Global investments in the insurtech sector hit a new quarterly high of US $ 2.55 billion in the first quarter of 2021.
The number of mega-towers has reached eight, more than any other three-month period, according to Willis Towers Watson’s new quarterly InsurTech newsletter.
Total funding in the quarter increased 180% from the first quarter of 2020, which declined due to COVID-19. The latest total was up 22% from the more comparable fourth quarter 2020, while the number of discrete transactions climbed 42% higher than in the previous quarter.
Investments were mainly driven by companies focused on non-life insurance, which accounted for 69% of the share of transactions.
Eight companies represented more than $ 1.13 billion in funding during the quarter, or 44% of the total raised. This marks a new quarterly high for the number of mega-round fundraisers of $ 100 million or more. Next Insurance, Coalition, Zego, Sidecar Health, Pie Insurance, Clarify Health, Corvus Insurance Agency, and TypTap all raised money at or above the threshold, propelling Coalition and Zego to billion-plus “unicorn” status.
“This quarter’s record level of activity reflects our industry’s growing drive to engage and embrace technology, which continues to grow at an unprecedented rate,” said Dr. Andrew Johnston, Global Head of InsurTech at Willis Re.
Johnston said that “COVID-19, more than any other factor, has quickly accelerated the change” that was already well underway.
Along with the unicorn creation cycles, there was a 13 percentage point increase in startup transactions from Q4 2020. Willis found that 60% of investments in Q1 2021 were Series A or Series fundraisers. B.
Insurtech’s global footprint also grew over what was the most geographically diverse set of start-ups in a single quarter, spanning 24 countries including Bangladesh, Estonia, Brazil, Nigeria and the United Arab Emirates.
According to Johnston, the products offered by insurtechs must have “intellectual and business sense” for their target users, whether they are insurers, brokers or buyers of insurance. “Unfortunately,” he added, “the inability to understand” this, in addition to the general difficulty of entering an industry as a fledgling business, means that many insurtechs “will probably never reach the top. greatness of their aspirations. “
Source: Wills Towers Watson
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