According to data from Gallagher Re, global insurtech financing in the fourth quarter of 2025 was US$1.68 billion, an increase of 66.8% from the previous quarter. This is the highest quarterly financing level since the third quarter of 2022. Insurtech investment for the whole year of 2025 increased by nearly 20% year-on-year to US$5.08 billion.
The reinsurance broker’s latest global insurtech report highlights a recovery in industry funding in the final quarter of last year, driven by a rebound in property and casualty insurtech investment, more than 100 insurtech companies raising funds for the first time since the first quarter of 2024, and the return of so-called mega rounds, defined as raising more than $100 million in a single round.
In P&C InsurTech Financing, Gallagher Re highlighted that the amount of financing this quarter increased by 90.5% quarter-on-quarter to US$1.31 billion, driven by huge financings such as CyberCube, ICEYE, Creditas, Federato and Nirvana. These companies received a total of US$662.81 million in funding during the quarter.
In the fourth quarter of 2025, the overall number of transactions increased by 34.2% quarter-on-quarter to 102, and the average transaction size increased by 20% to US$18.84 million.
Early-stage funding also reached an 11-quarter high in the fourth quarter of 2025, rising to $403.09 million from $277.65 million in the third quarter, with contributions from P&C and L&H.
The main reason for the strong growth in overall funding throughout 2025 is that the number of mega-round deals almost doubled, from 6 to 11. Gallagher Re reported that mega-round financing in U.S. dollars also increased 53.2% year-on-year to $1.43 billion.
Interestingly, Gallagher Re found that insurers and reinsurers will invest more in insurtech in 2025 than any other year on record, with 162 deals announced.
“This shows that (re)insurers are not only more willing to invest, but that they see insurtech as a way forward for their strategies,” the company said.
As AI continues to evolve and impact industries of all types and sizes, two-thirds of insurtech funding in 2025 will go to AI-focused companies, accounting for nearly $3.3 billion across nearly 230 deals.
In fact, AI-focused insurtechs raised $1.31 billion across 66 deals in Q4’25, with an average deal size of $22.14 million, slightly above the overall average in Q4’25. Throughout 2025, AI-focused insurtech companies raised $3.35 billion across 227 deals, accounting for 66% of funding and 62% of deals.
Andrew Johnston, global head of insurtech at Gallagher Re, said: “Artificial intelligence is undoubtedly the focus of the contemporary insurtech world. Over time, we are seeing the convergence of AI and insurtech to such an extent that the two may well become synonymous.
“The long-term question that industry must now consider is the ‘so what’ question: as the implementation of AI begins to deliver efficiency gains, industry must figure out how to best utilize all of this newly freed up time and/or resources.”
Freddie Scarratt, global deputy head of insurtech at Gallagher Re, added: “Historically, the industry has taken a measured approach to innovation, relying on established actuarial tables and thorough underwriting processes to ensure stability.
“However, recent developments suggest that the industry is shifting from incremental evolution to accelerated adoption of advanced technologies.”
