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Private equity pivots insurtech deals toward AI, not cloud
Gallagher Re says 95.2% of global insurtech funding in Q1 2026 went to AI-focused companies, shifting due diligence toward measurable gains in underwriting, pricing, claims, or service.
Private equity is changing how it buys insurtech technology, with artificial intelligence now dominating screening and due diligence instead of earlier emphasis on adapting acquisitions to cloud infrastructure, according to Insurance Business.
Gallagher Re's Q1 2026 Global InsurTech Report found that 95.2% of all global insurtech funding in the first quarter of 2026 went to AI-focused companies, a trend that is reshaping which insurtech categories buyers see as premium targets, said Donald Light, principal at Donald Light Insurance Technology Advisory and a former Celent director for North America property and casualty insurance.
Light said AI has become nearly ubiquitous across point solutions, including policy administration, billing and rating, as well as claims fraud detection and distribution tools for MGA platforms and marketplaces, which are often valued mainly for the market access they provide.
He outlined three forms of AI that acquirers and licensing insurers should specifically evaluate, predictive AI for underwriting and pricing, generative AI for organizing and presenting written information, and agentic AI, and he emphasized that buyers want proof the technology can improve outcomes in revenue, cost, or customer and loss experience based on hard metrics.