Sedgwick’s $1bn deal the only bright spot as US InsurTech funding dropped by 31% in 2024

InsurTech market trends

Key US InsurTech investment stats in 2024:

  • US InsurTech funding dropped by 31% YoY
  • California continued to dominate the US InsurTech space after it secured three of the top 10 deals from the region
  • Sedgwick, a global leader in claims management, secured the largest US InsurTech deal for the for the year with a funding round of $1bn

US InsurTech funding dropped by 31% YoY

In 2024, the US InsurTech market recorded $2.8bn in total funding across 98 deals, marking a 31% decline from the $4bn raised in 2023 and a 56% drop compared to the $6.3bn raised in 2020.

Deal activity followed a similar downward trajectory, with 98 deals in 2024, a 43% decline from the 173 deals in 2023 and a 62% decrease from the 261 deals recorded in 2020.

The average deal value in 2024 was $28.1m, a sharp increase compared to the $23.2m average in 2023 and the $24m average in 2020, suggesting that funding is concentrating in fewer but larger deals.

However, this funding figure is skewed by a $1bn funding round raised by Sedgwick, a global leader in claims management, loss adjusting, and tech-enabled business solutions.

Excluding this outlier, total funding drops to $1.8bn, and the average deal size reduces to $18.6m, indicating that the market’s underlying activity was less robust than the headline figures suggest.

California continued to dominate the US InsurTech space after it secured three of the top 10  deals from the region

California continued to dominate the US InsurTech landscape in 2024, securing three of the top 10 deals, though this was down from five in 2023.

Meanwhile, New York and Illinois each claimed two top deals in 2024, highlighting their growing prominence in the sector.

Illinois maintained its position in the top 10 for both periods, while states like Maryland, Massachusetts, and Tennessee emerged with one top deal each in 2024.

This diversification contrasts with the 2023 landscape, where states like New Jersey, Georgia, Texas, and Colorado had single top deals, none of which made the 2024 list.

The shift points to a broader geographic distribution of InsurTech activity, with traditional hubs like California seeing reduced dominance while other states gain traction.

The Sedgwick deal, accounting for $1bn of the total $2.8bn raised in 2024, underscores the market’s reliance on a small number of mega-deals.

Without this deal, total funding would have been $1.8bn, representing a 55% decline compared to 2023.

Similarly, the average deal value, which was $28.1m with Sedgwick included, drops significantly to $18.6m when the deal is excluded, reflecting a sharp contraction in deal size across the sector.

These figures highlight the increasing concentration of funding in a few large players, leaving the broader market to contend with shrinking deal sizes and heightened investor caution.

 Sedgwick, a global leader in claims management, secured the largest US InsurTech deal for the for the year with a funding round of $1bn

The $1bn equity commitment was from Altas Partners.

This investment, part of a transaction valuing Sedgwick at approximately $13.2bn, brings in Altas alongside current major investors such as Carlyle and Stone Point Capital, reinforcing Sedgwick’s growth trajectory.

Known for its innovative claims-handling platform and expansive service offerings, Sedgwick manages millions of claims across casualty, property, marine, and benefits sectors annually.

The partnership with Altas is poised to bolster Sedgwick’s international expansion, technological advancements, and operational resilience, reinforcing its position as a pioneering force in the InsurTech landscape.

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