Insurtech investors drop to lowest since 2017 as funding tightens

Seven firms from the 2025 raised a combined $298m after October showing selective funding.

Insurance companies are being warned that 2026 will be a year when technology execution matters more than experimentation, according to a new CB Insights report on insurance technology (insurtech). 

The report says large insurers including Aviva, Chubb and MetLife are building AI capabilities in-house, raising pressure on insurtech firms to show clear commercial results. 

It says the market is moving away from speculative investment and toward startups that can prove they can deploy AI tools effectively and deliver measurable returns. 

Amongst the fastest-growing agentic AI-focused insurtechs, seven of the top nine are prioritising implementation-focused roles. 

CB Insights says this reflects a market where insurers and intermediaries want help putting AI into day-to-day operations, not just testing it.

At the same time, funding for early-stage insurtech is narrowing. In 2025, the number of investors making four or more insurtech investments fell to its lowest level since 2017. 

It notes that seven of the 50 companies on CB Insights’ 2025 Insurtech 50 list have raised a combined $298m since October, showing that stronger firms are still attracting capital. 

CB Insights also says large language models are becoming a new battleground in insurance distribution. 

It points to new partnerships involving Aon, Prudential and Singlife, and says insurers without an LLM-enabled distribution strategy risk losing market share, especially in personal and small commercial lines. 

Funding to generative engine optimisation platforms rose 1,400% from 2024 to 2025, reflecting growing competition to influence how AI systems recommend products and services.