After several years of contraction and recalibration, the global InsurTech market has entered a new phase of measured recovery. According to the Global InsurTech Report – Q4 2025, published by Gallagher Re in collaboration with Gallagher and CB Insights, total InsurTech funding rose 19.5% y-o-y to USD 5.08 billion in 2025 - the first annual increase since 2021.

Momentum accelerated in Q4 2025, with funding jumping 66.8%, to USD 1.68 billion in Q4. While overall deal count grew modestly (up 6.4%), average deal size increased by 14% to USD 15.79 million, supported by a near doubling of USD 100 million-plus mega-rounds. The recovery is not explosive, but it is unmistakably deliberate.

AI: From Buzzword to Capital Magnet

Artificial intelligence is no longer a side theme in insurance innovation - it is the core narrative. Two-thirds of all InsurTech funding in 2025 flowed to AI-focused companies, accounting for more than USD 3.3 billion across nearly 230 deals. In fact, approximately three-quarters of InsurTech funding now goes to businesses that position themselves as AI-driven.

The report goes further, suggesting that over time, InsurTech and AI may become virtually synonymous. Yet beneath the enthusiasm lies a sober reminder: technological revolutions follow cycles. The real strategic challenge is not deploying AI, but ensuring that efficiency gains translate into sustained productivity and profitable growth.

P&C Leads the Recovery

The rebound was most pronounced in property and casualty, where funding climbed 34.9% y-o-y to USD 3.49 billion. Life and health funding saw a slight decline in 2025, although cumulative investment remains substantial: since 2012, approximately USD 25.2 billion has been invested globally into L&H InsurTech companies.

Importantly, capital allocation is shifting. Investors are favoring “data-dense,” operationally scalable technology providers over tech-enabled brokers or MGAs. The focus has moved from disruption narratives to infrastructure, analytics and integration.

(Re)Insurers Step Forward

One of the most telling signals of maturity is the growing involvement of incumbents. In 2025, (re)insurers made more private technology investments than in any previous year on record, the report reads. InsurTech is increasingly viewed not as competition, but as strategic enablement.

Collaboration, not confrontation, now defines the ecosystem.

AI in Life & Health: Integration Over Disruption

This edition’s thematic focus on AI in Life, Accident and Health insurance illustrates how deeply integration is progressing.

AI is enhancing underwriting through behavioral and genomic insights, supporting prevention-focused wellness models, strengthening compliance oversight in regulated distribution environments, and accelerating claims processes with documented reductions in review times of 30–60%.

Across all applications, one principle stands out: the most effective AI solutions do not eliminate human involvement - they elevate it.

The Bigger Picture

The 2025 InsurTech landscape reflects stabilization, strategic clarity and a transition from experimentation to execution. Funding has rebounded, AI has become structurally embedded in investment decisions, and incumbents are playing a more active role in shaping the ecosystem.

The next chapter will not be defined by hype cycles, but by disciplined implementation - by insurers’ ability to convert technological capability into stronger protection outcomes, deeper customer trust and sustainable growth. InsurTech has entered a more mature era. And AI is no longer optional.

Get the full Global InsurTech Report – Q4 2025 as well as the previous editions here.