Global insurtech funding fell to $US1.36 billion ($1.98 billion) in July-September, down 45% from a four-year high in the preceding quarter, according to Gallagher Re.

The fall was driven by a decline in “mega” deals above $US100 million ($145.6 million) rather than broader market weakness, the broker’s latest Global Insurtech Report says.

Early-stage funding rose 20% to $US317.3 million ($461.8 million) and the number of insurtech transactions was roughly steady at 104.

“The third quarter’s total is still about 5% higher than the quarterly average since 2023,” Gallagher Re global head of insurtech Andrew Johnston said.

“It is probably too early to declare this a reversal. The second quarter was a recent high for insurtech funding and inflated by large mega-round deals.”

Mega-round funding dropped to $US660 million ($960.6 million) in the third quarter, from $US1.67 billion ($2.43 billion) in the preceding three months.

The report examines how AI is redefining credit risk protection, ratings, financial protection hedges and trade finance.

“The firms creating the most value are not necessarily inventing entirely new products,” Mr Johnston said. “Many are using AI to make long-established classes of business more accurate, more efficient and more scalable.”

See the report here.