Published:
May 17, 2025
Author:
Sarah Parsons Wolter
Share:
In the grand tradition of turning lemons into lemonade (and then selling it with a premium), companies are now rolling out coverage for AI-induced legal debacles—think chatbots gone rogue, offering phantom discounts or offering less-than-professional engagement. The product targets a very 2025 problem: the growing list of companies entrusting front-line service to large language models prone to hallucinations, then desperately needing someone to mop up the fallout.
The value propositions are cunning: cover kicks in not for isolated AI errors, but when performance systematically deteriorates—say, a bot that once had a 95% accuracy rate dips to 85%. That nuance makes this insurance less of a blank check for tech mishaps and more a performance-tracking safeguard. It’s a bet that companies can, and will, quantify expectations and outcomes in a world where algorithms evolve in real-time.
Meanwhile, in China, the actuarial gods are smiling for entirely different reasons. A greying population, typically a demographic red flag, is giving the insurance sector a silver lining. With nearly a third of the population projected to be over 60 by 2035, demand for health and retirement products is skyrocketing. Enter AI, again. This time, it’s not misbehaving chatbots but hyper-personalized policy engines wielding thousands of machine learning models to tailor products to users' lifestyles. Life insurers are quickly becoming some of the most data-savvy players in China's financial ecosystem.
Still, not everything is rosy beneath the spreadsheets. Traditional insurers are feeling the squeeze from digital disruptors and lower interest rates are chipping away at investment returns. But if there's a future where AI missteps are insurable and demographic decline becomes a growth engine, the insurance industry may just be the ultimate contrarian play. Whether dealing with rogue bots or aging populations, it appears insurance has found its newest edge: turning existential risk into actuarial opportunity, with a touch of algorithmic flair.
Portfolio News
CMiC and Constrafor announce partnership to automate insurance compliance with AI-powered review - The new integration combines CMiC's project management capabilities with Constrafor's AI-powered insurance review to accelerate and simplify insurance compliance for general contractors. Read more
The Top 25 FinTech AI Executives of 2025 - Congratulations to Ocrolus Co-Founder and CEO Sam Bobley for being named to The Financial Technology Report's Top 25 FinTech AI Executives of 2025. As AI becomes an integral part of modern finance, these leaders are defining how it’s built, governed, and scaled. This year’s awardees were selected based on their career track records and contributions to advancing AI in the financial technology space. Read more
The Robots Are (Mis)Speaking
Insurers launch cover for losses caused by AI chatbot errors - Insurers at Lloyd’s of London have launched a product to cover companies for losses caused by malfunctioning artificial intelligence tools, as the sector aims to profit from concerns about the risk of costly hallucinations and errors by chatbots. Read more
Did you shoot somebody in self-defense? There’s an insurance policy for that - The rise in gun ownership and stand-your-ground laws drives a lucrative new market to insulate shooters from criminal and civil liability. Read more
China’s ageing population powers the insurance sector - China’s ageing population is driving demand for health and retirement insurance, while AI is transforming the industry through personalised, data-driven offerings. Despite pressure from digital disruption and low interest rates, insurance remains a bright spot for growth. Read more
Industry News
Fintech company Chime files for Nasdaq IPO - Chime reports a $23m net loss on $1.67b in revenue for 2024, versus a $203m net loss on $1.28b in revenue for 2023. It has 8.6m active users who average 54 monthly transactions. Morgan Stanley, Goldman Sachs, and JPMorgan are leading a group of 14 IPO underwriters. Read more
Bags of cash from drug cartels flood teller windows at U.S. banks - Federal authorities allege that a Chinese money-laundering network bought dollars at a discount from Mexico’s Sinaloa drug cartel and sold them at a premium, largely to Chinese nationals in the U.S. The network allegedly handled some $50m in proceeds from drug trafficking over four years, depositing a portion of the tainted cash at ATMs and teller windows at major banks including Citibank in cities around Los Angeles County, according to federal prosecutors. Read more
Perplexity adds PayPal as checkout option - The collaboration will see Perplexity use PayPal to power agentic commerce on its Perplexity Pro platform. Beginning this summer, U.S. consumers can check out instantly using PayPal or Venmo when they ask Perplexity to look for products, book travel or purchase tickets, per the announcement. Read more
Robinhood acquires WonderFi to expand into Canada - Robinhood agreed to acquire Canadian crypto firm WonderFi (TSX: WNDR) in a C$250m all-cash deal to get a foothold in the region. WonderFi operates Bitbuy and Coinsquare, two of Canada's longest-standing regulated crypto platforms, which have been operating for over 10 years and hold more than C$2.1m in assets under custody. Read more
Stock trading app eToro pops 29% in Nasdaq debut after pricing IPO above expected range - The company raised almost $310m in its initial public offering, valuing it at roughly $4.2b. Wall Street is looking to the Robinhood competitor for signs of renewed interest in IPOs after an extended drought. Many investors saw President Donald Trump’s return to the White House as a catalyst before tariff concerns led companies to delay their plans. Read more
Mastercard and MoonPay team to promote stablecoin payments - The collaboration will allow consumers and businesses to send and receive stablecoin payments across global markets. Companies will be able to employ Mastercard-branded cards linked to users’ stablecoin balances, allowing cardholders to spend their stablecoins, which will simultaneously be converted to fiat currency, at more than 150m locations where Mastercard is accepted around the world. Read more
US regulators reportedly scaling back bank capital requirements - The cuts would be the largest in more than a decade, and the latest in a series of deregulation efforts by the Trump administration. Sources familiar with the matter said that regulators in the coming months would reduce the supplementary leverage ratio, which requires big banks to have a set amount of high-quality capital against assets like loans and things like derivatives. Read more
Funds for wealthy investors snap up expensive private equity stakes - Big private equity investors are taking advantage of a flood of capital from wealthy individuals to cash out their buyout fund holdings at higher prices despite the industry’s years-long downturn. Some of the largest evergreen vehicles, which allow retail investors to deposit and withdraw cash at regular intervals, have bought swaths of private equity fund stakes from institutional investors seeking liquidity after a dearth of distributions. Read more
Trump family bitcoin miner to go public - American Bitcoin, a bitcoin miner tied to the Trump family, has agreed to go public by merging with Gryphon Digital Mining (Nasdaq: GRYP) in an all-stock deal. The deal is the latest in a series of pro-crypto moves by the Trump family, which also owns crypto venture World Liberty Financial and launched a meme coin earlier this year. Read more
iCapital to acquire Citi Global Alternatives and collaborate with Citi Wealth - Citi Global Alternatives is the adviser to Citi Wealth’s global alternative investment fund platform. When the transaction is completed, iCapital will manage and operate the fund platform, while Citi will continue to distribute the funds and offer guidance to its clients, according to the release. Read more
Deutsche Boerse, Euronext step up battle against IPO flight to US - Two of Europe's major stock exchange operators are stepping up efforts to retain local initial public offerings in the face of U.S. competition, with marketing and research challenging the perception that New York-listed companies fetch higher valuations. European officials have been looking for ways to deepen the continent's capital markets as the depth and size of U.S. markets are a draw for those eyeing a listing. European officials are also considering new listing rules to improve access to financing. Read more
This 30-year-old’s startup is bringing leverage to 401(k) savers - Basic Capital offers a 401(k) and IRA platform with a unique financing strategy involving term financing, leverage, and private credit. The platform provides savers with $4 in leverage for every $1 saved, with the goal of generating low double-digit returns through a mix of traditional stock-market exposure and private credit investments. Read more
Select Financings
Addepar - California based provider of wealth management software for RIAs raised $230m in Series G funding led by Vitruvian Partners and WestCap. Read more
Bestow - Dallas based life insurtech company raised $75m in Series D funding led by Goldman Sachs Alternatives and Smith Point Capital. Read more
Celery - Tel Aviv based AI powered financial review platform raised $6.3m in Seed funding led by Team8. Read more
FlexPoint - New York based payments platform for managed service providers raised $12m in Series A funding led by Foundry Group. Read more
Flock Exchange - California based exchange for retiring real estate owners raised $20m in Series B funding led by Renegade Partners. Read more
Hyperbots - Delaware based finance and accounting startup raised $6.5m in Series A funding led by Arkam Ventures and Athera Venture Partners. Read more
iAltA - New York based private markets infrastructure startup raised $20m in new funding led by WestCap. Read more
MarvelX - Amsterdam based developer of AI agents for insurance claims processing raised $6m in Seed funding led by EQT Ventures. Read more
Nawy - Egypt based proptech startup raised $29m in Series A funding led by Partech Africa. Read more
Nirvana Labs - Decentralized Web3 infrastructure startup raised $6m in Seed funding led by Crucible Capital and Jump Crypto. Read more
Owner.com - San Francisco based digital platform for independent restaurant owners raised $120m in Series C funding led by Meritech and Headline. Read more
Rippling - San Francisco based provider of HR software raised $450m in Series G funding led by Elad Gil, Sands Capital, GIC, Goldman Sachs Growth, Baillie Gifford and Y Combinator. Read more
S4labour - U.K. based workplace management software provider raised £4m in new funding led by YFM Equity Partners. Read more
Samaya AI - California based financial services AI platform raised $43.5m in growth funding led by New Enterprise Associates. Read more
Shakers - Madrid based tech freelance worker marketplace raised €14m in Series A funding led by Partech. Read more
Skillvue - Milan based AI powered HR processes platform raised $6.3m in new funding led by 360 Capital. Read more
Stackpack - San Francisco based vendor stack management platform raised $6.3m in new funding led by Freestyle Capital. Read more
Stash - New York based investing and savings platform raised $146m in Series H funding led by Goodwater Capital. Read more
FinTech Collective Newsletter
Curated News with Context
Delivered every Monday, the weekly newsletter, produced by our team, provides a tightly edited rundown of global fintech news, along with a bit of our original analysis.