Insurers are accelerating the shift from reactive claims to proactive prevention and monitoring, modernizing core systems to meet rising regulatory requirements, and leaning into data infrastructure that enables faster, more accurate decisioning across the value chain. At the same time, InsurTech is moving into a stable growth phase: public-market performance has normalized, adoption is broadening from carriers to MGAs and brokers, and funding is concentrating behind scalable platforms with clear ROI.
Capital markets have reopened for quality assets. While transaction counts remain below 2021–2023 levels, big-ticket deals are back, and 2025 is pacing toward $13.1B in annualized M&A value, with strategics and PE platforms pursuing capabilities that compress loss ratios, automate workflows, and deepen distribution. Private placements have rebounded off post-COVID lows, with capital favoring mature operators and AI-native solutions that demonstrate measurable outcomes in underwriting, claims, and fraud.
Several themes define the next leg of InsurTech growth:
• AI everywhere: From underwriting to claims triage, AI is now table stakes, with the AI-in-Insurance market projected to reach ~$45B by 2030 (33% CAGR). We also see rapid adoption of Small Language Models (SLMs) for high-precision, lower-latency tasks inside carrier workflows. Near-term ROI is concentrated behind the scenes, with developer productivity (code assist, test generation, refactoring) and targeted decisioning, while superficial uses (e.g., “email optimization”) don’t move the needle.
• Sharper fraud detection: New data sources and model architectures are lifting detection accuracy and reducing false positives, directly improving combined ratios.
• Distribution disruption: Embedded and peer-to-peer models are expanding reach while reducing CAC, aided by API-first connectivity to partners and platforms.
• Hyper-personalization: Carriers are deploying dynamic pricing, product bundling, and behavior-based engagement to raise retention and LTV.
The result is an ecosystem leaning into “intelligent insurance”: unified data, automated decisioning, and human-in-the-loop controls that improve speed, accuracy, and compliance. For buyers, we expect consolidation to continue across claims automation, fraud management, and risk & underwriting, while distribution platforms pursue embedded partnerships at scale. For investors, AI-enabled platforms with demonstrable loss and expense ratio impact should command premium multiples.
At AGC, we are deeply engaged with the most active strategics and financial sponsors across InsurTech and adjacent fintech/data platforms. Our domain coverage and recent dialogues position us to help founders and operators navigate today’s market and identify the right partners for scale.
© In the U.S., America’s Growth Capital, LLC dba AGC Partners, member FINRA/SIPC. In Europe, America’s Growth Capital Europe, LLP (Appointed Representative Alternatives St. James, LLP which is authorized and regulated by the Financial Conduct Authority). America’s Growth Capital Europe, LLP is a Limited Liability Partnership incorporated in England and Wales (OC368580). Its registered address is 6th Floor, 9 Appold Street, London EC2A 2AP. The testimonials contained herein may not be representative of the experience of other customers or clients. Testimonials are no guarantee of future performance or success. Deals marked with an “*” are non-AGC deals.
