CB Insights – State of Insurtech, FY 2023

In 2023, the insurtech industry experienced a challenging year with a decrease in funding and deals, reflecting the overall slowdown in venture capital. However, early-stage insurtech startups displayed some resilience, with the median deal size remaining stable compared to the previous year. Despite the funding challenges, insurtechs continued to attract interest from strategic investors and acquirers. In the fourth quarter of 2023, notable investments and acquisitions included Allianz and Allstate's venture arms investing $265 million in Next Insurance, Travelers acquiring Corvus Insurance for $435 million, and Sumitomo Life taking a majority stake in Singlife at a valuation of $3.4 billion. Key findings from a comprehensive analysis of the insurtech industry include: - Global insurtech funding reached its lowest level since 2017, totaling $4.6 billion in 2023, a significant drop of 45% compared to 2022's $8.3 billion. - The decline in funding was primarily driven by a lack of mega-rounds exceeding $100 million, with insurtech mega-round funding and deals dropping by 64% and 63%, respectively, between 2022 and 2023. - Quarterly insurtech deals saw a decline of over 50% from their peak in the second quarter of 2021. In Q4 2023, only 100 global insurtech deals were recorded, a significant decrease from the high number seen in mid-2021. - Early-stage insurtech deal sizes remained steady at $3 million in 2023. However, the share of early-stage deals decreased to 62%, marking a 5-year low after reaching 70% in 2022. - The United States regained the majority share of insurtech deals among global regions in 2023, with a 51% deal share surpassing the 50% mark for the first time since 2020.