Coalition raises $250 million in Series F round

Allianz investment in insurtech builds on recent partnership with Coalition

by | July 11, 2022 | bobsguide

US cyber insurtech group Coalition has secured $250 million in Series F funding to accelerate its growth, back its international expansion, and “broaden its services”.

In a press release published July 8, Coalition announced investment firms Allianz X, Valor Equity Partners and Kinetic Partners had co-led the funding round, with participation from existing investors.

The new investment increases the company’s total valuation from $3.5 billion to $5 billion,  following a $205 million Series E co-led by Durable Capital, T. Rowe Price, and Whale Rock Capital in September last year.

To date, Coalition has raised over $755 million in equity funding from investors, which include Index Ventures, General Atlantic, Ribbit Capital, Vy Capital and Valor Equity Partners, among others.

The latest capital raise will boost Coalition’s Active Insurance capability, which leverages cyber coverage and AI-powered security tools to help clients identify, mitigate, and insure digital risks.

Serving over 160,000 customers, Coalition’s offerings include Active Cyber Insurance, Active Executive Risks Insurance, P&C insurance, and cybersecurity capabilities.

Coalition builds on recently announced Allianz partnership

The financing follows Allianz Group’s multi-year partnership with Coalition, announced in June 2022, to provide the cyber security company with long-term committed capacity for its US cyber insurance programs.

As per the collaboration agreement, Allianz will also lead Coalition’s UK cyber program when it launches later this year.

The partnership will combine Allianz products and distribution network with Coalition’s Active Cyber Insurance approach.

“Cyber is one of the top risks for businesses—irrespective of size—and one that has to be taken seriously by us all. We are seeing an increasing professionalization of cybercrime,” said Scott Sayce, Global Head of Cyber at Allianz.

“At the same time, in a technology-driven world, companies are dependent on ensuring secure IT systems and protecting their data-based knowledge. Defending against cyberattacks has, therefore, become essential.”

“With this partnership, Allianz reiterates and expands its support for SME and MidCorp clients in the US and UK with the combined power of Coalition and Allianz.”

Allianz is the third insurer to partner with Coalition to support the latter’s cyber insurance program this year. In April, Vantage and Ascot also agreed to team up with Coalition to back its US cyber programme.

Insurtech groups see increased demand

According to Frankfurt listed insurance group, Munich Re, the global cyber premium is estimated to be $9.2 billion (beginning of 2022) and is expected to reach $22 billion by 2025.

Coalition, in its Claims Report 2022, stated the average ransom demand against its policyholders increased 20% in the latter half of 2021, while the severity of the claims increased by 10%.

It also reported processing more claims across more organisations in the past year than in any period.

As the need for protection against the impact of cyber-attacks grows, insurtech companies have seen growing interest from customers, partners, and investors.

Last month, French cybersecurity insurtech group, Stoïk raised €11m in a Series A round led by venture capital firm Andreessen Horowitz (a16z) to support its expansion in the European SME markets.

In March 2022, US peer Cowbell Cyber also raised $100 million in a Series B round from an investment consortium led by Anthemis Group.

Two months prior, growth capital investor BGF backed UK cyber insurtech start-up KYND with a £3.25 million ($4.4 million) investment to support its expansion plans and new products launch.

Beyond investments, US speciality insurance distributor Amwins partnered with compatriot insurtech group FusionMGA to provide retail brokers with exclusive access to cyber liability coverage as well as cyber security tools and resources.

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