Many startup sectors came out of 2021’s hype with a massive hangover in the form of valuations that they simply couldn’t justify as the market dipped and dived. Insurtech startups had it the worst, though, as investors started questioning the viability of the entire category.

A recent report on the sector by Dealroom, Mundi Ventures, MAPFRE, NN Group and Generali refers to this disillusionment as “the death of Insurtech 1.0.”

The Exchange explores startups, markets and money.

Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.

That demise started in 2022, when “a broad market downturn, coupled with clear specific challenges of notable insurtech[s] to reach profitability,” contributed to creating a newly challenging environment for insurtech funding, the report said.

This challenging environment is being reflected in the data this year, too: public insurtechs are struggling and there’s been a sharp decline in venture capital flowing into the sector.

But money is like water where venture capital is concerned. Despite all the bad news, capital is still trickling into some pockets of insurtech that are considered different enough from the first wave of companies.

This morning, let’s dig into what’s happening with global insurtech startups, and see if we can spot a little light in this murky bog that many insurtech companies are lost in.