Insurtech funding hits four-year high on AI megadeals

Insurtech funding reached $2.44 billion in Q2 (April–June), the highest quarterly total in four years, according to a report from reinsurer Gallagher Re. The quarter recorded 107 deals and AI-focused companies received $2.42 billion, equivalent to 99.1% of the period’s funding.

Early-stage investment declined from $548 million in Q1 to $265 million in Q2 across 54 deals. The average early-stage deal size fell 50.6% quarter-on-quarter, from $14 million to $6.95 million. Late-stage megadeals pushed total funding higher while smaller rounds contracted.

Gallagher Re links the concentration of capital in AI-focused insurtechs to rapid growth in data centre capacity needed to run AI workloads. The report cites a McKinsey projection that global investment in the data centre sector could reach $6.7 trillion by 2030, with roughly $5.2 trillion directed to AI workloads.

The report highlights insurance challenges associated with fast-paced data centre development and high-value AI hardware. It notes that ‘data centers do not present just property losses’ and that multiple exposures can sit ‘under one roof’ — including construction risks, procurement and transport of chips and boards, and the risk of operational disruption and consequent business interruption.

The Q2 figures show investors allocated most capital to larger, AI-related propositions while early-stage funding and average small-round sizes fell. Gallagher Re’s data connects recent insurtech capital flows to growth in AI infrastructure and data centre projects.