The global InsurTech sector has reached a new funding milestone, with more than $60 billion raised and invested since 2012, according to Gallagher Re’s latest Global InsurTech Report. While significant, the figure is overshadowed by the scale of investment in artificial intelligence (AI), which has attracted $1.6 trillion globally since 2013, based on a Stanford University study.
AI’s Growing Role in Insurance
Andrew Johnston, global head of InsurTech at Gallagher Re, noted that while some skepticism about AI remains—particularly in reinsurance—it is emerging as a transformative force. The report found that 57.1% of InsurTech deals in the second quarter of 2025 involved AI-focused companies.
Johnston emphasized that InsurTech firms must showcase effective use cases for AI to benefit consumers and remain competitive. AI tools, the report said, are proving valuable for efficiency gains and automating repetitive tasks, allowing professionals to focus on higher-value work.
Venture Capital Trends and Competition
The first quarter of 2025 saw a rise in venture capital and private equity activity, with Silicon Valley investors accounting for one in five global InsurTech deals. Gallagher Re’s report links this to the region’s access to top-tier tech talent and investor optimism about AI’s potential returns—factors that could lead to funding levels similar to those seen in 2020 and 2021.
Infrastructure, Talent, and Ethics in AI Adoption
Freddie Scarratt, global deputy head of InsurTech at Gallagher Re, stressed the importance of building robust data infrastructure and governance frameworks to handle AI’s demands. He said investing in AI talent—through hiring, training, and partnerships—will be key, as will addressing AI-related risks.
The report also highlighted the need for fairness in AI-driven underwriting and claims decisions, ongoing engagement with regulators, and collaboration with academic and research institutions to develop best practices.
AI as an Augmenting Force
Gallagher Re’s analysis concluded that AI will not replace the expertise of human underwriters, actuaries, or claims professionals but will enhance their capabilities. Effective integration of AI into processes such as risk assessment, pricing, claims management, and capital allocation is expected to become a competitive differentiator, particularly for property reinsurers, in the coming years.
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