Global InsurTech seed deal activity underperforms in Q2 2023 dropping 38% YoY

Key Insurtech seed investment stats in Q2 2023
• Global InsurTech seed deal activity reached 51 transactions in the second quarter, a 38% drop from Q2 2022
• The average InsurTech seed deal size in Q2 2023 increased 66% to $3m YoY
• The USA was the most active country for InsurTech seed deals with 22 funding rounds, a 43% share of all transactions

The number of InsurTech seed deals globally declined during the second quarter when compared to the same period in 2022. In Q2 2023, there were 51 InsurTech seed deals globally, indicating a decrease of 38% compared to same quarter last year. The trend is similar to the wider InsurTech investment market which saw a 37% drop in deal activity over the same period. In Q2 of 2023, the average size of InsurTech seed deals saw a YoY increase of 66%, reaching $3 million showcasing investors are ready to back big the right companies.

Meanwhile, a digital asset backed life insurer, had the largest InsurTech seed deal in Q2 2023, raising $19m in their seed round, led by Gradient Ventures, Lachy Groom and Sam Altman. The funding round values the company at $100m. Meanwhile is the first and only life insurer entirely denominated in digital asset. This funding round enables Meanwhile to be licensed and regulated as an life insurance company by the Bermuda Monetary Authority, a leading global insurance regulator, as well as hire its initial team and launch its first product, a digital asset denominated whole life insurance. By utilizing the power of AI and operating entirely in digital assets, Meanwhile brings a frictionless offering to one of the oldest financial products in the world, life insurance. Traditional insurance companies engage in tedious and time-consuming manual processes and reviews with a typical policy taking weeks to be underwritten. And utilizing AI-powered underwriting, claims, and operations, Max Gasner, CTO and co-founder, and this team are building a highly-efficient end-to-end insurance system reducing manual labour and promoting transparency.
The US was the most active InsurTech seed deal country with 22 transactions, a 43% share of deals. India was second with four deals, a 7.8% share of total deals. Germany was the third most active with three deals, a 5.8% share of total deals.

On February 2023 the US regulator, The National Association of Insurance Commissioners (NAIC) outlined its strategic priorities for 2023, aiming to advance state-based solutions for pressing issues. These priorities include addressing climate risks and natural catastrophes through consumer education and supporting state insurance departments. They also focus on responsible innovation by updating regulations for data, artificial intelligence, and cybersecurity. Ensuring financial oversight and transparency, particularly concerning insurer portfolios and alternative asset managers, remains crucial. The NAIC will examine long-term care insurance strategies, enhance consumer awareness, and combat deceptive insurance marketing. Additionally, the NAIC is committed to closing protection gaps, especially for underrepresented communities, and expanding opportunities in the insurance sector.

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