Global reinsurance brokerage and analytics firm Gallagher Re reports that global insurtech funding continued to remain at relatively high levels in the first quarter of 2026, as outlined in its latest report Global Insurtech Report.
The company’s total investments for the quarter were $1.63 billion. Gallagher Re said that although slightly lower than the $1.67 billion in the fourth quarter of 2025, these consecutive quarters represent the strongest financing activity since the third quarter of 2022, indicating that investor interest continues to improve across the industry.
According to Gallagher Re, AI-tagged insurtechs accounted for the vast majority of capital deployed during this period. These companies received 95.2% of total funding, the highest proportion on record to date.
Gallagher Re said AI-focused companies raised $1.55 billion across 68 deals, with an average deal size of $25.79 million, exceeding the overall insurtech average. The company also noted that each of the ten largest funding rounds in the first quarter of 2026 involved companies focused on artificial intelligence.
Gallagher Re identified several notable changes in financing activity during the quarter. Early-stage investment increased significantly, with a quarter-on-quarter increase of 36.1%, reaching US$548.5 million, the highest level since the third quarter of 2022.
The average size of early-stage deals also expanded significantly, up 278.8% year-on-year to $14.06 million. In addition, Gallagher Re reported that life and health insurtech financing nearly doubled month-on-month to $718.99 million, supported by a series of larger transactions. By comparison, property and casualty insurtech funding fell 31% over the same period to $907.14 million, but the average deal size remained at $20.2 million.
Andrew Johnston, global head of insurtech at Gallagher Re, commented: “Q4 2025 and Q1 2026 were the highest quarters for global insurtech funding since Q3 2022, bucking the current three-year trend of around $1 billion in quarterly funding.
“This is further evidence that capital is flowing back into the space – strikingly, 95.2% of insurtech funding in Q1 2026 went to AI tagging companies, underscoring the industry’s commitment to this transformative technology.”
Gallagher Re further observed that the distinction between AI and insurtech is becoming less clear, with most new companies and solutions positioning themselves as AI-enabled. Since 2012, digital and cyber risk-focused businesses have raised $5.77 billion across 263 deals. Gallagher Re noted that insurtech related to artificial intelligence liability and cyber insurance attracted $444.84 million in funding in the first quarter of 2026 alone.
Johnston added: “AI and insurtech are now almost synonymous. As an industry, we must embrace the opportunities that AI presents while addressing the challenges it presents. The future of AI liability insurance is not yet here; it is already here and we need to lead it.”
Gallagher Re explained that this latest report marks the beginning of the final year of its three-year series of research on artificial intelligence in the insurtech space. While previous editions in 2024 and 2025 considered AI applications across the insurance value chain and their impact on core business lines, the 2026 series turns attention to future developments. This includes a focus on AI liability insurance and its connection to the growing cyber insurance market, Gallagher Re said.
The company describes AI liability insurance as a form of protection designed to cover financial losses resulting from the use of AI systems, particularly in areas such as healthcare, financial services and autonomous vehicles.
Gallagher Re highlighted that increasing adoption is expected to drive demand for such specialist insurance. Organizations deploying AI face a range of different risks, including algorithmic bias, data quality issues, and liability arising from automated decision-making. Gallagher Re noted that these challenges are prompting insurers to develop new products, endorsements and exclusions for AI-related risks.
Freddie Scarratt, global deputy head of insurtech at Gallagher Re, said: “AI is advancing at an alarming rate, but it brings new risks and opportunities. The emerging landscape of third-party AI liability insurance is more than a fun sideline; it is a fast-growing necessity, poised to reflect the explosive growth we are witnessing in the cyber reinsurance market. The silent risks of AI are becoming loud and clear, and ignoring it is no longer an option.”
Looking ahead, Gallagher Re said the insurance and reinsurance markets will need to deal with the impact of artificial intelligence. The company recommends that insurance companies should strengthen data governance practices, ensure continuous assessment and monitoring of AI systems, and design targeted solutions to address emerging risks.
Gallagher Re expects AI liability insurance to develop along a similar path to cyber insurance, gradually moving away from exclusions and endorsements toward more specialized, stand-alone policies as the market matures.
