Global funding for insurtechs fell to $US912.25 million ($1.38 billion) in the first quarter, the lowest sum since early 2020, according to Gallagher Re. 

The total was down 17% from the previous three months, and there were no “mega-round” deals of more than $US100 million ($151.26 million) for the first time since late 2017. 

Funds raised by property and casualty insurtechs came to just $US605.58 million ($916.03 million), the lowest injection since July-September 2018.

Bucking the downward trend was early stage insurtech funding, which jumped 27% quarter on quarter. Most investment coughed up by insurers was early stage. 

“Interest and activity do not seem to be slowing but the average cheque size being written per deal is decreasing,” Gallagher Re Global Head of Insurtech Andrew Johnston said. 

The average deal size fell 31% quarter on quarter to $US9.81 million ($14.84 million), the first drop below $US10 million ($15.12 million) since the third quarter of 2017.

Artificial intelligence-centred or distribution-focused insurtechs attracted most funding. 

The number of deals rose to 107 in the quarter from 100 in the preceding three months. 

Mr Johnston says about $US55 billion ($83.2 billion) has been invested into insurtech worldwide so far. 

“Has $US55 billion of value been added to the industry? Probably not, but the alternative of doing nothing is unthinkable,” he said. 

“Whatever the cost, the industry has got to remain relevant, and the adoption of technology (through insurtech or other sources) is not a nice to have. It is a necessity. 

“While operating expenses for insurers have not gone down, the processes have largely been improved. 

“At some point, we will hit the tipping point that truly justifies the journey we are on.”