Insurance premiums generated by emerging insurtech services could be as high as $406 billion by 2023, according to a new study from Juniper Research. The current level is $187 billion, the research firm says.
The report, “Insurtech: Cost Savings, Insurer Readiness & Market Forecasts 2018-2023,” part of which was excerpted in a white paper, defines insurtech as “The application of new technologies to the insurance industry to improve efficiency, drive savings and improve the customer experience.” New channels and applications of these technologies in underwriting and distribution lead to Juniper’s assertion that 10% of global insurance premiums will be attributed to the investments insurers are making in advanced tech today. But that’s not the only place insurtech’s impact will be felt, the company continues.
“Distribution methods have been radically altered in most markets and segments, with digital distribution and price comparison websites becoming firmly entrenched,” Juniper writes in the “Why Insurers Must Invest in Insurtech” whitepaper. “However, while many insurers have moved online and diversified their distribution channels with price comparison websites, the process of receiving notification of loss, managing claims and underwriting risk is largely unchanged compared to 20 or 30 years ago.”
One technology Juniper expects to be especially disruptive is AI. In the firm’s view, most of the largest insurers will adopt AI within five years, if for nothing else besides claims.
“The processing of data on an automated basis for claims is too big a gain for insurers to ignore,” Juniper writes, forecasting 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.”
