Insurtech Funding Reaches New Peak as AI Leads Q2 Investments
Insurtech continues to attract significant capital, with the second quarter of 2025 marking a key milestone. Gallagher Re's latest Global Insurtech Report reveals that since 2012, the sector has raised a cumulative total of $60.8 billion worldwide. This growth reflects the sector’s ongoing influence and the strong appeal of technological innovation within insurance.
AI-related technologies have captured a large share of this investment, receiving approximately 25% of total funding. Demand for AI remains high as investors focus on automation, data-driven underwriting, and predictive modeling, both within insurance and across other industries.
Property Insurance Market Growth and Challenges
The property insurance market is projected to grow at a compound annual growth rate exceeding 8% between 2024 and 2028, based on data from GlobalData. This growth occurs amid a backdrop of increasing losses, which are driving insurers to adopt smarter technologies for risk assessment and claims management.
Q2 Funding Trends and AI’s Role
In Q2 2025, global insurtech funding declined 16.7% quarter-over-quarter to $1.09 billion, marking the lowest funding level for property and casualty insurtechs since early 2018. Deal sizes dropped by 18.7% to an average of $12.83 million, with the number of deals decreasing 6.2% to 91.
Despite this dip, AI-focused companies still made up a dominant 61.2% of total deal value in Q1, sustaining investor interest into Q2. These AI-centric firms accounted for 57.1% of all insurtech deals during the second quarter, underlining continued confidence in technologies that support automation and predictive analytics.
Early-Stage Insurtechs and Regional Activity
Early-stage insurtech companies saw a funding rebound in Q2, raising $259.7 million after a near five-year low in the previous quarter. The US increased its share of deal activity, with insurtech deal participation rising by 11.7% quarter-over-quarter, reaching a nine-year high.
Funding for property-focused insurtechs hit $191.12 million, highlighting the growing integration of AI in weather-related and climate risk insurance solutions. This aligns with the sector’s focus on automating and refining underwriting processes to respond better to evolving risks.
What This Means for Insurance Professionals
For those working in insurance, these funding trends emphasize the importance of AI and automation in future product development and risk management. Staying informed about AI applications can provide a competitive edge, particularly in property insurance where losses continue to rise.
Professionals interested in expanding their AI skills can explore specialized courses that focus on AI-driven automation and data analytics in insurance. These resources help build practical expertise relevant to current market demands.
Your membership also unlocks:
