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Insurtech investments down 54% in March quarter

Life insurance startups saw their share of total and early-stage funding to insurtechs shrink, as total investment in the sector dropped in the March quarter.

Insurtechs attracted US$912 million in the first quarter across the globe but the deal activity slowed down significantly after January, according to Willis Towers Watsons.

"The year 2020 began on the same trajectory on which the previous year concluded. By January 3, almost US$82 million had been raised; by February 6, that figure was just over US$450 million. But it took until the end of March — the rest of the quarter — to double that amount," WTW said.

"In short, almost half of the total amount raised in Q1 was raised in the first 35 days of a 91-day quarter. From March 10 to quarter-end, "only" an additional US$108 million was raised. Again, in short, the first three days of Q1 saw almost the same amount of money raised as the last three weeks of Q1."

WTW divides insurance/reinsurance businesses into four main areas of focus: auto, property, commercial, and life, accident and health.

This quarter, property and casualty (P&C) Insurtechs widened their share of total and early-stage funding to over 80% compared with life and health (L&H) Insurtechs.

Meanwhile, P&C Insurtechs raised 83% of total funding.

"The investment split between P&C and L&H Insurtech funding is the largest we have observed since Q3 2016," WTW said.

"...One could argue that, again, COVID-19 is a likely culprit for this stark disparity between P&C and L&H."

Read more: insurtechinsuranceWillis Towers Watsons
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