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Insurance Analytics Market

Insurance Analytics Market Size, Share & Trends Analysis Report By Component (Solution, Services), By Deployment Model (On-premises, Cloud), By Enterprise Size (Large Enterprises, Small & Medium Enterprises (SMEs)), By Application (Claims Management, Risk Management, Customer Management, Sales & Marketing, Others), By End-User (Insurance Companies, Government Agencies, Third-party administrators, brokers, and consultancies) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2022-2030

Report Code: SRTE1050DR
Study Period 2018-2030 CAGR 14.4%
Historical Period 2018-2020 Forecast Period 2022-2030
Base Year 2021 Base Year Market Size USD XX Billion
Forecast Year 2030 Forecast Year Market Size USD 39 Billion
Largest Market North America Fastest Growing Market Asia Pacific
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Market Overview

The global insurance analytics market size was worth USD 12 billion in 2021 and is projected to reach USD 39 billion by 2030, growing at a CAGR of 14.4% during the forecast period (2022-2030).

 Insurance analytics involves collecting, analyzing, and extracting relevant insights from various data sources. Moreover, insurance analytics essentially help in pricing & risk selection, identifying customers at risk of cancellation, identifying risk of fraud, focusing on customer loyalty, and transforming the claims process. Furthermore, insurance companies are increasingly adopting & implementing advanced analytical solutions to enable business growth, reduce fraudulent activities, and predict real risk for underwriting.

Essential requirements & implementation of advanced technologies and provision of integrated & value-added services to customers promote the adoption of these technologies. In addition, consumers are inclined toward getting online quotes & customized insurance solutions 24/7 from different companies, creating competition among firms operating in the industry. This, as a result, promotes the growth of the insurance analytics market.

Market Dynamics

Drivers: Increase in Adoption of Advance Technologies

Cloud computing, application programming interfaces (APIs), artificial intelligence, data analytics, robotic process automation (RPA), chatbots, and machine learning have grown popular in the insurance sector. Furthermore, companies in this area prefer integrated customized services, which has resulted in a surge in the use of insurance analytics solutions around the world.

Furthermore, there is a substantial need for the implementation of advanced technologies, as well as delivering integrated and value-added services to clients, which encourages technology adoption. As a result, the market is expected to rise as more technologies are implemented to minimize operational costs and enhance convenience and efficiency services.

Drivers: Rise in Competition in the Insurance Sector

With the rise in competition in the insurance sector, demand for analytics solutions tends to rise to sustain the stiff competition across the global market. Companies are adopting scalable & efficient solutions for managing amplified risk, dealing with catastrophes, and meeting demands of regulatory scrutiny, which are some of the significant factors that propel the adoption of insurance analytics. Furthermore, as consumers are inclined toward getting online quotes & customized insurance solutions 24/7 from different companies, it is creating competition among firms operating in the industry. Therefore, an increase in competition is accelerating the adoption of insurance analytics among key players in the market.

Restraint: Stringent Government Regulations

Various laws establish varied norms and regulations across countries, with financial centers taking a more united approach to regulation. Regulators are refining existing standards and imposing stricter regulatory actions with a higher level of responsibility and enforcement, which is slowing the growth of the insurance analytics market.

Furthermore, governments and insurers are increasingly focusing on data governance with a focus on data protection and an increase in pandemic-related digital customer contact. As a result, this is the most significant factor impeding market expansion.

Opportunities: The surge in Fraudulent Activities

Padding, inflating claims, faking accidents, lying on an insurance application, and making claims for injuries or damage that never occurred are just a few of the major insurance scams. Internal fraud, claims fraud, rate evasion, underwriting fraud, and cybersecurity fraud are all committed by applicants, policyholders, third-party claimants, and professionals offering services to claimants at various points in the process. As a result of the significant increase in fraudulent activities, insurance companies are projected to implement insurance analytics solutions in the following years. For example, the Coalition Against Insurance Fraud, in collaboration with SAS Institute Inc., predicted that around 10% of property-casualty insurance claims and loss adjustment expenditures would cost USD 34 billion annually in 2018. As a result, the industry's demand for insurance analytics is likely to rise.

Regional Analysis

Region-wise, the global insurance analytics market share is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

North America was the highest revenue contributor and is estimated to grow at a CAGR of 13% during the forecast period. . Insurers are using analytical tools to provide early insights for insurers to reduce potential risks for policyholders. In addition, these advanced analytical tools require intense research in data and thorough processing to get accurate results for decision-making. These factors, as a result, propelling market growth in the region. Furthermore, technological advancements and investments in advanced analytics in the insurance field are significant growth factors for developing the insurance analytics market. On the contrary, national & regional laws that manage insurers and general data use in North America present an opportunity for future insurance analytics market growth.

Asia-Pacific is the fastest-growing region. In addition, various governments across Asia-Pacific are encouraging & supporting the insurance industry by implementing advanced analytical tools & boost the revenue of their business operations. Moreover, the Asia-Pacific is predicted to grow faster with its rapid adoption of insurance technology. Furthermore, strong economic growth, rapid digitalization, and adoption of cloud-based services offer significant opportunities for market growth in the region.

Europe is the second-largest region. The Europe insurance analytics market is projected to reach USD 9215 million by 2030, growing at a CAGR of 14.6%. Continuous technological advancements in the insurance sector and an increase in adoption of insurance analytics technology among insurance companies, government agencies, third-party administrators, and brokers & consultancies drive demand for this market in the region. Furthermore, insurance companies in Europe are adopting analytical tools to minimize regulatory risks & reduce claim processing costs, further boosting the region's market growth. The firms in various European countries, including the UK, Germany, and France, are using insurance analytics, owing to their effective solutions for facilitating claim processes, streamlining premium collections, and driving operational efficiencies. Furthermore, insurance analytics help identifies characteristics and determinants for potential risk groups, leading to more accurate claims predictions and risk assessments. These are the significant factors for the growth of the insurance analytics market. 

Report Scope

Report Metric Details
Segmentations
By Component
  1. Solution
  2. Services
By Deployment Model
  1. On-premises
  2. Cloud
By Enterprise Size
  1. Large Enterprises
  2. Small & Medium Enterprises (SMEs)
By Application
  1. Claims Management
  2. Risk Management
  3. Customer Management
  4. Sales & Marketing
  5. Others
By End-User
  1. Insurance Companies
  2. Government Agencies
  3. Third-party administrators, brokers, and consultancies
Company Profiles Applied Systems IBM Corp Open Text Corporation Oracle, Pegasystems Inc Microsoft Salesforce.com Inc SAP SE SAS Institute Inc Vertafore, Inc
Geographies Covered
North America U.S. Canada
Europe U.K. Germany France Spain Italy Russia Nordic Benelux Rest of Europe
APAC China Korea Japan India Australia Taiwan South East Asia Rest of Asia-Pacific
Middle East and Africa UAE Turkey Saudi Arabia South Africa Egypt Nigeria Rest of MEA
LATAM Brazil Mexico Argentina Chile Colombia Rest of LATAM
Report Coverage Revenue Forecast, Competitive Landscape, Growth Factors, Environment & Regulatory Landscape and Trends
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Segmental Analysis

The global insurance analytics market share is segmented based on component, deployment type, enterprise size, application, and region. 

  • On the Basis of Component

By component, the global insurance analytics market is bifurcated into solutions and services. The solution segment was the highest contributor to the market and is estimated to grow at a CAGR of 13.7% during the forecast period. Insurance analytics solutions help companies optimize performance with predictive analytics, enhance customer experience, improve risk assessments, reduce claims costs, and ensure sustainable business growth. These factors, as a result, boost the development of the global insurance analytics market. 

The service segment is the fastest-growing segment. As the claims process is a critical component for achieving high operational efficiency and providing consumers with a better user experience, analytical services help in stimulating this process. Furthermore, an increase in demand for insurance analytics services such as customer analytics, which helps in early fraud detection, is anticipated to provide an immense opportunity to the market in the upcoming years.

In terms of deployment type, the global insurance analytics market is divided into on-premises and cloud. The on-premise segment was the highest contributor to the market and is estimated to grow at a CAGR of 10.8% during the forecast period. On-premise deployment allows insurance companies, government agencies, third-party administrators, brokers, and consultancies to store & use data in the office premises, secured and only used by authorized personnel. Therefore, these factors propel the growth of the on-premise segment.

The cloud segment is the fastest-growing segment. With cloud-based solutions, insurance policy providers can efficiently reduce various risks associated with business operations and integrate risk assessment reports within its framework to help protect data against multiple thefts and breaches. Therefore, these factors promote the growth of the cloud segment in the global insurance analytics market.

  • On the Basis of Enterprise Size

Based on enterprise size, the global insurance analytics market is segmented into large enterprises and small & medium enterprises (SMEs). The large enterprise segment was the highest contributor to the market and is estimated to grow at a CAGR of 14% during the forecast period. Large enterprises have an increased risk associated with them, such as the risk of theft, fraud issues, and financial losses. Therefore, insurance analytics helps overcome such risk factors and manage risks in advance. Thus, a rise in security issues within large enterprises propels the market growth. 

The SMEs segment is the fastest-growing segment. Small & medium enterprises are more prone to face security threats, frauds, business risks, and other risks. Hence, to deal with such casualties, these enterprises prefer insurance analytics solutions to overcome several business casualties such as risk management, customer analytics, reducing fraudulent cases, and predicting accurate risk for underwriting. Therefore, this is a significant factor that propels the growth of the global insurance analytics market. 

  • On the Basis of Application

By application, the global insurance analytics market is segmented into claims management, risk management, customer management, sales & marketing, and others. The risk management segment was the highest contributor to the market and is estimated to grow at a CAGR of 12.6% during the forecast period. Insurance analytics help make claim processes more efficient by introducing tools such as predictive analytics within the claims management to drive the decision-making process. Moreover, analytical tools offer early identification of complicated claims, fast-tracking of non-complex claims & identifying recoverable claims accurately. These are the key market trends expected to boost the insurance analytics market.

The sales & marketing segment is the fastest-growing segment. Sales analytics helps predict business growth outcomes and analyses the effects of discounts, special offers & campaigns, and sales incentives on revenues. Therefore, these factors are expected to boost the growth of insurance analytical tools for the sales & marketing segment in the upcoming years.

Risk management is the second-largest market. Insurance analytics offer risk management practices by providing insights to insurers on assessing, monitoring, and managing risks from all sources that have potential risks. Furthermore, analytical tools deliver comprehensive insights into all key risk areas to insurers to protect policyholders from various risk factors. On the contrary, underwriters can access data to evaluate an insurance application and the risks involved to achieve data-driven predictions. These factors, as a result, are expected to create lucrative opportunities for market growth.

  • On the Basis of End-User

Based on end-user, the global insurance analytics market is segmented into insurance companies, government agencies, third-party administrators, brokers, and consultancies. The insurance companies segment was the highest contributor to the market and is estimated to grow at a CAGR of 13.3% during the forecast period. The rise in the need to stay competitive in the global market and high insurance adoption have motivated insurance companies to opt for insurance analytics solutions. Moreover, digital transformation in terms of analytics applications in the insurance sector is accelerating radical innovations in product delivery and operating business models. These factors, therefore, propel the growth of analytical solutions among insurance companies. In addition, insurance companies are adopting & implementing innovative data infrastructure, artificial intelligence & machine learning algorithms to deploy effective analytics in insurance. This, as a result, is expected to provide immense opportunities to the market in the upcoming years.

The third-party administrators, brokers, and consultancies segment is the fastest-growing segment. With the provision of various services such as helping expedite claims, timely customer service, risk management, billing services, and data & analytics, third-party administrator (TPA) is increasingly adopting insurance analytical tools. Moreover, as brokers focus on different areas of mentioned perils in a policy according to customers' needs and demands, brokers are engaged in a digital revolution to focus on agility & customer-centricity by implementing advanced technological solutions. Therefore, these factors propel insurance analytics growth among third-party administrators, brokers, and consultancies.

Government agencies are the second-largest market. They are implementing insurance analytical tools to maximize profit & boost return on investment (ROI) to effectively use customer data for analyzing & predicting their demands and to accelerate sales of policies. These factors propel market growth. Moreover, as government agencies, while providing insurance policies, are involved & engaged in higher standards of data & confidential customer information in the backend operations, it promotes the use of insurance analytics in this segment. Moreover, companies operating as government-authorized agencies are increasingly investing in advanced technologies, which is expected to create lucrative opportunities for the market in the upcoming years.

Market Size By Component

Market Size By Component
  • Solution
  • Services
  • Recent Developments

    • June 2022 - IBM and SL Green Realty Corp. Manhattan's largest office landlord announced that SL Green is leveraging IBM sustainability software to help advance their company's environmental, social, and governance (ESG) strategy. SL Green will use software from Envizi, an IBM Company, to better understand and report on its environmental initiatives, identify opportunities for greater efficiency, and further drive sustainability across its extensive real estate operations.
    • May 2022 - EY and IBM announce an alliance expansion through a new initiative to help businesses around the world address some of the most pressing workforce challenges in the wake of the COVID-19 pandemic, including employee recruiting, retention, upskilling, and the need to transform HR systems technology at speed and scale.

    Key Players

    Insurance Analytics Market Share of Key Players

    Insurance Analytics Market Share of Key Players
    Applied Systems IBM Corp Open Text Corporation Oracle, Pegasystems Inc Microsoft Salesforce.com Inc SAP SE SAS Institute Inc Vertafore, Inc Others

    Frequently Asked Questions (FAQs)

    What is the growth rate for the Insurance Analytics Market?
    Insurance Analytics Market size will grow at approx. CAGR of 14.4% during the forecast period.
    Some of the top industry players in Insurance Analytics Market are, Applied Systems, IBM Corp, Open Text Corporation, Oracle, Pegasystems Inc, Microsoft, Salesforce.com Inc, SAP SE, SAS Institute Inc, Vertafore, Inc, etc.
    North America has held a dominant position in the Insurance Analytics Market, with the largest market share.
    The Asia Pacific region has experienced the highest growth rate in the Insurance Analytics Market.
    The global Insurance Analytics Market report is segmented as follows: By Component, By Deployment Model, By Enterprise Size, By Application, By End-User


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