InsurTech funding on track for a record-breaking 2018 with $1.7bn in capital raised

InsurTech investment in 2018 is already over 80% of 2017’s total

  • Global InsurTech investment in the first six months of the year already amounts to 85.3% of 2017’s total funding, putting it on track to surpass the record highs from last year.
  • Investment to the sector is also on an upward trajectory – up 81.3% from H2 2017, and up 61.1% compared to H1 2017, driven by several large transaction including four deals over $100m.
  • Despite total investment increasing, deal activity has slowed down by a third relative to H1 2017. As a result, the average deal size has gone up to $24.9m as investors are backing more established companies targeting aggressive expansion and new industry verticals.

InsurTech funding slowed down in Q2 after a strong start to the year

  • InsurTech startups raised nearly $1.2bn in Q1 2018, making it the largest quarter since Q2 2015 when $1,237.9m was invested. The uptick in capital raised was largely driven by a $500m investment in Armour, a Bermuda-based P&C insurance business.
  • InsurTech investment in the first six months of 2018 is the largest half-year funding period to date. However, Q2 showed signs of a slow down with only $506m raised, 57.7% less than Q1 2018 and 46% less when compared to Q2 2017.
  • Q3 2017 represented a brief lull in InsurTech funding, with no deals over $50m recorded.

Over $1.2bn was raised in the top 10 InsurTech deals in H1 2018

  • The top ten InsurTech deals in the first half of 2018 raised a combined total of $1.2bn, which equates to 70.9% of the total amount invested during the period.
  • Armour received the biggest deal so far this year and the second biggest InsurTech deal ever only behind ZhongAn’s $937m Series A round recorded in 2015. The insurance business will be using the $500m to form a reinsurance group called Armour Group Ltd.
  • US-based companies were responsible for 6 of the top 10 InsurTech Deals. Germany was home to two deals and the final and largest two deals were in Bermuda and India, which represented Armour and PolicyBazaar, respectively.
  • PolicyBazaar raised $200m in a Series F round led by SoftBank in the only Asian transaction. The company will use the capital to grow its insurance and healthcare services, as well as expand in Dubai where it serves a lot of Indian customers who travel back to their home country to receive treatments.

Continued movement towards larger deals as the InsurTech industry matures

  • There is a clear continued trend towards larger deals as the InsurTech industry develops, with deals over $10m increasing from 19.4% share of total deals in 2014 to 51.4% share of total deals in H1 2018.
  • Deals between $10-25m saw the largest relative growth, rising as a share of total deals in the first six months by 16.7 percentage points (pp) compared to 2017 and 24.6 pp since 2014. Notable deal in the segment is the $20m raised by PolicyPal, a Singapore-based digital insurance manager, via an ICO in March.
  • Sub-$1m deals have seen a sharp decrease in quantity as investors shift away from backing new startups which are not operating in untapped insurance verticals.

The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2018 FinTech Global

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