The Future of Insurtech in 2025: Brutal Lessons From a Shrinking Stage

If you want to understand the future of Insurtech, start with the conference circuit. Once a champagne-soaked playground for pitch decks and promises, these events now reveal a sector growing up fast. The booths are smaller. The parties are quieter. But what’s rising from the hangover is a more grounded, pragmatic industry – one focused on sustainable growth, real value, and far fewer buzzwords. The number of insurance technology events has exploded – over 50 major insurance-centric conferences were scheduled in 2024 alone – yet participation per event appears to be levelling off or declining. Industry observers note that “conference attendance numbers can be misleading” due to varying mixes of vendors, insurers, and investors. In other words, while headline figures might seem strong, the composition and engagement at these events have shifted (source).

One of the flagship gatherings, InsureTech Connect (ITC) Vegas, remains a behemoth. The 2024 edition drew around 9,000 attendees, rivaling pre-pandemic records (source). ITC Vegas’ scale (hundreds of sponsors and exhibitors) underscores that the appetite for networking and innovation in insurance is still alive. By contrast, its new European counterpart, ITC Europe (branded with the DIA conference), has so far been more modest. ITC DIA Europe 2024 in Amsterdam attracted on the order of 1,000-1,200 participants, a respectable showing but a far cry from Vegas’ crowd. This was reportedly a drop from the previous year’s European event in Barcelona, suggesting attendance and vendor participation in Europe may be on the decline as we head into 2025. Notably, Insurtech Insights Europe 2024 in London claimed over 6,000 attendees, reinforcing its status as the largest insurtech meetup in Europe, but even this figure may mask the reality that many attendees were local and budgets for elaborate booths were restrained.

Fewer “Disruptors,” More Cautious Exhibitors

The character of these conferences has evolved. “Unlike previous years, there were no bold disruptors poised to radically alter the industry. Instead, the conference showcased a thriving ecosystem… representing the maturation of the insurtech space, with collaboration and incremental innovation at the forefront,” observed Dr. Robin Kiera after ITC Europe 2024. Many startups that once splurged on lavish expo booths and hype-driven product launches are now absent or scaled down. Organisers and sponsors have felt this shift. As one insurance veteran quipped, “so many conferences, so little time (and budget)“. Companies are becoming selective, often sending smaller teams or skipping all but the top-tier events. Third-party reports even suggest some vendors are forgoing European insurtech shows due to limited ROI, focusing instead on targeted meetups or virtual demos. This frugality is a stark change from the “honeymoon phase” of insurtech, when excitement (and VC cash) fuelled ubiquitous participation.

Global Circuit Health – Flagships vs. Niche Events

On one hand, mega events like ITC Vegas remain enormously relevant, bringing together insurers, insurtechs, brokers, and investors at a scale that justifies the trip for many. ITC Vegas has become a must attend for deal making and is “the world’s largest gathering for insurance innovation”. On the other hand, smaller regional and thematic conferences are struggling to maintain momentum. The once high flying Digital Insurance Agenda (DIA), known for its glitzy shows pre 2020, has now been subsumed into ITC Europe and toned down. Industry technology trade shows run by associations have also felt pressure. For example, ACORD saw attendance drop off in recent years, prompting consolidation with other events. Post pandemic, hybrid formats briefly propped up attendance, but by 2023 and 2024 in person events were back in force, only now with a more sober tone.

Organisers are responding with specialised content (e.g. dedicated tracks on AI, climate risk, etc.) to entice attendees. Still, the overall trend is a slight decline in headcounts and fewer big ticket sponsors at insurtech events in Europe and Asia, even as networking remains the core draw. An NTT Data review of ITC Europe 2024 noted that Generative AI was the hot theme capturing journalists’ and attendees’ attention, a sign that conferences are pivoting to whatever buzzy topic can reignite interest.

Table: Select Insurtech Conference Attendance (2024)
(Sources: public event disclosures and industry reports)

As shown above, participation in Europe and Asia lags the US. Post pandemic travel hesitancy and tighter budgets play a role, but so does market size. The US insurtech scene, flush with larger deals historically, simply has more bodies to send. Europe’s 1,000+ attendee conferences are still significant, but the buzz is comparably muted. Vendor participation has also narrowed to those with something tangible to sell. In 2018 to 2019, many insurtechs attended events for mindshare. In 2024 to 2025, startups are more likely to attend only if they have the marketing budget and a clear partnership objective. The relevance of these events is being questioned in some quarters: Are they delivering ROI or just “innovation theatre”? The consensus emerging is that while large conventions like ITC remain valuable for broad networking, the era of every insurtech needing to be at every show is over.

Insight: Collaboration Over Hype

“The talk about insurtech disruption… has all but disappeared. In its stead, we are seeing a new and significant focus on collaboration and partnerships,” notes McKinsey, highlighting that a few years ago conferences were abuzz with startups vowing to “disrupt the whole insurance sector”, whereas now the future of insurtech and focus is on working with incumbents. This aligns with the on-site sentiment at ITC Europe 2024, where partnership announcements and insurer-plus-insurtech case studies took centre stage, rather than splashy product launches. The post pandemic InsurTech conference is less about proclaiming revolution and more about pragmatic solutions (e.g. improving claims by 3 to 5 percent via AI analytics). In short, the gatherings have matured – smaller, perhaps, but arguably more substance focused.

The Future of Insurtech Investments: Boom, Bust, and Maturity

Funding Falls from Peak Levels

The “honeymoon phase” of Insurtech funding has definitively ended, and the numbers tell a sobering story. After peaking around 2020 to 2021, global investment in insurance technology startups has dropped sharply. Global insurtech funding in 2024 totalled about $4.25 billion, a 5.6 percent decline from 2023 and the lowest annual total since 2018. Deal volumes likewise fell to 344 deals worldwide in 2024, down 18 percent year on year. This continues a downward trend from 2022 and 2023, indicating that the exuberance of the late 2010s has cooled off.

Europe’s decline has been even more pronounced. According to analysis by FinTech Global, the European Insurtech market contracted dramatically in 2024. Total funding in Europe dropped to $1.7 billion, a 25 percent decrease from $2.2 billion in 2023, and 62 percent down from the $4.4 billion peak in 2020. The pullback in deal count is stark. Just 75 European Insurtech deals were completed in 2024, a 54 percent plunge from 164 deals in 2023, and about 73 percent fewer than the 273 deals recorded in 2020. In other words, Europe is now seeing barely one quarter of the insurtech deal activity it did at the height of the boom. The UK, while still the largest Insurtech hub in Europe, saw only 24 deals in 2024 (32 percent of Europe’s total), down 54 percent from 52 deals the year prior. France and Germany similarly saw deal counts nearly halved in 2024. This contraction reflects not only global venture trends (rising interest rates, risk-off sentiment) but also specific disillusionment with the insurance startup story.

Table: European Insurtech Funding Decline
(Funding in USD and number of deals, by year)

As the table shows, the European Insurtech sector is raising a fraction of the capital it did just a few years ago. Globally, 2021 was the high water mark (with well over $10 billion invested and hundreds of deals – many “mega rounds” over $100 million). That tide has gone out. The first quarter of 2024 saw only $700 million of VC funding into insurtechs worldwide, which was down more than 80 percent from the first quarter of 2021 and less than half the VC funding of just a year ago. In Q4 2024, funding dipped sharply again – only $688 million invested globally in that quarter (versus $1.38 billion in Q3), although it’s worth noting there was a temporary Q3 uptick driven by a few large deals. The net result: investors are placing far fewer bets, and mostly smaller ones.

Interestingly, early stage deal sizes have held up or even grown in some cases. The average deal size was up approximately 15 percent year on year, indicating that while the number of deals is down, investors are concentrating funds into a selective few, often those with compelling tech like AI. In fact, AI focused insurtechs dominated late 2024 funding. Forty two percent of Q4 2024 deals involved AI driven companies, especially in claims tech. This suggests a flight to what’s “hot” and perceived as value adding, even amid the overall retreat.

Investor Sentiment: Caution and Demands for Profitability

Behind these numbers is a clear shift in investor sentiment. The rampant optimism that once surrounded insurtech has given way to pragmatism, and in some cases, skepticism. “Investors have become more cautious in deploying capital and are performing more in-depth due diligence,” observes BCG, noting that after seeing the post-IPO performance of earlier insurtech darlings, venture backers are now “demanding more efficiency, sustainability, and solid operating and financial performance” from startups. In practice, this means growth at all costs is out, and a path to sustainable profitability is in.

The result: many insurtech founders have had to pivot from growth mode to survival mode. “This investor caution has forced insurtechs to pivot… to cash conservation mode,” the BCG report continues, “with privately held insurtechs cutting costs, decreasing headcount, or looking at venture debt” to extend their runways. We are indeed seeing this across the industry:

Layoffs and Refocusing: Numerous insurtech unicorns and startups undertook significant layoffs in 2022 to 2024. For example, UK motor insurtech Zego (a unicorn valued at $1.1 billion in 2021) cut roughly 17 percent of its staff and over 100 employees in late 2023, and decided to exit its unprofitable B2B fleet insurance product to focus on private auto insurance. The company explicitly framed the move as an effort to achieve “sustainable growth”. Despite solid top-line growth in earlier years, that segment wasn’t meeting expectations, so Zego pulled back. In 2023 Zego wrote £122 million in premiums (an 11 percent drop year on year) and still lost £36 million before tax, though it improved from a £65 million loss in 2022. With only £28 million cash on hand and no new funding since 2021, tough choices had to be made. This is a narrative playing out for many late stage insurtechs.

Down Rounds and Valuation Cuts: The days of easy unicorn valuations are gone. Several high profile European insurtechs have faced steep valuation markdowns. One dramatic example is Germany’s wefox, once Europe’s most valuable private insurtech at a $4.5 billion valuation in 2021. In mid 2024, wefox’s lead investor Mubadala was reportedly willing to sell the company for as little as €550 million due to mounting losses and the need for fresh capital. The founders opposed that fire sale, and instead sought additional funding internally. Wefox’s financials illustrate the pressure. In 2023 it generated €739 million in revenue, but still recorded an adjusted EBITDA loss of €72 million, and was on track to need another €70 million by end of 2024. Such figures are prompting investors to insist on restructuring and cost cutting. Mubadala has pushed for strategic changes at wefox and other portfolio startups, reflecting a broader impatience for returns. Many earlier venture investors now find their stakes underwater, especially if liquidation preferences give later investors first claim on any exit.

Scarce Exits (and a Few Failures): The hoped for IPO bonanza in insurtech never really materialised in Europe. In the US, a wave of insurtech IPOs around 2020 to 2021 (Lemonade, Root, Hippo, Oscar, Clover Health, etc.) mostly floundered. By 2023, most were trading 70 to 90 percent below their debut prices, a cautionary tale for late stage investors. In Europe, no equivalent IPO rush occurred. Most big insurtechs remained private. Trade sale exits have been limited, typically smaller acquisitions where an incumbent buys a startup for its technology or portfolio. There have been a few notable deals. For example, in 2023 UK-based parametric flood insurer FloodFlash was acquired by US firm NormanMax to combine their climate risk technologies. But many startups are simply closing down if they can’t find backers or buyers. A case in point is DeadHappy, a UK insurtech offering pay-as-you-go life insurance, which entered administration in June 2024 after failing to secure new capital, despite having raised £6 million from a VC trust earlier. DeadHappy’s collapse, and reports that 150 potential acquirers passed on the business before administrators stepped in, shows how difficult the environment has become for underperforming insurtechs. Investors would rather cut losses than throw good money after bad.

On the brighter side, the companies that are succeeding tend to be those with clear value propositions and disciplined economics. For example, London-based analytics provider hyperexponential secured one of Europe’s largest insurtech funding rounds in 2024 ($73 million Series B) after growing its sales tenfold since 2021 while remaining profitable. Hyperexponential focuses on pricing software for insurers, a picks and shovels B2B model that has quickly attracted major insurance clients and revenue. Its success, profitable growth in a niche with real demand, stands in stark contrast to the earlier generation of insurtechs that prioritised rapid user acquisition (often via subsidised insurance premiums) and worried about profits later. The market is clearly rewarding the former approach now.

Honeymoon Phase Over – What’s Next?

All these signals point to a maturation in the future of Insurtech. The free-flowing venture funds and lofty promises of disruption have been replaced by an emphasis on sustainable business models, unit economics, and partnership with the established industry. As one analyst wryly noted, the funding comedown “feels to some of the insurtech players like a descent from heaven to hell,” given how abruptly fortunes have changed. Yet, despite the shakeout, the industry is not in stasis.

Green shoots: There are tentative signs that the worst may be passing. Insurtech funding, while low, appeared to stabilise in 2024 and early 2025, and some public insurtech stocks even saw a bounce off their troughs. More than half of the 20 insurtechs that went public in 2020 to 2022 experienced a stock price uptick in 2023 to 2024. Major insurers and reinsurers remain actively engaged. Reinsurance companies made 45 strategic venture investments in tech startups in just Q4 2024, showing that incumbents still seek innovation, only now they prefer to partner or invest rather than fear being disrupted. Areas like generative AI, cybersecurity, and climate risk analytics are garnering a lot of attention and investment, suggesting insurtech’s next wave will align closely with solving insurers’ pressing problems rather than trying to outcompete them on distribution.

Profitability as Priority: Both investors and founders now frequently stress a path to profitability. In panel discussions and interviews throughout 2024, a common refrain from VCs was “show me the underwriting profit, not just premium growth.” We see insurtechs adjusting their strategies accordingly, cutting unprofitable lines (as Zego did), raising rates to improve loss ratios, and focusing on core competencies. Many insurtech MGAs have pivoted to pure software or data plays, leaving capital-intensive risk-bearing to insurance partners. The honeymoon is over in the sense that startups can no longer rely on charisma and concepts to raise funds; they must demonstrate traction and a clear route to positive cash flow.

Consolidation and Integration: We are likely to witness more consolidation in the coming years. Stalling startups may merge with stronger ones, or get acquired for their tech (as happened with several telematics and broker platforms). Even conference organisers are consolidating, a telling parallel to the business side, as seen with ITC’s partnership with DIA to bolster the European event. This mirrors the broader theme: Insurtech is becoming less a separate “party” and more an integrated part of the insurance industry’s value chain. In the words of one industry CEO, “while the era of bold insurtech disruptors may have quieted, the industry is far from stagnant.” Instead of a revolution, the future will look like a steady evolution, with startup innovations being absorbed into mainstream insurance workflows.

Outlook: A Sobering but Optimistic Future

The Insurtech sector’s current state can be summarised as a reality check that’s ultimately healthy. The comedown in hype has weeded out weaker players and forced a focus on fundamentals that was arguably missing in the 2015 to 2020 boom. Conferences are smaller and more serious. Funding rounds are fewer but aimed at truly viable ideas. Insurtech is no longer the “new kid” destined to overthrow incumbents, but rather a collaborative partner driving needed modernisation in insurance.

For industry observers, two seemingly contradictory truths stand out:

1. The Frenzy Has Faded: The metric spikes of the honeymoon period – record attendance, record funding, sky-high valuations have declined. Many early Insurtech unicorns have struggled to justify their valuations, and investor enthusiasm has cooled. This has led to belt tightening, introspection, and some high-profile disappointments.
2. The Mission Remains (Maybe Stronger): Insurance still needs technology-driven innovation as much as ever. The challenges of legacy systems, poor customer experience, and emerging risks haven’t gone away. If anything, insurers are more motivated now to get ROI from innovation. The survivors of this cycle, those Insurtechs with solid tech and sound economics, have an opportunity to gain enduring relevance. And incumbents, now partnering rather than resisting, could help bring insurtech ideas to scale sustainably.

In conclusion, Insurtech’s honeymoon may be over, but its marriage with the insurance sector is just beginning, on more realistic, mutually committed terms. The coming years will likely see fewer players on the field, but those that remain could have a greater impact on insurance’s transformation than the hype-fuelled class of years past. As one conference takeaway put it, the industry has moved from disruption to collaboration, and “collaboration and incremental innovation” will drive the next chapter. Far from spelling an end, the current retrenchment is a sign of an industry growing up. The future of Insurtech is about sustainable growth, real results, and integrated change, which bodes well for its long-term future, even if the days of extravagant conferences and easy money are behind us.