Can insurtech recover from the "death of insurtech 1.0"?

Many startup sectors emerged from the hype of 2021 with a massive hangover in the form of valuations they simply couldn't justify as the market dipped and dipped . Insurtech startups had the worst of it, however, as investors began to question the viability of the entire category.

A recent industry report from Dealroom, Mundi Ventures, MAPFRE, NN Group and Generali calls this disillusionment "the death of Insurtech 1.0".

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This demise began in 2022, when “a broad-based market downturn, coupled with clear specific challenges of notable insurtech[s] to achieve profitability,” helped create a challenging new environment for the funding of insurtech, according to the report.

This difficult environment is also reflected in this year's data: public insurtechs are struggling and there has been a sharp decline in venture capital flows into the sector.

But money is like water when it comes to venture capital. Despite all the bad news, capital is still flowing into certain pockets of insurtech that are considered sufficiently different from the first wave of companies.

This morning, let's take a look at what's happening with global insurtech startups and see if we can spot some light in this murky swamp in which many insurtech companies are lost.