Investors have demonstrated their strong interest in the insurance technology space once again, as evidenced by Medicare Advantage insurance provider Devoted Health Inc. pulling off a $1.15 billion series D funding round.

Devoted Health's latest round drew interest from a dozen investors, and the company expects to close on $80 million in additional funding at a later date to accommodate a current investor, which would raise its series D haul to $1.23 billion.

The insurtech was reportedly valued at about $12.7 billion after the latest funding round. An earlier report pegged the company's valuation at $11.5 billion.

Given its status as a private company, Devoted Health does not comment on any reported valuation metrics, a spokesperson told S&P Global Market Intelligence in an email.

Devoted Health said it has grown organically at "rapid speed" across the markets in Florida, Texas, Ohio and Arizona. It also announced at the start of October that it is offering plans in Illinois. It logged $247.3 million of revenue during the first six months of 2021, up 128% over the same period in 2020. It had nearly 40,000 members as of June 30, up sharply from more than 18,000 at the same point in 2020.

The membership growth has been "quite impressive," according to Kat Liu, an analyst at financial services company IPOX Schuster LLC, although she also thinks the reported valuation is high. Liu told Market Intelligence that the valuation could have been driven in part by the fact that Devoted Health's founders and management team, former executives at athenahealth, are very experienced in the field.

Robert Hartwig, director of the University of South Carolina's Risk and Uncertainty Management Center, said Devoted Health may be benefiting from the ongoing debate over whether to lower the Medicare eligibility age, which would add millions of potential customers for Medicare Advantage insurers. Devoted Health's reported valuation is "very high," Hartwig told Market Intelligence, but it could be justified if it manages to snag significant market share from the biggest managed care players, including the likes of UnitedHealth Group Inc., Humana Inc. and Anthem Inc.

The real test of Devoted Health's value will come when the company decides to go public, said Kaenan Hertz, managing partner at Insurtech Advisors LLC. Hertz in an email noted that the prices of many insurtech companies that have gone public in recent years are now trading below their IPO prices. The share prices of Clover Health Investments Corp. and Oscar Health Inc., which are significantly larger than Devoted Health, are down more than 50% from their 52-week highs, Hertz noted.

Valuations of insurtechs and other startups are being aided by the Federal Reserve's efforts to keep interest rates low, which have driven investors from bonds and other traditional assets into "every manner of speculative asset," Hartwig said. Insurtech investors may be "blinded by the 'tech' suffix" and forget about the inherent challenges for an insurance company, contributing to "unjustifiably high" valuations, he said.

Hartwig warned that valuations for these companies could slide, as the central bank has indicated it will soon begin efforts to unwind its extraordinary measures to support the economy.