FT Partners found in its recently published 2021 Annual InsurTech Almanac report that 2021 was the largest and most active year globally for private company InsurTech funding, with approximately $13.7 billion in financing volume and 430 transactions.

Half of all financings were raised by companies outside of the U.S., with the average funding round size reaching $38 million compared to $29 million in 2020.

Throughout the year, 41 financing rounds took place of $100 million or more, which is more than twice as many as both 2020, which saw 18 deals completed, and 2019, with 17 deals. Investors continued to put the most money in property/casualty and health InsurTechs in 2021, with the property/casualty InsurTech industry seeing the largest growth in funding. In 2021, property/casualty InsurTechs brought in nearly $6.8 million in funding compared to nearly $3.5 million in 2020 and $3.1 million in 2019.

Of the four largest financings in 2021, the largest was a mega-raise by a European InsurTech company. Digital insurance startup Wefox raised $650M in series C financing in June of last year. The funding means Berlin-based Wefox has grown in value threefold since tapping investors in 2019, Reuters reported.

Wefox founder and CEO Julian Teicke told Reuters the Series C round had drawn strong investor demand because the company was growing both rapidly and more profitably than rival online insurers that are losing money, citing Wefox’s strategy of offering digital tools that enable insurance agents to streamline and automate labor-intensive processes.

Carrier Management previously reported in August last year that aggregate InsurTech funding levels for the first half of 2021 had already soared past the amount raised for InsurTech businesses for the entire year 2020.

However, when WTW reported a surge in InsurTech funding to $7.4 billion in the first half of 2021, one paragraph of the firm’s Quarter InsurTech Briefing also referred to the fact that more than 450 InsurTechs have failed over the past decade. The study’s author, Andrew Johnston, noted in an interview with Carrier Management two weeks before the report’s release that he had been collecting failure data for the last 14 months.

“Most of the InsurTechs that we know about are the very, very successful ones or the ones that have attracted a lot of capital,” he said, referring to knowledge of the general public. “But they really are not reflective of the global InsurTech scene. I reckon that it might be something like 3,000 InsurTechs globally, and a lot of them come and go, right? They’re quite serious, but their successes are limited,” said Johnston, who is global head of InsurTech at Willis Re.

This has some in the industry questioning whether a bubble is about to burst. Carrier Management previously reported that Johnston and Chris Downer, a principal of Brewer Lane Ventures, speaking at the Casualty Actuarial Society Seminar on Reinsurance in June, said there is a bubble that has been created by exuberant investors in the InsurTech space stoking high valuations. But when panel moderator David Wright asked the two panelists whether fears of a bubble are justified, they offered a cautious yet optimistic take.

“If the fear is about an overvaluation being crushed under these businesses’ inability to deliver profitable long-term [results], then I think we are seeing a confluence of short-term investment bullishness meeting the realities of what’s required to deliver return,” Johnston responded. “But it speaks to a bigger issue, which is you have all of these different stakeholders that are looking at InsurTech for all manner of reasons. And the term now is so ubiquitous that InsurTechs are no longer just risk originators with a great brand, but they’re software for the entire industry—and in some cases doing some really fantastic things.”