According to a new report from Gallagher Re, global InsurTech funding was $1.01 billion in Q3 2025, down 7.3% from the $1.09 billion recorded in the prior quarter.
Gallagher Re observed a marked drop in deal count, with just 76 deals in Q3 2025, the lowest total since Q2 2020.
Overall, quarterly funding has reportedly totalled around $1.1 billion on average for 11 consecutive quarters.
Gallagher Re’s data has suggested that seven of the 11 quarters have recorded a funding total within a 20% swing of this mean average, and ten of the 11 quarters have recorded a funding total within a 30% swing.
Early-stage InsurTech funding also reportedly increased 6.8% in Q3 2025 compared with the same quarter of 2024, while almost three-quarters (74.8%) of InsurTech funding went to AI-centred companies.
“While the data underlying this trend has only been recorded in the past three years, there are signs that this consistency of investment could continue, such as an ongoing lack of mega-round funding, the closeness of individual deal totals to the mean average deal, and a shift towards investments into business models that support incumbents, rather than investing in startups designed to compete with them for customers,” the firm’s new report explained.
Global Head of InsurTech at Gallagher Re, Andrew Johnston, added, “Investor strategy has shifted away from massive, high-risk bets on a few companies to a more balanced approach.
“While the huge ‘winner-takes-all’ funding rounds are less common, the underlying market is still very active, shown by strong deal flow and early-stage funding volatility. This signals that while the appetite for pure venture risk is alive.”
Notably, commercial-focussed InsurTechs raised 470.7 million in funding over Q3 2025.
In fact, of the more than $60 billion that has been invested into InsurTechs since 2012, Gallagher Re estimates that around $9.3 billion has been invested into commercial-related InsurTech companies globally.
Gallagher Re’s report continued:
“Commercial insurance has evolved significantly over the past decade. In addition to commercial property, liability and workers’ compensation, the commercial insurance landscape now includes cyber, employee health insurance, gig economy/episodic coverage, pay-as-you-go coverage and the rise of coverage for assets that are used both personally and commercially.
“The line between personal lines and commercial lines is also blurring as the expectations of small business owners mirror those of individual consumers. The result is both InsurTechs and incumbent carriers adopting more of a D2C playbook, using tech to build omnichannel distribution models and increase customer engagement.”
Gallagher Re highlighted several key AI applications in commercial insurance, including extracting data from unstructured documents to give underwriters faster access to more information, validating insurance applications more accurately to reduce risk and fraud, and detecting patterns across portfolios to flag potential issues or poor underwriting decisions.
The firm’s report went on, “In commercial underwriting, the greatest impact comes from the use of workflow-enhancing AI tools, which can facilitate decision-support for human underwriters while also removing the labour-intensive but low-value-adding tasks (such as looking for generic outliers); freeing up underwriters to focus on complex risk judgments and relationship development.”
