Global insurtech funding totalled $US1.01 billion ($1.57 billion) in the third quarter, down 8% from the second quarter.

A year earlier, funding was $US1.38 billion ($2.14 billion), according to Gallagher Re’s latest industry report.

There were 76 third-quarter deals – the lowest number in almost five years – and just 186 active insurtech investors, the lowest since the last quarter of 2017.

Gallagher Re global head of insurtech Andrew Johnston says funding has been about $US1.1 billion ($1.70 billion) for 11 consecutive quarters.

“This most recent quarter has shown a continuation of the steady trend in funding volume that we have observed over the past few years,” he said. 

“Despite a small quarter-on-quarter decline, global insurtech funding was within a 10% marginal swing of the mean average we have been observing over the past three years. There was a marked drop in deal count, however.”

Life and health insurtechs attracted just 18 deals – the fewest in seven years – and funding fell 57% from the previous quarter.

The property and casualty deal count was relatively steady at 58 and funding surged 91% from a more than seven-year low in Q2, to $US690.28 million ($1.07 billion).

Mr Johnston says an insurtech funding pattern is emerging that has “been almost three years in the making”. It includes few mega-round deals of more than $US100 million ($155.54 million) and a “general pivot among insurtechs towards business models that enhance and enable incumbents, and away from competing with them directly”.

Investor strategy has shifted away from “massive, high-risk bets on a few companies”.

“While the huge ‘winner takes all’ funding rounds are less common, the underlying market is still very active ... Funding for growth-stage companies is maturing and becoming more selective,” Mr Johnston said.

Gallagher Re says quarterly fundraising amounts have ranged from $US912 million ($1.41 billion) to $US5.3 billion ($8.22 billion) over the past 13 years.