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In 2018, InsurTech was one of the most attractive and rapidly developing segments of the digital economy. As Bitnewstoday wrote earlier, 80% of traditional insurance market players saw a threat in an upcoming technological breakthrough. Changes are inevitable: a vast number — about 70% — of consumers, aged 18 to 30 years, does not trust the traditional banking, insurance, financial structures and prefers to use the new age technological services, as was previously reported by Business Insider Intelligence.
Now, a new large-scale report by Technavio, released in February, provides an extensive analysis of the prospects of InsurTech on a global market scale over the next five years, from 2019 to 2023. Resume: the opportunities are impressive.
Insurance business trends for 2019-2023
M2M — Machine-to-machine. Managing, tracking and monitoring data in organizations that obtain more devices every day is not so simple. The trend is the complete digitalization of data and the exchange of data between machines. This will simplify the management, monitoring and maintenance of all connected devices. Organizations will experience the improvement of business processes when the full transition to digital format eventually happens.
Integration of Big Data and Artificial Intelligence. Insurtech companies need to analyze huge amounts of information that will help them segment customers, explore opportunities for new products and services, optimize pricing mechanisms. Using a large amount of data will help in improving investment decisions and allow insurance companies to develop a comprehensive scoring mechanism. Analytics will learn to identify hidden patterns in the data using complex models and will predict results on its basis. There are ideas on how to use artificial intelligence and robotics to automate many processes in InsurTech solutions, and this is only the beginning.
The growth of the European market. The market of the Old World will grow at a faster pace than the other ones. This is due to the fact that the information itself has become a strategic asset throughout Europe, and the level of technology adoption in this region is higher. InsurTech is characterized by a high level of development of data analytics. This can be used to obtain information at all stages of the life cycle of insurance, such as customer targeting, pricing, product development, claims processing. In short, all the necessary information for the customization of insurance products on the European market.
Numbers, Numbers, Numbers
As for the predictions in numbers, analysts highlight a few key points here:
Global InsurTech market size will grow at a CAGR of more than 41%. However, the growth momentum of the market is expected to decelerate due to a decline in year-over-year growth.
It is assumed that in real terms the market will grow by $15.63 bln. The European market will provide 51% of the growth.
In 2019, the year-over-year growth rate of the market is estimated at 45.66%.
InsurTech has made a quantum leap in its development over the previous year and is not going to stop. At the moment, the vector of development of insurance projects is aimed at on-demand accessibility for real-time data synthesizing. With the growth of companies and their entry into global markets, this factor is significant and allows enterprises to:
transform, control and manage data;
understand business processes;
eliminate misunderstanding between business and IT.
InsurTech projects are very active in the traditional insurance business and flip the game, eventually. Business understands this fact and likely takes on new players as allies. Without this, their market shares will be diminishing quite rapidly. It seems that in the next five years, the insurance market will change beyond recognition.
Image courtesy of Readwrite
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