At the intersection of insurance and technology, insurtech companies are flourishing. According to a recent report by CB Insights, companies in the insurtech sector raised approximately $6.35 billion in private funding in 314 deals in 2019, globally. 2019 accounted for approximately 33.9% of all investments to date in insurtech companies. Private capital raises by property and casualty-focused insurtech companies comprised 63% of deals in 2019, while private capital raises for life and health insurance subsector accounted for 37% of deals.

Late-stage financings by insurtech companies increased by 47% in 2019, by number of deals, and increased 226%, by amount of capital raised. The last quarter of 2019 also saw four mega rounds, or rounds of over $100 million or more, completed by insurtech companies, noted the report. There are now ten insurtech unicorns, private companies valued at over $1 billion, five of which were created in 2019.

The number of strategic investments by reinsurers into private tech companies has also been gradually increasing over the years. In 2019, there were 133 investments by reinsurers into tech companies, compared to just 29 deals in 2014. 56% of these investments have been in the United States.

According to the report, approximately 184 insurtech companies have ceased operations over the last three years. While there are many reasons that may have led to this result, the report suggests that many insurtech companies receive large injections of capital, without enough market demand. This divergence between private and public valuations continues to affect companies outside of the insurtech sector as well.

Visit us at

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2020. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.