Gallagher Re Report: AI's Impact on Q1 2024 InsurTech Funding

There is no hotter topic today than artificial intelligence (AI) and its likely effects on almost every sector of the business world, insurance and reinsurance being no exception.

With that in mind, insurance broker Gallagher Re and CB Insights, a business analytics platform, have collaborated to produce their Global InsurTech Report for Q1 2024.

The 2024 quarterly reports will examine the role of AI in the reinsurance sector, breaking down the function and processes of AI into their relevant parts within the reinsurance value chain. The first report of this series focuses on distribution and sales in the emerging AI market.

Among the report's key findings for Q1 2024 are the following.

• Global InsurTech funding fell to $912.25 million in the quarter, down from $1.103 billion in Q4 2023. This quarter's funding was the lowest since Q1 2020.
• For the first time since Q3 2017, no quarterly mega-round deals worth $100 million or more took place.
• Early-stage InsurTech funding increased by 26.5 percent quarter-over-quarter, countering the broader InsurTech funding picture.
• The average InsurTech deal size fell sharply by 30.6 percent quarter-over-quarter—from $14.14 million in Q4 2023 to $9.81 million in Q1 2024.
• 28 percent of Q1 2024 InsurTech deals went to AI-centered InsurTechs and 50 percent to distribution-focused InsurTechs.
• The majority of tech investments from reinsurers were early-stage (62.2 percent).

Despite these mixed results, "interest and activity do not seem to be slowing, but the average check size written per deal is decreasing," says the report's author, Dr. Andrew Johnston, global head of Gallagher Re InsurTech.