Gallagher Re Reports Surge in InsurTech Funding with Auto, Motor Segment in Focus

According to Gallagher Re's Global InsurTech Report Q1 2025—Auto/Motor, global InsurTech funding jumped 90.2 percent quarter-over-quarter to $1.31 billion, marking a significant rebound in investment activity. The report, produced in collaboration with Gallagher and CB Insights, focuses on the auto/motor segment—both personal and commercial—which is the first major property-casualty (P&C) business line assessed in Gallagher Re's 2025 series. 

Per Gallagher Re, the auto/motor line has historically drawn significant attention from InsurTech investors, with $13.13 billion committed to the segment across 633 deals since 2012. In the first quarter of 2025 alone, auto-focused InsurTechs raised $428.78 million, including two of the five largest deals of the quarter: Wefox ($83 million) and Nirvana ($80 million). 

According to the report, P&C InsurTechs raised $1.13 billion in the first quarter of 2025—their highest funding level since Q3 2022—driven by nine of the ten largest deals in the quarter. Three P&C InsurTechs secured USD 100M+ mega-rounds: Quantexa (USD 175 million), Openly (USD 123 million), and Instabase (USD 100 million). 

Gallagher Re said that while overall funding rose, early-stage InsurTech investment hit a 5-year low, totaling just $170.79 million. The average early-stage deal size dropped to $3.71 million, partly due to an increase in deal count from 41 in the fourth quarter of 2024 to 51 in the first quarter of 2025. 

Artificial intelligence (AI) continues to play a central role in InsurTech development. According to Gallagher Re, AI-centered InsurTechs accounted for 61.2 percent of first-quarter 2025 deals, raising $710.86 million across 60 transactions. Applications ranged from property-risk platforms and "AI co-workers" to automated workflow tools. 

Per the report, strategic activity also intensified, with Munich Re's acquisition of Next Insurance at a $2.6 billion valuation being a standout. Other deals included Guidewire's acquisition of pricing software firm Quantee and SIAA's acquisition of DONNA.ai. 

Gallagher Re noted that the United States led first-quarter 2025 global InsurTech deal activity, accounting for 58.8 percent of all transactions—the highest since the third quarter of 2017. Among (re)insurers, the Blue Venture Fund led with five tech investments, followed by MassMutual Ventures, Mitsui Sumitomo Insurance Venture Capital, Munich Re Ventures, and TruStage Ventures. 

Auto/motor InsurTechs continue to innovate across pricing, underwriting, and claims, supported by telematics, mobile data, and AI. According to Gallagher Re, many solutions leverage built-in vehicle sensors and mobile phones to generate usage-based pricing and improve claims triage. 

However, the report cautions that auto insurance remains a commoditized, margin-tight market. As insurers continue to adopt AI tools, the risk of "hyperfixation"—over-optimization based on increasingly granular data—could unintentionally expand the protection gap by making coverage unaffordable for some drivers. 

Gallagher Re's analysis includes case studies of InsurTech firms like Zego, Nirvana, EIS Group, and Reserv. These companies are using AI to optimize risk modeling, automate claims, and enhance customer engagement, showcasing the transformative potential of technology in auto insurance. 

The report concludes by noting that with $13 billion in investment—roughly 22 percent of all InsurTech funding to date—auto/motor remains a foundational focus for innovation. As the industry enters what Gallagher Re calls an "era of pragmatism," the balance between technological advancement and sustainable growth will be central to the evolution of InsurTech.