BASINGSTOKE, England--(BUSINESS WIRE)--A new study from Juniper Research has found that insurance premiums generated by emerging insurtech services will exceed $400 billion by 2023, up from an estimated $187 billion in 2018. The research found that insurtech platforms will equip insurers to meet the challenges of diminishing margins and increased competition, creating an opportunity insurers cannot ignore in the future.
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% of the global insurance market by 2023, compared to approximately 4% in 2018.
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AI Claims Management to Drive Cost Savings
The new research, Insurtech: Cost Savings, Insurer Readiness & Market Forecasts 2018-2023, found that despite still being in early deployment stage, the introduction of AI 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.
Research author Nick Maynard explained: “AI vendors such as Tractable are revolutionising claims, demonstrating the potential of AI in claims management. In a time of stagnating combined ratios, AI has the potential to make a tremendous difference to insurer’s margins.”
Progressive Insurers Setting an Example
Juniper’s Insurtech Readiness Index analysed leading insurers to evaluate their readiness scores and ranked the top 20 based on several metrics, including insurtech offerings, investment and future potential. The top 5 players leading insurtech transformation were:
1. AXA
2. Allianz
3. Ping An
4. Aviva
5. UnitedHealth
AXA was found to be the clear leader, 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.
Juniper Research is acknowledged as the leading analyst house in the digital commerce and fintech sector, delivering pioneering research into payments, banking and financial services for over a decade.
