At the intersection of insurance and technology, insurtech companies are flourishing. According to a recent report by CB Insights, companies in the insurtech sector raised approximately $6.35 billion in private funding in 314 deals in 2019, globally. 2019 accounted for approximately 33.9% of all investments to date in insurtech companies. Private capital raises by property and casualty-focused insurtech companies comprised 63% of deals in 2019, while private capital raises for life and health insurance subsector accounted for 37% of deals.
Late-stage financings by insurtech companies increased by 47% in 2019, by number of deals, and increased 226%, by amount of capital raised. The last quarter of 2019 also saw four mega rounds, or rounds of over $100 million or more, completed by insurtech companies, noted the report. There are now ten insurtech unicorns, private companies valued at over $1 billion, five of which were created in 2019.
The number of strategic investments by reinsurers into private tech companies has also been gradually increasing over the years. In 2019, there were 133 investments by reinsurers into tech companies, compared to just 29 deals in 2014. 56% of these investments have been in the United States.
According to the report, approximately 184 insurtech companies have ceased operations over the last three years. While there are many reasons that may have led to this result, the report suggests that many insurtech companies receive large injections of capital, without enough market demand. This divergence between private and public valuations continues to affect companies outside of the insurtech sector as well.