The global Insurtech market is driven by the rapid digitization and growing adoption of advanced technologies, such as machine learning, the Internet of Things (IoT), cloud computing, etc. These technologies generate large volumes of data that help insurance companies to track and analyze consumer behavior and remodel the insurance industry model to fill the scantiness of the market. the global Insurtech market was worth USD 5.3 billion in 2020. According to the study, the market is estimated to grow at a CAGR of 10.6% (2021-2027), earning revenue of around USD 10.7 billion by the end of 2027. The global Insurtech market is driven by the rapid digitization and growing adoption of advanced technologies, such as machine learning, the Internet of Things (IoT), cloud computing, etc. These technologies generate large volumes of data that help insurance companies to track and analyze consumer behavior and remodel the insurance industry model to fill the scantiness of the market. Additionally, developing economies such as India, China, Singapore, China, etc., are emerging with growth potential due to the rising number of Insurtech start-ups. However, data privacy and cyberattacks may be a major constraint on the global Insurtech market.
Every strand of commerce and government agency, including the global insurance industry, is fiercely seeking the advantages of a digital environment. As business models change, insurance companies worldwide are turning to innovative digital solutions to scale their operations and provide a more customized consumer experience. As a result, the fast digitalization of existing insurance business models is moving the worldwide Insurtech industry forward and contributing to the market growth. Cloud computing has revolutionized many industries with its ease of deployment, resiliency, and versatility, and the insurance industry is no exception. The rising adoption of cloud computing in various industry verticals, especially after the COVID-19 outbreak, is significantly driving the growth of the Insurtech market. Insurance companies across the globe are deploying cloud computing to improve their business model. Cloud computing offers better internal and external data management with a higher level of security. It also provides rapid deployment and easy integration that does not hinder the workflow. Based on services, the Insurtech market is segmented into consulting, support & maintenance, and managed services. The managed services segment accounts for the largest share in the Insurtech market. Managed service providers offer insurance companies with their expertise and knowledge of advanced technologies to improve business efficiency and bring out the best in their business models.
The Insurtech market is segmented into automotive, BFSI, government, healthcare, manufacturing, retail, transportation, and others. BFSI segment has dominated the market due to the expanding banking sector and the growing volume of data which can now be tapped into by Insurtech companies for better services, enabling businesses to improve efficiency and optimize overall costs. The health sector is projected to grow at the fastest rate in the forecast period, as Insurtech adoption is significantly higher than in other insurance sectors. Health insurance companies also use insurance solutions to expedite claim processing. Various technological developments and the adoption of digital core legacy systems for the automation of back-office operations are also contributing to the market’s growth. Other reasons, such as widespread use of the platform and peer-to-peer business models and lower insurance premium rates leading to a rise in the number of policymakers, are expected to propel the industry even further. Geographically, the Insurtech market is segmented into North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa. The North America region captured a significant market share in the global Insurtech market in 2020. The high-cost spending of insurance premiums and the use of digital technology to track and manage insurance claims have attracted US investors. Due to insurers’ online presence and digital technologies to track their insurance claims, the United States has seen considerable investments from Insurtech providers, and it represents a significant potential market. Various start-ups have emerged in the United States, identifying the potential for better customer-focused insurance services. The global Insurtech market is fragmented in nature, owing to the presence of a high number of small businesses catering to the demands of life and non-life insurance sectors. With the rising preference for technical improvements in the insurance sector, such as artificial intelligence, machine learning, and blockchain technology, the number of deals made has been steadily increasing over the last few years. Insurtech firm’s ability to promote insurance industry innovation by generating new products will aid insurance companies in meeting the changing needs of their customers. As a result, various Insurtech companies are gaining traction by providing a new and diverse set of services. They’re also attracting a significant investment, which will help them expand. Insurtech firms, for instance, are employing deep learning-capable artificial intelligence (AI) to assist agents in managing their responsibilities more swiftly and determining the best combination of policies to complete a user’s coverage. Hyper automation, a combination of ML (machine learning), AI (artificial intelligence), and RPA (robotic process automation), is already proving popular among rapidly scaling Insurtech start-ups looking to differentiate themselves in the market by offering quick services, mobile technology, and low operating costs. Furthermore, the adoption of competitive strategies, such as partnerships, mergers, acquisitions, joint ventures, etc., is also prominent in this market.