Total global InsurTech investment in 2Q2019 amounted to $1.41bn, according to Willis Towers Watson’s InsurTech Quarterly Briefing report.
While this represents a 2% reduction compared to 1Q2019, it still makes the second quarter the fourth consecutive quarter of global InsurTech investment that surpasses the $1.2bn mark. Deal count in the second quarter was 3% lower than the corresponding period last year, but funding volume grew significantly by 273%. The report attributed this to the increase of late-stage investments.
The report said that Seed and Series A funding fell to $147m in 2Q2019, the lowest recorded since $121m in 3Q2017. The second quarter also saw a 7% drop in the number of early stage investments from 1Q2019, and a 12% reduction y-o-y in deal count.
“The shift toward later-stage investments has seen a concurrent reduction in overall transaction volume to the tune of 21%. In fact, if we look at early-stage investment as a whole, this quarter marks the lowest point since Q3 2017,” said Willis Re global head of InsurTech and quarterly briefing editor Dr Andrew Johnston.
The value of investments in P&C-focused firms rose by 283% compared to 2Q2018, while L&H deals rose by 259%. Meanwhile, the number of strategic investments by reinsurers hit a record high of 36.
The largest deal of the quarter was a $300m Series D round in Lemonade, a licensed insurance carrier offering homeowners and renters insurance, which had participation from Allianz X, General Catalyst, Google Ventures, OurCrowd, SoftBank Group and Thrive Capital. Lemonade has now raised a total of $480m.
“Technology as a strategic vertical is now commonplace in nearly every single insurer and reinsurer across the globe, but the technology from the incoming InsurTech pastures may not be quite as green or as impacting as many incumbents had hoped – or at least anticipated,” said Dr Johnston.
“Whilst we remain resolute in our position about the value created by some InsurTechs, we are also maintaining our position of realistic pragmatism.” M