The global insurtech market size is expected to reach USD 152.43 billion by 2030, registering a CAGR of 52.7% from 2023 to 2030, according to a new report by Grand View Research, Inc. The rising awareness about the benefits of insurtech solutions in simplifying the claim process, improving communication, and implementing automation is expected to drive market growth. The increased use of robotic process automation in insurance companies to handle repetitive tasks more accurately, quickly, and accurately compared to humans is also one of the major factors driving the market growth.
Insurtech Market Report Highlights
- The health segment dominated the market in 2022. The growth can be attributed to the increasing awareness about healthy lifestyle habits across the globe due to the pandemic, which requires insurance companies in the healthcare domain to invest more in enhanced technologies
- The managed services segment dominated the market in 2022. The increasing usage of intelligent machines and the rise of automation in the field of insurtech increased the adoption of managed services in various end-use industries in 2022
- The blockchain technology segment is expected to witness the fastest growth over the forecast period. Insurance companies demand blockchain technology to increase sales, increase customer engagement, and gain a competitive edge
- The healthcare industry is expected to witness the fastest growth over the forecast period. Political and consumer trends are forcing the healthcare industry to become more transparent about pricing. Moreover, new approaches adopted by startups in the insurance sector are expected to drive the segment growth over the forecast period
- North America is witnessing an increasing demand for better communication, seamless data sharing, and high integration between insurers and service providers for improved customer engagement. As a result, the regional market is expected to witness promising growth opportunities over the forecast period
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Insurtech, a portmanteau of “insurance” and “technology,” refers to the application of innovative technological advancements and digital solutions within the insurance industry. It encompasses a wide range of technologies, including artificial intelligence, machine learning, blockchain, Internet of Things (IoT), and data analytics, among others. Insurtech aims to streamline and modernize traditional insurance processes, enhance customer experiences, and improve operational efficiency for insurance companies. By leveraging these technologies, insurtech companies and startups offer novel products and services that transform various aspects of the insurance value chain. This includes digital distribution platforms, online policy management tools, automated underwriting and claims processing systems, telematics for usage-based insurance, and personalized risk assessment models. Insurtech has the potential to disrupt the traditional insurance landscape by providing more accessible, transparent, and tailored insurance solutions to consumers.
Furthermore, insurtech plays a significant role in enabling insurers to harness data-driven insights for better risk assessment, fraud detection, and pricing accuracy. Through the integration of IoT devices, such as smart sensors, wearables, and connected vehicles, insurers can gather real-time data and offer usage-based policies that align premiums with actual usage patterns and behavior. It is revolutionizing the insurance industry by leveraging technology to enhance efficiency, create innovative products and services, and improve the overall insurance experience for both insurers and policyholders.
Insurtech companies are continuing to leverage digital platforms and partnerships to offer insurance products through online channels. This includes collaborations with e-commerce platforms, digital wallets, and mobile apps, making insurance more accessible and convenient for customers. Insurtech firms are increasingly utilizing artificial intelligence (AI) and machine learning algorithms to automate underwriting processes, claims handling, and risk assessment. These technologies enable quicker decision-making, more accurate risk modeling, and enhanced fraud detection. Companies are leveraging advanced data analytics techniques to gather and analyze vast amounts of data. This helps in understanding customer behavior, preferences, and risks, leading to personalized insurance products and pricing models that better align with individual needs. Blockchain, with its decentralized and secure nature, is being explored in the insurance industry to streamline processes such as claims management, policy administration, and identity verification. Blockchain has the potential to enhance transparency, reduce fraud, and improve efficiency in insurance operations.
Traditional insurance companies are increasingly partnering with insurtech startups to foster innovation and bring digital capabilities to their operations. These collaborations often result in joint product development, improved customer experiences, and increased operational efficiency. Insurtech is gaining momentum in emerging markets, where technology adoption and insurance penetration rates are relatively low. Startups are targeting these markets with innovative, affordable, and easily accessible insurance solutions, often leveraging mobile technology and alternative data sources for risk assessment. Insurtech ecosystems are being developed, bringing together various stakeholders, including insurers, startups, investors, and technology providers. These ecosystems foster collaboration, knowledge sharing, and funding opportunities, driving further growth and innovation in the insurtech sector. It’s worth noting that the insurtech market is dynamic and rapidly evolving.
The market is expected to benefit from the rising interest of global investors in insurtech companies. For instance, in May 2021, Shift Technology, a provider of artificial intelligence SaaS tools for insurance companies, raised USD 220 million. The company would use this money to expand into the property and casualty insurance and health markets.
The efforts taken by insurtech companies to enhance their fraud detection procedures are also expected to create new opportunities for market growth. For instance, in April 2021, the Insurance Fraud Bureau (IFB) announced its partnership with Shift Technology. The partnership is aimed to build a new fraud detection system on behalf of the U.K. insurance sector.
The COVID-19 pandemic favorably impacted the market growth in 2022. Insurers increased the use of drones, mobile applications, and catastrophe models amid the pandemics, which accentuated the market growth. At the same time, preventive measures such as social distancing and remote working also helped increase the rate of digitalization across the insurance industry, driving the market growth.
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Insurtech Market Insights By Region
The North America region is witnessing an increased adoption of insurtech solutions owing to the increasing spending of customers for insurance-related products. Moreover, these solutions offer customizable and flexible plans for property and health insurance. The growing number of insurtech startups across the region is also driving the market growth in the region. The Asia Pacific region is expected to witness significant growth due to the presence of numerous emerging economies and financial hubs in Singapore, India, and Hong Kong. Insurance service providers in the region are aiming to offer affordable insurance premium plans. The growing penetration of smartphones across Asia Pacific countries is also expected to drive the growth of the regional market.
Competitive Analysis By Major Companies
The market is highly fragmented and is characterized by the presence of a large number of small players, which cater to the requirements of life- and non-life insurance sectors. Market players are focused on strategies such as partnerships to help them strengthen their market positions. A variety of regulations have curbed vendors’ ability to experiment in the market. However, high competition has given them no particular reason to do so. Advancements in the field of data communication and the rising adoption of digitization have enabled market players to build global supply chains. The capability of the insurtech businesses to drive innovation in the insurance industry by developing new products and solutions could help insurance firms meet dynamic customer requirements. Some of the prominent players operating in the global insurtech market are:
- Damco Group
- DXC Technology Company
- Insurance Technology Services
- Majesco
- Oscar Insurance
- Quantemplate
Grand View Research has segmented the global insurtech market based on type, service, technology, end-use, and region.
Research Methodology
We employ a comprehensive and iterative research methodology focused on minimizing deviance in order to provide the most accurate estimates and forecasts possible. We utilize a combination of bottom-up and top-down approaches for segmenting and estimating quantitative aspects of the market. Data is continuously filtered to ensure that only validated and authenticated sources are considered. In addition, data is also mined from a host of reports in our repository, as well as a number of reputed paid databases. Our market estimates and forecasts are derived through simulation models. A unique model is created and customized for each study. Gathered information for market dynamics, technology landscape, application development, and pricing trends are fed into the model and analyzed simultaneously.
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About Grand View Research
Grand View Research provides syndicated as well as customized research reports and consulting services on 46 industries across 25 major countries worldwide. This U.S. based market research and consulting company is registered in California and headquartered in San Francisco. Comprising over 425 analysts and consultants, the company adds 1200+ market research reports to its extensive database each year. Supported by an interactive market intelligence platform, the team at Grand View Research guides Fortune 500 companies and prominent academic institutes in comprehending the global and regional business environment and carefully identifying future opportunities.
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