Investors pumped about $US5.08 billion ($7.17 billion) into insurance start-ups worldwide last year, up 19.5% on 2024, according to Gallagher Re.

Last year’s total marked the first annual increase since 2021 and was “a notable rebound in insurtech funding overall”, the reinsurance broker’s fourth-quarter sector report says.

A 66.8% rise in quarter-on-quarter investments to $US1.68 billion ($2.37 billion) contributed to the increase.

Property and casualty investments grew 34.9% to $US3.49 billion ($4.92 billion) last year. The fourth quarter recorded a 90.5% surge to $US1.31 billion ($1.84 billion), compared with July-September.

The report says artificial intelligence is “squarely the focus” in insurtech.

About two-thirds of last year’s funding went to companies centred on AI – more than $US3.3 billion ($4.65 billion) across almost 230 deals.

“In our Q3 report, we showed that approximately three-quarters of all funding is now going into insurtech businesses that associate themselves with the AI label,” the report says.

“We do not see this trend slowing down. In fact, we see AI becoming so integrated into insurtech over time that the two may well become effectively synonymous – in much the same way as we could already argue that ‘insurtech’ is itself a meaningless label, because all insurers are technology businesses now.”

The report says Peak3, a Singapore insurtech, will expand its AI team and solutions portfolio while building localised capabilities to support market entries such as in Australia.