The UK insurtech industry has seen persistent success despite cooling trends in global insurtech investment. Funding rounds in 2024 were up 8 percent compared with 2023,1 the first time funding has increased since 2021.2 This has powered companies with fresh solutions and innovative partnerships designed to tackle emerging risks. A growing number of players in the UK insurtech scene are set to expand internationally in the coming years.
To understand this dynamic insurtech hub, we launched our 2025 insurtech survey to see what’s changed since our 2023 report.3 One key finding stood out: Insurtech archetypes are shifting, moving from full-spectrum insurance entities4 to value chain enablers, which provide solutions at one or a few parts of the value chain. We also discovered other key findings, including information about the funding landscape, the rise of gen AI, increasing innovation in response to risks, and more.
This industry perspective provides an overview of the UK insurtech landscape using data from McKinsey and Insurtech UK’s 2025 survey, revealing trends defining the UK insurtech landscape today (see sidebar “About the research”). With this information, insurtech firms and entrepreneurs, industry incumbents, and investors can create informed future outlooks and strategies for the coming years.
The United Kingdom is a globally leading insurtech hub
Since 2019, the UK insurtech sector has attracted the second largest share of funding in the world after the United States, according to McKinsey analysis. Between 2022 and 2024, the United Kingdom secured about 5 percent of global insurtech funding, ahead of larger countries and emerging economies such as India and China, with a deal size that was consistently larger than any other European country. The United Kingdom is also home to the world’s fastest-growing pool of insurtech companies, with the number of insurtechs growing 7 percent since 2022, and the highest number of insurtechs per capita among major economies. This growth is coupled with stability: In the 2022–24 period, the ratio of newly founded insurance companies per total population in the United Kingdom was similar to that of other regions, but the United Kingdom had only half the exit rate (Exhibit 1).5
Since 2024, the United Kingdom has seen moderate acceleration in investment
Global investments in insurtechs, as a share of global insurance investments, peaked in 2020 and have declined since then. Although the United Kingdom was not immune to this trend,6 the UK insurtech industry experienced a moderate acceleration in investment in 2024, with an increase in the number of venture capital (VC) deals of approximately 8 percent compared to 2023. Since the COVID-19 pandemic, VC deals have been the main driver for UK insurtech, although the number of seed investments has been declining since 2021.7 This suggests that VCs are still cautious with new entrants in the market. At the same time, the number of series B and C deals have been stable, with more than 30 percent increase in investment value.8 This suggests that VCs are more inclined to follow up on previous investments (Exhibit 2).
UK insurtechs are accelerating international expansion
There has been increase in UK insurtechs expanding outward, with about 60 percent of UK insurtechs expanding internationally, up from about 50 percent in 2022. The majority of expanding insurtechs in the United Kingdom (also about 60 percent) have chosen Europe for their expansion, which is significantly higher than in 2023, when Australia and United States were the most popular.9 This is likely due to market saturation and higher cost to enter the Anglosphere (Exhibit 3).
When choosing a new market to enter, insurtechs reported their most important considerations were customer preferences and regulation, previous founder experience, market competitiveness, and investment opportunities.10
Attention is shifting toward value chain enablers
Since 2018, the biggest funding rounds in the United Kingdom have been mostly evenly distributed among all insurtech archetypes, although interest is shifting from full-spectrum insurance entities using technology to improve their services to value chain enablers, or technology providers for insurers (see sidebar “What are value chain enablers?”). In the United Kingdom today, insurance entities make up about 25 percent of the insurtech population and value chain enablers make up 75 percent.
Only about 9 percent of funding targeted insurance entities in 2024, down from 75 percent in 2021. By contrast, since 2022, funding for value chain enablers has grown by 6 to 8 percent (although value chain enablers have smaller average deal sizes of £74 million versus £160 million for insurance entities). Claims-related and tech solution–related value chain enablers (about 15 percent and 13 percent, respectively) have attracted most of this growth (Exhibit 4).
Investors may be more attracted to value chain enablers due to a reduced appetite to back insurance businesses with balance sheet exposure, as well as greater market opportunities for carriers to modernize their tech stacks at faster and at lower costs with gen AI. This move toward value chain enablers would also not be possible without a growth in partnerships. Partnerships with incumbents help insurtechs access capacity, funding, and big data, while incumbents benefit from insurtechs’ state-of-the-art technology and talent, especially in niche markets.
Companies are innovating in response to evolving risks
According to our survey, insurance innovation is focused on new and emerging risks, specifically cyber, climate, and beyond-standard health insurance, although about three out of four insurtechs still focus on traditional risks and lines of business:
- Cyber: Compared with the United Kingdom, cyber insurance has a deeper penetration rate in the United States (about 25 percent versus about 10 percent in the United Kingdom) and a larger average premium per policy ($4,000 versus $2,700), indicating room for growth.11
- Climate: Climate-related insurance has experienced increasing demand due to intensifying weather extremes. The number of climate-related insurtechs based in the United Kingdom has increased by about 50 percent since 2019, and about 30 percent of polled managing general agents (MGAs) work with incumbents to deal with increasingly complex climate risks.12
- Beyond-standard health insurance: UK insurtechs focusing on beyond-standard health insurance—for example, products offering improved coverage for certain conditions, such as fertility, and new channels of healthcare delivery, such as remote healthcare—have seen a 17 percent increase since 2022.13
In each of these areas, new products and technologies are expected to be the biggest opportunities (about 25 percent of respondents), and customer acquisition is expected to be the biggest challenge (about 20 percent of respondents) (Exhibit 5).
Gen AI is making waves in the UK insurtech industry
According to the survey, more than 70 percent of UK insurtech firms are already running or moving beyond gen AI pilot projects—well above the industry average of 40 percent adoption14—and more than 90 percent expecting to have gen AI in production in the next 12 months. Accordingly, developing and deploying new technologies with gen AI was the second-highest ranked opportunity identified by respondents, growing to almost 20 percent from about 10 percent in 2022.
Insurtechs are using gen AI for a number of purposes, including synthesizing and summarizing unstructured data,15 automating tedious human tasks, and otherwise augmenting human productivity. In insurance, gen AI is expected to have the biggest impact in claims-related tasks, enabling 20 to 25 percent cost savings by reducing the time spent processing claims. Improvements from gen AI are also expected in marketing and distribution (5 to 15 percent cost savings by reducing time spent on outreach and calls), pricing and underwriting (10 to 15 percent cost savings by reducing time spent on processing), and tech solutions (5 to 10 percent cost savings by reducing time spent on coding work and support tasks).16 Many of these opportunities are not yet realized: Although more than one-third of insurtechs are moving beyond pilots, only about 10 percent are attempting a full domain reimagination based on gen AI.17 Insurtechs that fully scale AI into their business models may gain an advantage (Exhibit 6).18
Insurtechs are focusing on costs, margins, and operational metrics
Because market conditions have shifted since 2023, when the most monitored factors among insurtechs were still growth, margins, and profitability, about 40 percent of UK insurtechs have adjusted their KPIs.19 In 2025, more insurtechs reported intending to focus on cost (57 percent versus 29 percent in 2023) and operational metrics (29 percent versus 19 percent in 2023), as opposed to product and customer metrics (Exhibit 7).
These more tangible metrics include premiums and gross written premiums, monthly active users, and profit. Operationally, there has also been a move away from speed to market and toward data quality and cost reduction.
Some capabilities are core to success
To continue developing the industry and attracting funding, three elements will continue to be core to UK insurtechs’ success: prosperous partnerships, pioneering innovation, and trailblazing tech adoption:
- Prosperous partnerships: Insurtechs are shifting from direct competition with incumbents to partnerships to leverage their capacity and data access. Partnerships are present today with MGAs, managing general underwriters, and value chain enablers, and looking forward, partnerships with incumbents will remain vital for insurtechs.
- Pioneering product innovation: Insurtechs are uniquely able to explore niche markets and new product development, driven by their entrepreneurship and agility. MGAs working with incumbents navigating fast-growing areas (such as increasingly complex climate-related risks, cyber risks, and beyond-standard health insurance) can innovate rapidly to develop powerful new solutions.
- Trailblazing tech adoption: The global insurtech industry has always been at the forefront of adopting new technologies across the value chain, such as machine learning pricing models and state-of-the-art technology platforms, the latest being gen AI. Maintaining their competitive advantage, agility, and innovative spirit by adopting new technology is essential for sustaining insurtech’s success as well as driving industry-wide growth.
The UK insurtech landscape stands out on the global stage as a center of innovation and collaboration. As the funding environment shifts and new technologies open up possibilities, UK insurtechs that stay on the ball can uphold their reputation as industry leaders and set themselves up to succeed in the years to come.
