Global InsurTech investments reached record levels in Q2 2017, with London leading the way

InsurTech companies raised over $800m-worth of funding in the second quarter of the year across 34 deals

In the second quarter of the year, InsurTech companies received 17.2% more deals and over double the overall investment compared with Q2 2016. The $822m total eclipsed the levels set by the second largest quarter in the period, Q1 2016, by almost $200m, despite seeing 46% less deals. This was in contrast to the trend between Q1 2016 and Q1 2017 where there was a continuous QoQ decrease in overall InsurTech funding, as investment fell from $630.4m to just $189.8m last quarter – a fall of nearly 70%. Deal activity peaked in the first quarter of last year with 63 transaction, and saw its lowest point in the following quarter with 29. Q2 2017 also set record for the average funding round size with $24.2m as the top eight InsurTech deals of 2017 so far all came in that quarter.

InsurTech investments had a strong start to the year with funding in the first half of 2017 almost two thirds of 2016’s total

  • 2016 was InsurTech’s most active year to-date with 199 deals. This was an increase of 86% compared with 2015’s total and over double 2014’s figure of 96. The number of deals in the 2014-2016 period grew at a CAGR of 27.5%.
  • 2015 set record funding levels with over $2.1bn invested into InsurTech companies, spearheaded by Chinese firm ZhongAn’s $934m Series A raised from CICC, CDH Investments, and Morgan Stanley.
  • 2015’s average funding round size was $19.9m, the highest for an entire year in the period. The first half of 2017’s average investment size in contrast is $11.6m. 2017 looks set to come close to surpassing both 2016’s record deals haul and 2015’s record total investment.

UK-based Gryphon received the largest InsurTech investment of Q2 2017 with $230m

  • The top ten investments received by InsurTech companies across Q2 2017 totalled over $700m – more than 90% of InsurTech’s overall funding for the quarter. The largest investment went to London-based insurance-challenger Gryphon (aka Gryphon Group Holdings Limited). The transaction was one of only two European-based firms in the top ten, with Swedish company BIMA also on the list with the ninth largest deal.
  • Six of the top ten are headquartered in the US, with Bright Health leading the way for US InsurTech investment having received a $160m-valued Series B funding round at the start of June led by Greenspring Associates. Minnesota-based Bright Health offers health insurance options direct to consumers through both public and private exchanges.
  • Asian-headquartered firms comprise the remainder of the top ten. They are made-up of India-based duo Acko General Insurance and Coverfox Insurance, as well as Singaporean firm Singapore Life, a life insurance firm founded in 2014 that offers protection solutions both digitally and through financial advisers.

Europe has emerged to become one of InsurTech’s leading regions since 2014

  • Investments going to European InsurTech firms rose each year in the 2014-2016 period. Its share of global funding continued to rise in 2017 where the region saw its share increase to a third – a percentage which would be a record for the continent if continued until the end of the year. The growth in Europe’s share was led by the UK, which received 14 separate rounds of funding in the InsurTech space in the first half of 2017, nearly half of the overall deals that went to European-based firms in the period.
  • North America’s proportion of global InsurTech investments fell YoY in the period 2014-2016, and has also seen a further fall in 2017. The region still leads global InsurTech funding but has seen its deal share fall over 20% since 2014 – a decrease from 68.8% to 47.1%.
  • While Europe’s share of InsurTech investments has seen a steady rise since 2014, Asia has seen the opposite. The two regions had 17.8% apiece of the global InsurTech funding in 2015, whereas in 2017 so far, they are 21.8 percentage points apart.

London overtakes New York and San Francisco to lead global InsurTech investment for the first half of 2017

  • London-based InsurTech companies received 14 separate investments across the first half of this year. This sees the UK capital overtake US FinTech hubs New York and San Francisco to the top spot, who have led investments into the InsurTech space over the past three years.
  • New York is still InsurTech’s most frequent place for investment overall, however. InsurTech companies based in the city have received 42 separate funding rounds since the start of 2014 – more than any other city worldwide.
  • Combined, the top five cities received 136 investments – 32.2% of the total InsurTech deals in the period. Berlin and Singapore round off the top five with 13 and 12 deals each in the period, respectively.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies in InsurTech as well as across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2017 FinTech Global

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