Investors are moving towards companies with clearer paths to profit.
Asia-Pacific (APAC) insurance technology (insurtech) investors are directing more capital to embedded insurance and insurance infrastructure firms as funding becomes harder to secure across the sector, analysts said.
“Investors are increasingly backing companies that support the broader insurance ecosystem, including distribution platforms, health access players, data infrastructure, and embedded insurance rails,” Paul Sommerin, managing director at NTT DATA Group Corporation, told Insurance Asia.
Insurtech funding in the APAC region fell to about $4.1b from 2022 to 2025, down from $9.1b from 2018 to 2021, whilst the number of deals dropped to 202 from 383, according to a June NTT DATA report.
The shift reflects a move away from businesses focused on rapid customer growth towards companies with clearer paths to profit, Sommerin said.
“As our Insurtech Global Outlook 2026 notes, the market is moving from challenger insurers to ecosystem orchestrators, and the APAC region’s funding pattern reflects that shift,” he said in an emailed reply to questions.
China’s share of regional funding has declined, whilst Singapore, Indonesia, and India have attracted a bigger proportion of investment, according to the report.
Singapore is benefiting from regulatory certainty and its position as a hub for cross-border insurance distribution and embedded-insurance businesses, Sommerin said.
India’s growth has been supported by digital infrastructure such as Aadhaar, the Unified Payments Interface, and the Open Network for Digital Commerce, which reduce customer onboarding and distribution costs.
Indonesia is attracting investors through its large underinsured population and growing partnerships among insurers, e-commerce platforms, and payment providers, he added.
Ross Sinclair, CEO at EIP Ltd., said investors have become more selective as the sector matures.
“Investors want to see a credible route to profitability and evidence that the technology solves a genuine customer problem,” he said in an emailed reply to questions.
“The industry is maturing, so naturally, the most successful businesses will be those that can turn their pitch-deck promises into tangible financial performance and demonstrate that their technology works reliably in the real world,” he added.
Both analysts said investors are placing greater weight on business economics than whether a company sells directly to consumers or to insurers.
“The real dividing line is not business-to-consumer versus business-to-business; it is sustainable economics versus companies going for growth at any cost,” Sinclair said.
Artificial intelligence (AI) remains a key test for the sector as insurers move from pilot projects to broader deployment, Sommerin said.
“Most insurance employees now use AI in their day-to-day work, but only around one in five insurers has scaled it into core workflows,”he said.
A February report by EIP Ltd. found that 90% of senior insurance professionals expect end-to-end claim administration to be managed by AI within 24 months. At the same time, 87% expressed concerns about bias and 99% said some level of human oversight should remain.
“The strongest businesses will be those combining AI with deep insurance expertise, strong distribution, regulatory capability and proven execution,” Sinclair said.