Insurtech could sure use a payout.
VC investment in the sector is at multi-year lows—with total deal value falling 40% in Q1 2024 from the previous quarter, and $771 million invested across 92 deals, according to PitchBook data.
Still, several insurtech startups have secured large fundraising rounds in recent months. Insurance benefits specialist SmartHR raised a $140 million Series E in June. Cover Genius, an embedded insurance provider that partners with consumer brands, raised an $80 million Series E, also in June.
One small but growing insurtech segment is administration and claims—startups focusing on policy servicing, billing, cost assessment and settlement. As traditional insurers continue their digital transition and look to cut costs and increase output, the space is poised for growth.
The market map below explores the growing segment. Click on the teal tile for more details.
To go deeper, read our Q1 2024 Insurtech Report. PitchBook customers can also explore the full market map with data on more than 1,500 companies.
Spotlight: Administration and claims
PitchBook analysts have broken out administration and claims into three categories:
- Claims and settlements: Startups offering services to simplify the claims-filing process through automation.
- Policy servicing: Technology for document creation and storage, customer communications, and policy renewal management.
- Billing and collection: Platforms and services focused on premiums, claims reconciliation and payment reporting.
VC dealmaking in the insurtech industry has been mostly flat the past six quarters. 2023 marked a continued decline for the space with $5.9 billion invested across 494 deals. At the sector’s peak in 2021, $16.6 billion was deployed across 840 deals.
In Q1, the administration and claims segment raised $85.3 million from 19 deals, an increase from the previous quarter’s total of $66.1 million generated from 11 deals.
Sidecar Health, a digital insurance provider, raised a $165 million Series D in June. In April Iceye, a digital satellite specialist that offers disaster monitoring services for insurance companies, raised a $93 million growth round.
Exits have stalled against the backdrop of a difficult IPO environment. Q1 saw a total value of $747 million from 11 exits. A large portion can be attributed to the $427 million acquisition of cyber insurtech startup Corvus by Travelers, which closed in January.
With the IPO window still mostly closed, more insurtech startups are being acquired. In April Hug Hub, a digital platform provider for insurance brokers, was acquired for an undisclosed amount by insurance software company Open GI. In January, White Mountains Insurance Group closed its $296.7 million acquisition of digital insurance carrier Bamboo.
Featured image by Drew Sanders/PitchBook News
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