Nov 11, 2025

Insurtech dealmaking is now said to be consolidating, reportedly marked by relatively fewer investors and startups in recent quarters. This, according to an update from CB Insights which noted that overall insurtech funding has plateaued or flattened over the past 12 quarters, including $1.0B in funding that had been secured by insurtechs in Q3’25. Despite this, CB Insights said that the industry’s strongest startups face quite favorable business conditions, as insurtech M&A exits reached “a recent high in Q3’25.” The report also mentioned that median early-stage insurtech deal size has been shrinking, thus “thinning innovation pipeline.” As noted in the research report , Insurtechs are now focused on scaling with less capital “as median early-stage insurtech deal size “fell 24% YoY, from $3.8M in 2024 to $2.9M YTD in 2025.” According to the latest CB Insights update, the sizeable drop reverses “much of the early-stage growth seen between 2023 and 2024, signaling a tougher environment for seed-stage insurtechs looking to raise Series A and B funding.” Meanwhile, the wider venture environment has seen median early-stage deal size increase “39% YoY as investors redirect capital to more AI-driven sectors, including capital-intensive markets like humanoid robots.” Notably, Insurtech ’s early-stage pipeline continues to narrow. In 2025 YTD, merely 60% of all deals have “gone to early-stage startups — the lowest share since 2011 and down from 72% in 2022, 66% in 2023, and 64% in 2024.” Future implication: Reduced early-stage insurtech dealmaking weakens the pipeline for potential acquirers, who will “increasingly need to identify and assess promising acquisition targets earlier than the competition.” Insurtech deal count fell to just 76 in Q3’25 — the “lowest level since 2016 and 65% below the Q1’21 peak of 219 deals.” Both property and casualty (down from 65 to 56 deals) and life and health (34 to 18) saw “quarter-over-quarter declines, reflecting a broader slowdown in the venture environment.” Despite the relatively fewer deals, insurtech funding is generally stable, averaging “$1.2B per quarter since Q4’22, suggesting a more selective environment.” Unless there is a significant surge in deal activity or “a resurgence of $100M+ mega-rounds, funding levels are likely to remain close to $1B per quarter.” Future implication: Incumbents should closely “monitor recently-funded insurtechs, as many exhibit operational strength.” Insurtechs with 10+ employees that “raised in Q3’25 grew headcount 15.8% over 12 months, signaling capital flows to companies with measurable traction.” Investor count peaked in Q2’21 at 655 and has since fallen by “72% to hit 186 in Q3’25, mirroring the broader venture pullback that leaves insurtechs competing in a smaller funding pool.” Commitment to the sector is said to now be waning. In Q3’25, only 4 investors made “2 or more insurtech investments: American Family Ventures, ManchesterStory Group, Munich Re Ventures, and OperaTech Ventures — the fewest in over 10 years, and down sharply from the 13 last quarter.” As stated in the report, established insurance companies (and tech vendors) have a rare opportunity to engage “more closely with emerging insurtechs given reduced competition for attention from investors.” Insurtech M&A increased from 16 in Q2’25 to 21 in Q3’25, the most since Q3’22 (23). The increase reverses the trend of “decreasing M&A activity within insurtech between 2022 and 2024, signaling increased confidence in the industry’s startups.” 5 key acquisitions occurred in Q3’25: Hong Kong-based health insurer and 2024 Insurtech 50 winner Bowtie was acquired in a corporate majority deal by Sun Life. Canada-based cyber MGA BOXX Insurance was acquired by Zurich Insurance Group. Cytora, an AI claims and underwriting processing platform, was acquired by Applied Systems. DigitalOwl, an AI medical review platform and 2024 Insurtech 50 winner, was acquired by Datavant. Italy-based Prima Assicurazioni, a personal lines MGA, was acquired in a corporate majority deal by AXA at a $1.1B valuation. Additionally, risk transfer exchange Accelerant secured $0.7B in its initial public offering. The firm was a 2023 and 2024 Insurtech 50 winner, placing it among the world’s high-potential insurtech startups globally. 2025 is the first time since 2021 that insurtech has seen two straight quarters of IPO activity. Potential future implication: None of the listed acquisitions nor Accelerant finalized a Series C+ prior to exit, indicating that insurtechs “are favoring M&A or IPOs over late-stage fundraising.” Sponsored Links by DQ Promote