Gallagher Re Explores AI's Role in Third-Quarter 2024 InsurTech Advancements

Gallagher Re's Q3 2024 Global InsurTech Report explores the role of artificial intelligence (AI) within central business operations of the (re)insurance industry. This third installment of the report series highlights key InsurTech trends, significant deals, and AI's transformative potential in policy administration, tax processing, and other operational functions.

According to Gallagher Re, global InsurTech funding in the third quarter of 2024 reached $1.38 billion, the highest level since the first quarter of 2023. Notably, 55.5 percent of this funding went to $100 million-plus megaround deals, reflecting a resurgence in large-scale investments. However, the total number of deals declined to 77—a nearly 4-year low—indicating a focus on fewer but larger investments.

Per the report, AI-centered InsurTechs accounted for 63.4 percent of all deals in the third quarter, underscoring the industry's growing reliance on AI to drive innovation. Central business operations received 54.5 percent of these deals, with a significant portion directed toward policy administration systems (PAS). Gallagher Re emphasized the critical role of PAS in managing insurance policies throughout their life cycle, from issuance to renewal or claim resolution.

Gallagher Re noted that the majority of (re)insurer tech investments in the third quarter were midstage funding rounds, including 11 Series B and 8 Series C deals. This marks the first time since the third quarter of 2021 that midstage investments surpassed early-stage funding, suggesting a shift toward supporting more established start-ups.

Highlighting AI's operational applications, the report detailed advancements in data management, such as AI-driven document analysis and sentiment recognition, which streamline back-office processes. Gallagher Re also discussed emerging challenges, including managing biases in AI algorithms and ensuring data transparency, both critical for maintaining trust in AI-driven systems.