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The size of the insurance technology (InsureTech) market is heavily influenced by a range of factors, which collectively define its growth and impact on the insurance sector. Among these main drivers, the most important one is the increase in digitalization and technological innovation within the insurance sector. The changing age structure of populations and evolving customer expectations are key factors that drive the InsureTech market. Additionally, there is increasing data-driven decision-making leading to InsureTech market growth. In a bid to accurately determine risks, price policies competitively, and detect illegal activities, among others, insurers rely on big data and analytical tools. With real-time analysis being done through InsureTech solutions available to them, insurers are empowered to make reliable choices during underwriting decisions regarding risk analysis and management, thereby leading to enhanced operational efficiency and improved profitability.
Another factor that critically influences the InsureTech market is consumer demand for innovative insurance products as well as distribution channels. There are newer coverage options brought about by InsureTech companies, such as usage-based insurance, peer-to-peer insurance, on-demand policies, etc., which address specific customers' needs. Regulatory changes, including compliance requirements, also shape the landscape in which players compete in this market space. As regulations change in line with new developments in this industry, they must comply with new standards put forth by government agencies that protect personal information online when they use these systems of risk management or make payments. Since security breaches can lead to catastrophic losses for both companies involved and those indirectly affected by them, regulatory norms have become highly salient when discussing adoption rates concerning IT applications into strategic business processes, especially in the world of insurance.
Notably, though, cost considerations remain significant for traditional insurers who may seek technology solutions to become more efficient, hence accessing new markets via digitization or reducing expenses associated with complex operations like claims processing, etc. For example, some interesting economical implementations of InsureTech solutions are adaptable to existing legacy systems, cost-competitive, and have a broad scale of use. Vendors that can prove the ROI and value proposition over a longer period for their InsureTech solutions will best navigate incurring costs in a market that is quite sensitive. On the other hand, these dynamics surrounding the competitive landscape and strategic alliances alike shape the character of this highly volatile market. For example, they could be traditional insurers, insurance technology firms (InsureTech), or even traditional insurers partnering with big tech companies like Google or Amazon on various technological solutions. InsureTech offerings may be integrated into established insurance ecosystems by means of strategic partnerships so as to facilitate an easier adoption curve toward technology-driven processes.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Growth Rate | Â 31.70% |
InsureTech Market Highlights:
InsureTech Market Overview
The InsurTech market is projected to reach a staggering 158.91 Billion by 2027, registering a remarkable CAGR of 31.70%.The InsurTech market is experiencing exponential growth, driven by a surge in technological advancements that are revolutionizing the insurance industry. InsurTech companies are harnessing innovative technologies such as artificial intelligence, machine learning, and big data to develop novel products and services that cater to the evolving needs of consumers. These solutions offer increased personalization, affordability, and accessibility, transforming the traditional insurance landscape.
InsureTech or Insurance Technology is a subset of fintech or financial technology. InsureTech relates to the use of technologies such as AI, IoT, cloud, and blockchain which helps in simplifying and improving the efficiency of the insurance industry. These technologies help insurance companies to provide interactive and enhanced services to its clients such as interactive chatbots, behavioral premium pricing, customized claims settlement, and fraud and risk identification and management which helps the insurance providers to remain competitive in the market, drive operational excellence, and boost growth.
The need among insurance service providers to offer personalized insurance services and automate the operational process by adopting digital technologies is increasing which is a major factor driving the growth of the InsureTech market. Customers or policyholders today are ready to adopt new insurance models. A recent survey found that 41% of the customers are considering usage-based insurance and over 37% of the customers are ready to explore the on-demand insurance coverage model although they are at a nascent stage. Insurance companies adopting advanced technologies are exploring new business models such as usage-based, on-demand, parametric, and microinsurance to cover the gaps and customer demands for personalization and convenience.Â
The usage-based insurance models offer as-you-go coverage or premium based on a customer’s propensity for taking risk. The on-demand models allow the customers to get cost-effective and convenient coverage as and when they require. The parametric insurance model covers previously uninsured risks, based on the predefined parameters or an objective-triggering event, whereas, the microinsurance model offers smaller insurance packages with lower premiums and provides coverage to those with low-income brackets and limited access to conventional insurance services or the means to manage risks. The risks related to data leaks and security breaches is a major challenge that vendors are working on to ensure security, however, lack of technical expertise can hamper the market growth. The market is expected to witness growth opportunities due to advances in AI technology. The InsureTech market is expected to be influenced by the advent of emerging technologies such as big data, blockchain, AI, and IoT. Interactive chatbots, behavioral premium pricing, customized claims settlement, fraud and risk identification and management, and UAVs and smart devices for extreme surveillance are the emerging trends in the InsureTech market.
Key Players
The Prominent Players active in the Global InsureTech market areÂ
Amazon Web Services Inc. (US)
IBM Corporation (US)
Wipro Limited (India)
Tractable (UK)Â
Oracle Corporation (US)
Google (US)
Untangl Limited (UK)
Quantemplate (UK)
Intel Corporation (US)
Baidu (China)
BIMA (UK)
Shift Technology (France)
Pentation Analytics Pvt Ltd (India)
eWise (Switzerland)
Segmentation
The Global InsureTech Market has been segmented on the basis of Component, Deployment, Technology, Insurance Type, and Region.
By component, the InsureTech market has been segmented into software and services.
By deployment, the InsureTech market has been bifurcated into on-cloud and on-premise.
By technology, the InsureTech market has been segmented into cloud computing, blockchain, artificial intelligence, internet of things, and others.
By insurance type, the InsureTech market has been segmented into property and casualty insurance, health and life insurance, commercial insurance, and others.
By region, the InsureTech market has been segmented into North America, Europe, Asia-Pacific, and the rest of the world. The market in the rest of the world has been further classified into the Middle East and Africa, and South America.
Regional Analysis
Market Research Future (MRFR) study has covered the following countries in the regional analysis of the InsureTech market: In North America, we have considered the US, Canada, and Mexico. Germany, the UK, France, Spain, and Italy in Europe. In Asia-Pacific China, Japan, India, South Korea, and Australia are considered. In the rest of the world, we have considered South America and the Middle East and Africa region.
North America currently dominates the global InsureTech market and has a significant market share. This is due to the presence of major key players in the market, investing heavily in the research and development of advanced technology platforms for insurance services for boosting customer satisfaction and operational performance. The region has highly skilled technical expertise, is an early adopter of technology, and is also witnesses rising adoption of advanced technologies such as AI, blockchain, and IoT which drives market growth. Europe is also expected to have a significant share in the market. European government is increasingly taking initiatives to adopt cloud-based services. Also, the increasing adoption of insurance services are driving the market growth in the regional market
Asia-Pacific is projected to be the fastest-growing regional market during the forecast period. Growing economies such as China, Japan, and India are focusing on insurers providing insurance plans at affordable rates. Furthermore, increasing adoption of digitalization and advanced technologies such as cloud, mobile, and AI thereby increases the adoption of digital insurance platform. The global InsureTech market in the rest of the world is also expected to grow at a considerable rate during the forecast period due to the rising demand for digital and personalized insurance services.
Intended Audience
- Investors and consultants
- Research/Consultancy firms
- Technology solution providers
- Government agencies
- Software developers
- Independent Software Vendors (ISVs)
- Cloud service providers
- Insurance service providers
- Insurance agencies
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