Insurtech-based premiums to exceed $400bn by 2023
Insurance premiums generated by emerging insurtech services will exceed $400 billion by 2023, up from an estimated $187 billion in 2018, according to a study by Juniper Research.
The new research “Insurtech: Cost Savings, Insurer Readiness & Market Forecasts 2018-2023” found that insurtech platforms will equip insurers to meet the challenges of diminishing margins and increased competition.
However, while insurtech enables rapid transformation of traditional insurance business models, the adoption of these platforms by incumbents has been limited due to relatively slow rates of innovation within the industry. Consequently, Juniper forecasts that this new sector will represent under 10 percent of the global insurance market by 2023, compared to approximately 4 percent in 2018.
Juniper’s Insurtech Readiness Index analyzed leading insurers to evaluate their readiness scores and ranked the top 20 based on several metrics, including insurtech offerings, investment and future potential. According to the research, AXA is the clear leader in insurtech transformation preparedness, using insurtech to transform its operating model at all levels of its operations. While its transformation programme is not yet complete, the financial resources at its disposal should ensure it remains a leader in the space, according to Juniper Research. Also on top of the ranking is Allianz, Ping An, Aviva and UnitedHealth.
Despite still being in early deployment stage, the introduction of AI (Artificial Intelligence) in the claims process will generate significant cost savings. Juniper forecasts that across property, health, life and motor insurance, the annual cost savings will exceed $1.2 billion by 2023, a five-fold increase over 2018.
“AI vendors such as Tractable are revolutionizing claims, demonstrating the potential of AI in claims management,” said research author Nick Maynard.” In a time of stagnating combined ratios, AI has the potential to make a tremendous difference to insurer’s margins.”
If you enjoyed this story and have an interest in Insurtech, join us at Intelligent InsurTECH Europe 2018, the only insurtech event with dedicated streams for CXOs, Data/Analytics, and Claims. Find out more here.
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