Insurtech funding surpasses 2018 total in just three quarters - Business Insider

Willis Towers Watson. Last quarter, insurtechs scooped up $1.5 billion with 83 deals, marking a 6% and 20% quarterly increase in funding and deal number, respectively.Seed and Series A funding picked up slightly but is still dwarfed by previous numbers. In Q3 2019, early stage insurtechs secured $161 million in funding, up 6% from $147 million in the previous quarter.

Similar to Q2 2019, funding was largely fueled by four mega-rounds. US-based Root's $350 million Series E+ round was the largest last quarter, followed by a $200 million investment in US-based Gusto, India-based Policy Bazaar picking up $130 million, and US-based Hippo securing a $100 million Series D round. In total, these rounds amounted to around 52% of the total funding.

Moving forward, larger insurtechs will likely continue to attract the big bulk of total funding, but there's hope for smaller players. As investors bet on the same companies to further fuel their growth and see a return on their investments, we'll probably see funding in established players accelerate.

However, not all hope is lost for smaller insurtechs: Reinsurers and insurers continue to be interested in enhancing their tech capabilities, and this might be a good niche for new entrants to focus on. Reinsurers and insurers inked 19 partnerships last quarter, the same amount as in Q2 2019: Nationwide partnered with Bold Penguin to enhance its product underwriting, while USAA started working with Google Cloud to speed up claims management by using machine learning, for example.

Hence, smaller players focusing on business-to-business operations will continue to see interest from incumbents as they aim to revamp their businesses to better compete with business-to-consumer insurtechs., Business Insider Intelligence's expert product suite tailored for today's decision-makers in the financial services industry, delivered to your inbox 6x a week. >>

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