, which saw deal count fall 19% YoY. 2024 was the worst year for insurtech dealmaking since 2016 (328 deals).
Deal volume among leading investors has also decreased. The number of investors that made 5 or more equity insurtech investments has fallen from 57 in 2021 to just 7 in 2024. Those that remain active now operate in a more favorable environment due to reduced competition across the marketplace.
Insurtech funding declined in 2024 as well, though by only 4% YoY.
Quarterly funding to P&C insurtechs is in the gutter
Q4’24 marked a 7-year low for P&C insurtech funding, which fell 43% QoQ to $0.4B. The decline caused broader insurtech funding to halve QoQ, from $1.4B in Q3’24 to $0.7B in Q4’24.
P&C deal count also fell 10% QoQ to 45 in Q4’24, the lowest level since Q2’16.
Annual P&C insurtech funding declined to $2.6B in 2024, a 7-year low, underscored by just 2 P&C insurtech startups raising $100M+ mega-round deals: Altana AI, which offers an AI-powered supply chain risk platform, and Akur8, an AI-powered pricing platform. Those deals signal appetite for specialized AI products for the insurance industry, coinciding with a global surge in AI funding to over $100B last year.
Comparatively, life & health insurtech saw an increase in annual funding and dealmaking. Funding increased 64% YoY to $1.8B in 2024, while deals ticked up from 126 in 2023 to 128 in 2024.
Silicon Valley is dethroned as insurtech’s funding capital
The share of global insurtech funding to Silicon Valley-based startups halved YoY, falling from 20% in 2023 to 10% in 2024. Comparatively, New York led the way with 15% of global insurtech funding share in 2024, more than doubling from 7% the year prior.
Silicon Valley is the world’s leading tech ecosystem, and venture-wide funding to the region’s startups soared last year amid a boom in AI investment. Given the ecosystem’s prominence, diminished insurtech activity in Silicon Valley could lead to missed opportunities for insurance-focused AI advancements.
Early-stage insurtechs raise record-high deal sizes
The median insurtech deal size increased from $4.1M in 2023 to $5.2M in 2024.
The increase was fueled by early-stage insurtechs, which saw median deal size surge 52% YoY, from $2.5M in 2023 to $3.8M in 2024. The size and growth rate both beat out the broader venture environment, where early-stage deal size increased 17% YoY to $2.1M.
Combined with the broader decline in dealmaking, larger check sizes indicate that investors are concentrating their investments on fewer bets. For the insurance industry, this dynamic points to a slimmer insurtech landscape with fewer high-growth participants moving forward.
On the other hand, late-stage insurtech deal sizes declined 19% YoY from $40M in 2023 to $32.5M in 2024.
The decline coincides with a restricted exit environment: Insurtech M&A exits fell from 57 in 2023 to 35 in 2024.
Nevertheless, notable exits include CCC Intelligent Solutions’s acquisition of EvolutionIQ in December at a valuation of $730M, as well as Applied’s purchase of Planck in July. Both acquisitions targeted genAI-enabled startups, signaling a broader appetite for genAI insurance offerings.
Recently funded insurtechs show stronger business fundamentals
Insurtechs that raised funding in 2024 are growing headcounts faster than other insurtechs, by a median of 20% over the last 12 months and 40% over the last 24 months.
Comparatively, median headcount growth among insurtechs that raised a funding round at the height of the funding boom in 2021 is marginal — just 3% over the last 12 months.
The higher growth rates of recently funded insurtechs suggest a new breed of companies with stronger fundamentals — they’re not only able to raise capital in a selective market but are also demonstrating more efficient growth than their 2021-funded counterparts.
By the same logic, investors and partners (like established brokers and carriers) should monitor the landscape for outliers that represent organic growth opportunities — such as insurtechs that haven’t raised funding in several years but continue to grow headcount at a steady clip.
MORE INSURTECH RESEARCH FROM CB INSIGHTS
- How genAI is reshaping the insurance value chain
- Insurtech 50: The most promising insurtech startups of 2024
- ITC Vegas 2024: Insurance is facing an AI inflection point
- Tech Transforming the World: The Game Changers Roundtable
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