The 2024 series of reports will examine the role of Artificial Intelligence (AI) in our industry, breaking down the function and processes of AI into their relevant parts within the reinsurance value chain. The second report in this series will focus on ‘risk’ (pricing, underwriting and portfolio management/optimization).
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In keeping with prior reports, we spotlight InsurTech companies that are pertinent to this sector, interview thought leaders in this space and detail the latest InsurTech investment data.

Key findings for Q2:

  • The tide has turned and global InsurTech numbers have climbed back up. For Q2 2024, funding rose to USD1.27B, the highest level since Q1'23
  • Early-stage InsurTech funding increased to USD377.60M, the highest level since Q1'23.
  • The average deal size rose to USD18.46M, the highest level since Q3'22
  • Interestingly, overall InsurTech deal count saw 82 deals in Q2'24, the lowest quarterly count since Q2'20
  • A third of Q2'24 InsurTech deals went to AI-centered InsurTechs and 40% of Q2'24 deals went to risk-focused InsurTechs
  • The overall increases are attributable to a near doubling of average deal sizes

The role of regulation for digital fairness and biases in AI

AI is having a significant impact on the global insurance market, but responsible implementation is crucial. Regulators will expect transparency, fairness, and accountability in AI decision-making to avoid bias. Privacy laws, such as the GDPR, will likely apply to AI systems that process large amounts of data, requiring compliance and consideration at every stage of the AI lifecycle. While AI can streamline processes, human oversight is necessary to ensure effective systems and controls. Businesses should establish a formal AI governance framework to balance the benefits of AI adoption with the associated risks and complexities. AI innovation holds great promise for insurers, but it must align with privacy and regulatory requirements, requiring thoughtful implementation and ongoing ethical awareness.

In our latest Global InsurTech Report, our guide to this complex picture is the global law firm Sidley Austin LLP, who have provided a clear and succinct summary of the state of AI regulation for insurers.

View Report