Deal activity in insurtech, especially for early-stage startups, is slowing down in the first quarter.

Total venture capital funding for the industry hit $283 million this quarter, slightly higher than the $271 million invested in the previous quarter, but down significantly — 64% — on year-over-year basis, according to a report from Willis Towers Watson Securities and CB Insights released today.

The number of deals in the quarter totaled at 38, down from 59 transactions in the year prior. According to the report, the “decline in funding likely results from start-ups moving from fundraising to product launch stage.”

The report, however, suggests that the sector is “promising.” Rafal Walkiewicz, CEO of Willis Towers Watson Securities, writes:

Many market participants want to embrace the insurtech revolution but continue to struggle with determining how to successfully monetize industry changes, at least in the short term. Insurtech’s rise means that there are an inordinate number of new tools and technologies with the potential to optimize existing business processes. Which products add sufficient value to warrant investment? We look into the ‘hype cycle’ of the insurtech revolution, from early over-inflated expectations to the productive applications and innovations that survive.

Check out Bank Innovation’s listing of promising insurtechs here.