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Insurtech Market: Information by Type (Auto, Home), Service (Consulting, Managed Services), Technology (Blockchain), End-User (Automotive, BFSI), and Region — Forecast till 2030

Market Snapshot
Study Period:
2020-2030
Base Year:
2021
Fastest Growing Market:
Europe
Largest Market:
North America
CAGR:
46.10 %
Key Players
Damco Group

DXC Technology

Insurance Technology Services

Majesco

Oscar Insurance

The global Insurtech market size is expected to reach a valuation of USD 114,489 million by 2030, growing at a CAGR of 46.10% during the forecast period (2022–2030). Insurtech focuses on applying technological advancements to the existing insurance sector paradigm to extract cost advantages and efficiencies. Influenced by the phrase fintech, Insurtech is a portmanteau of the concept’s "insurance" and "technology."

The insurance organization's perception is ripe for growth, and upheaval drives Insurtech companies' and venture capitalists' investments in the space. Insurtech is pursuing opportunities that traditional insurance companies are less likely to follow, such as providing ultra-customized policies, social insurance, and dynamically pricing premiums based on observed behavior leveraging new data streams via Internet-enabled devices.

Global Insurtech Market Share

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Market Dynamics

Drivers: Insurtech Growth Driven by Reinsurer Support

Reinsurers actively engage in two key roles: supporting Insurtech via funding and offering important underwriting capabilities. Reinsurers are designing digital technologies and putting capital into Insurtech.

For example, Munich Re-established Digital Partners, a digital technology provider with direct investments in certain Insurtech.

 - Ping A funded fin leap, a FinTech and Insurtech ecosystem incubator that Hannover Reinvested in.

 - Swiss Recreated a separate subsidiary for iptiQ, its white-labeling digital insurance platform. iptiQ is a digital B2B2C platform that offers digital processes to partners and protective goods to clients. It creates alliances to sell insurance through well-known brands.

Reinsurers are also partnering with full-carrier Insurtech to boost their underwriting capacity, allowing them to focus only on customer experience and adoption.

  • Metromile, a pay-per-mile auto Insurtech based in the United States, works with a small panel of reinsurers and has spent roughly 14% of its net premiums on reinsurance commissions over the previous five years.
  • Based in New York, Lemonade uses a panel of seven quota-share reinsurers to handle 75% of claims, with a ceding commission of 25%. According to the NYSE-listed Insurtech, Reinsurance helps cushion against loss variations and makes income and profits highly sustainable.

Reinsurers are turbocharging Insurtech development, especially for Insurtech full carriers, via these strategic bets while also maintaining their place as the custodian of asset allocations from across the insurance sector.

 

Drivers: Consumer Benefits

Insurtech is driven by consumers, who may assign value to every aspect of their life. It allows friends, family, and other community members to be included in comprehensive coverage. Consumers are involved in the entire process, from registration to claims, and they even have a say in who sits on the insurance claim jury panel during a hearing. This greater degree of knowledge and participation benefits customers.

Most individuals nowadays do all of their work on their smartphones. When it comes to insurance, customers expect the same mobile convenience. Consumers may research, confirm, and make decisions using Insurtech from the comforts of home. Insurers and Consumers will save time by being able to verify the status of claims from their mobile devices.

Organizations that use Insurtech have strict anti-spam and security standards to ensure that consumers have confidence during online transactions. It also allows the insurance firm to collect and analyze consumer data, enabling personalized services and solutions. Thus, benefits for consumers like empowering the consumer, ease of access, convenience, enhanced security, and personalization are driving the growth of the Insurtech market across the globe.

 

Restraints: Privacy Concerns

The most significant barrier to Insurtech is the question of privacy. Credit scores are tracked using distributed ledger technology, a shared database shared across different companies and sites. It is constantly changing, posing problems for data protection legislation. Regulators with diverse distributed ledger technology management methods face privacy issues from international jurisdictions. Distributed ledger technology may be decentralized owing to its collaborative nature, which means that no single organization can be held accountable in the event of a dispute. This makes fully integrating into Insurtech problematic.

Thus, the privacy concerns linked to Insurtech are expected to impede the Insurtech market growth during the forecast period. Those interested in this technology should look into the strategic legal implications for their jurisdiction and firm. Another option is regularly keeping in touch with regulators to stay current on international legislation. Insurtech is transforming the insurance sector by allowing customers and service providers to conduct business seamlessly, error-free, and secure. Insurance corporations must invest in new technologies and tailor solutions to specific needs to best serve customers.

 

What Are Future Growth Opportunities in Insurtech Market?

Burgeoning Opportunities in Insurtech Market

The CAGR for the market of Insurtech is expected to be more than 46% over the forecast period. Surprisingly, major full-service carriers Lemonade, Root, and Metromile and a slew of smaller businesses are driving growth. This unique occurrence demonstrates how Insurtech is growing and gaining traction with customers. The rising digital environment has aided this expansion by boosting mobility, travel, health, and home coverage options. As a result, many industry organizations enthusiastically collaborate with Insurtech to capitalize on this mutually advantageous potential.

Insurtech enablers are launching new initiatives and cooperating with major software companies to get into the market.

 - Upptec, a Swedish vendor of content-based automated claim technologies for home and travel insurance, has joined Guidewire PartnerConnect as a Solution Partner to assist underwriters with claim content automation.

 - Zurich-based A new health and wellness administration cloud solution has been developed by dacadoo, a digital health engagement platform, in collaboration with Oracle.

 - Philadelphia-based Life.io, a customer engagement platform, teamed up with Unqork, an enterprise no-code platform, to offer insurers an easy-to-use digital purchase tool.

 

Impact of COVID-19

The COVID-19 pandemic has heightened coverage demand and create opportunities for new players.

Covid -19 Impact On Market

Individuals and organizations have long sought to manage risks such as health and family security, accidents, property loss, and natural disasters. Customers who have been shocked by the extraordinary impact of COVID-19 are now putting health and safety, financial security, and business continuity at the top of their priority list. However, attitudes and actions toward insurers have shifted. After the pandemic, consumers want a frictionless digital experience throughout the insurance procedure. They're on the lookout for companies who prioritize the CARE equation, including Convenience, Advice, and Reach as key customer engagement pillars.

As a result, consumers' desire to purchase insurance grew. Most insurers concentrated on overcoming the new challenges by smoothly moving to a remote-work environment and giving premium relief. According to the Insurance Information Institute, US auto insurers announced refunds, reductions, dividends, and credits totaling USD 10.50 billion to recognize policyholders driving less frequently during COVID-19.

At the same time, carriers were dealing with a difficult financial situation, with global pandemic claims totaling USD 203 billion since the first COVID-19 outbreak. Customer trust was also eroded by protracted lockdowns and social distancing norms, the lack of quick customer-insurer interactions, and limited digital capabilities. Most insurers claim that their policies do not cover COVID-19 business interruptions. According to a Bloomberg Intelligence litigation tracker study, US carriers have obtained dismissal in more than 80% of connected court judgments.

 

Market Recovery Timeline and its Challenges

The post-pandemic period will be crucial for the global Insurtech market. The market's growth is likely to be hampered due to a lack of awareness about Insurtech's benefits and skilled professionals working with advanced technologies. On the other hand, factors like the rising demand for reinsurer support and multiple customer benefits will likely continue to drive the market growth over the forecast period.

 

Segmental Analysis of Insurtech Market

The global Insurtech market share has been classified based on type, service, technology, end-user, and regions.

The Insurtech market has been segmented into auto, business, health, home, specialty, travel, and others based on the type. The health type segment is expected to dominate the global market. It is projected to reach USD 31,944 million by 2030, registering a CAGR of 48.10% during the forecast period. The growing need for digital platforms that connect health insurance carriers, providers, brokers, and exchanges is expected to drive demand for the health sector. Advanced analytics are being used by life and health insurers to represent the best and comprehend their consumers. Many health insurance firms are using Insurtech solutions to expedite claim processing. For increased convenience, insurers aim to merge their healthcare insurance solutions with mobility features.

The Insurtech market has been segmented into consulting, support and maintenance, and managed services based on service. The support and maintenance service segment is expected to dominate the global market during the forecast period. The increased adoption of modern technologies and distribution channels by insurance firms can be ascribed to the evolution of the support and maintenance segment. Many insurance businesses worldwide are working on installing sophisticated technologies and adapting legacy software packages to meet unique requirements. This is likely to grow the global demand for support and maintenance services.

The Insurtech market has been segmented into the blockchain, cloud computing, IoT, machine learning, Robo advisory, and others based on technology. The cloud computing technology segment is expected to dominate the global market, and it is projected to reach USD 28,052 million by 2030, registering a CAGR of 46.10% during the forecast period. Cloud computing has revolutionized the insurance sector with its inventiveness, simplicity of implementation, and adaptability. The expansion is projected to be fueled by the universal popularity of Bring Your Own Device (BYOD) rules and the enormous amount of data that insurance carriers collect. Benefits such as quick deployment, cost-effectiveness, and sustainability drive insurance businesses to use cloud computing technologies.

 

What is the Contribution of the End User Segment in Driving the Global Insurtech Market?

The Insurtech market has been segmented into automotive, BFSI, government, healthcare, manufacturing, retail, transportation, and others based on end-user. The healthcare segment is expected to dominate the global market, and it is projected to reach USD 12,890 million by 2030, registering a CAGR of 49.10% during the forecast period.

The uptake of Insurtech solutions in the healthcare business is likely to be driven by increased digitalization in the insurance market. The increasing number of devices has necessitated data monitoring, management, and maintenance across healthcare institutions. Customers' increasing digitalization has increased demands for better and easier access to insurance technologies and services. In addition, the increased usage of blockchain-based technologies by health and life insurance businesses is likely to propel the industry forward.

Insurtech Market Share

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Regional Analysis of Insurtech Market

The global Insurtech market share has been segregated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa. 

Why is North America a Lucrative Market for Insurtech?

With a market value of USD 47,643 million by 2030, registering a CAGR of 48.10%, North America is expected to be the most prominent Insurtech market. Since customers are spending more money on insurance-related products, Insurtech solutions are becoming more popular in the region. Secondly, these solutions provide customizable and adaptable property and health insurance options. The expanding number of Insurtech startups also fuels the region's market expansion.

Europe is expected to be the second-largest Insurtech market with a value of USD 34,182 million by 2030, registering a CAGR of 47.10% during the forecast period. Due to multiple rising economies and financial hubs in Germany, France, and the United Kingdom, the region is likely to grow significantly. Insurers in the area are attempting to provide inexpensive insurance premium options. The regional market is expected to rise as smartphone adoption increases across Europe.

 

Top Key Players

  • Damco Group
  • DXC Technology
  • Insurance Technology Services
  • Majesco
  • Oscar Insurance
  • Quantemplate
  • Shift Technology
  • Trov Inc.
  • Wipro Limited
  • ZhongAn Insurance
  • Acko
  • Coya

 

Recent Developments

  • April 2022- Shift Technology Taps into Legentic Data to Help Insurers Make Better Decisions About Suspicious Claims
  • March 2022- DXC Technology Increases Focus on Insurance Software and Business Process Solutions.
  • November 2021- Oscar Health, Inc. Announces Partnership with Stride Health to Provide Best-In-Class Enrollment Experience for Members and Brokers.
  • November 2021- Property and casualty insurer Heritage Insurance Holdings Inc. established a relationship with Slide, an Insurtech P&C carrier. Due to this relationship, the former company would use Slide's skills to better underwriting and rating judgments.

 

Global Insurtech Market: Segmentation

By Type

  • Auto
  • Business
  • Health
  • Home
  • Specialty
  • Travel
  • Others

By Service

  • Consulting
  • Support and Maintenance
  • Managed Services

By Technology

  • Blockchain
  • Cloud Computing
  • IoT
  • Machine Learning
  • Robo Advisory
  • Others

By End-User

  • Automotive
  • BFSI
  • Government
  • Healthcare
  • Manufacturing
  • Retail
  • Transportation
  • Others

By Regions

  • North America
  • Europe
  • Asia-Pacific
  • Latin America
  • The Middle East and Africa
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