InsurTech fundraising rebounds as US$1.5+ billion invested in Q2 2020; four more ‘mega-rounds’ completed

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[{"type":"text","content":"LONDON, July 28, 2020 (GLOBE NEWSWIRE) -- Following the COVID-19-induced slowdown in global InsurTech investment during the first months of 2020, $1.56 billion was raised by InsurTech firms in Q2. The total, up 71% over Q1, was driven in part by later-stage investments, including four ‘mega-rounds’ in excess of US$100 million, according to the new Quarterly InsurTech Briefing from Willis Towers Watson, a leading global advisory, broking and solutions company (NASDAQ: WLTW).\n At 74, deal count was down 23% from Q1, but many individual rounds were larger as investors continued to turn away from Seed and Angel deals in favour of support for more mature ventures. P&C sector investments predominated, accounting for 68% of funding, but the share of L&H sector investments was up 17 points to 32%, as the pandemic crisis continues to compound the value of technology, and particularly telehealth, in the segment. Also notable was the initial public offering of Lemonade and the acquisition of two incumbent insurance companies by InsurTechs, Hippo and Buckle. Deals were struck in a record-breaking 25 countries, including newcomers such as Taiwan, Croatia, and Hungary. Seed and Series A financing hit a record low, at just 42% of deals. Series A deals were flat, but Series C deals accounted for 11% of deals, up from 6% the previous quarter. Distribution-focused start-ups saw an 11-point rise in deal share, while B2B companies reduced their share by nine points. New (re)insurer partnerships reached a record high of 34 deals, up four from Q1 2020. Dr Andrew Johnston, global head of InsurTech at Willis Re, said: “While InsurTech investment clearly rebounded in Q2, and the trend towards greater commitments to later-stage fundraisings continues, we should be cautious and not read too much into the general state of the global InsurTech market based on this quarter alone. In the short term, investment confidence will test the status quo, especially for highly leveraged InsurTechs. Similarly, certain risks and their associated vectors have changed fundamentally and so the impact of that is yet to be truly felt. It is quite possible that we will observe a general slowing down of InsurTech activity as a result. In the medium term, changing risk classes may be better understood alongside rising consumer optimism, but the true economic impact of COVID-19...

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