Insurtech trends show that insurtech is the insurance industry’s latest evolutionary phase, as it includes the use of technology to improve its efficiency. In other words, insurtech is the union between insurance and technology.
Therefore, many companies working in this niche have been established. They all provide various innovations and techniques designed to explore and improve the ways insurance processes are carried out.
Below, we will consider information and facts that will significantly enhance whatever knowledge you have about insurtech and open your eyes to new possibilities.
Insurtech Trends for 2022 (Editor’s Choice)
- The United States represents one of the three leading insurtech hubs globally
- In 2019, the global insurtech market revenue totaled $5.48 billion
- Insurtech’s global market size was at $2.72 billion in 2020
- There were 1,003 active insurtech companies in Europe in 2020
- Insurtech’s global market size was valued at $3.85 billion in 2021
- The US accounts for almost 45% of the insurance market share worldwide
- 197 deals were made in the insurtech sector globally in the first quarter of 2021
- The global insurance market is predicted to reach almost $152.5 billion by 2030
Global Insurtech Trends
For a long time, global technology has been making a significant impact on the processes involved in insurance.
1. In 2019, the global insurtech market revenue was worth $5.48 billion.
(Businesswire)
During the six years following 2019, the global insurtech market revenue is expected to almost double, growing at a CAGR of 10.8%. This business now seems to be at a key inflection point, according to insurance industry statistics.
Also, many experts consider insurance digitalization the next great opportunity after fintech. Currently, there are thousands of fintech companies globally.
2. Between 2019 and 2020, the European insurtech sector increased by 31% in received investments.
(NTT Data)
Moreover, the Asian insurtechs enhanced their numbers by 11% during that same period. However, even with the rise in investments in other regions, their fall in the US had a significant impact on a global level. In other words, North America is the most powerful region for the insurtech industry on both the invested side and the investor company side.
3. In 2020, the global insurtech market size was valued at $2.72 billion.
(Customer Think)
Due to its high adoption rate, the insurtech market offers many growth opportunities for insurtech companies.
For example, the primary reasons for the rise of this industry are the innovative technologies, stable business models, and the fact it represents a low-cost, high-value alternative.
4. In Q2 2020, global insurtech financing activity rebounded to $4.8 billion.
(Statista)
This followed a severe drop in the first quarter of that year due to the global pandemic, as per insurance facts from 2020. More specifically, insurtech financing dropped by over 50% in the first quarter of 2020 and was under $1 billion.
5. In 2020, there were 1,003 active insurtech companies in Europe.
(Statista)
Direct insurance, comparison websites, and product development were the most active business channels in which insurance companies were competing. Then again, underwriting and microfinance represented less competitive areas.
6. Insurtech trends for 2021 show that the market was worth $3.85 billion.
(Grand View Research)
The rising number of insurance claims globally is one of the primary factors maximizing the insurtech market growth.
Moreover, insurance companies are progressively investing in digital technologies to decrease operational costs and enhance efficiency and customer experience.
7. A Spanish platform raised $1.8 million to support the European insurtech framework.
(Tech EU)
Insurance technology news from March 2022 reveals that Wenalyze, a Valencia-based insurtech, is the startup that raised this capital. Athos Capital led the round, while Bankinter participated through its venture capital program.
8. In 2020, insurtech companies and global insurance raised $3.83 billion from IPOs.
(SPGMI)
More specifically, this represented the largest amount in about five years. Furthermore, the $1.59 billion in the fourth quarter of 2020 represented the greatest amount for a year’s final quarter after 2015.
Insurtech Trends in the US
Through unique innovations and technologies such as AI, machine learning, virtual reality, and advanced analysis, various trends are being introduced that will further disrupt this industry in the US.
9. The US is one of the three leading insurtech hubs worldwide.
(InsurtechDigital)
Based on a Porch study, the first leading hub for insurtech is the US, with somewhere around 1,370 insurance tech companies. In fact, many people have found success in insurtech because of a competitive marketplace. Moreover, the second leading insurtech hub in the world is the UK, followed by Germany.
10. The US accounts for 44% of the insurance market share globally.
(InsurtechDigital)
Also, the US is the home to some of the greatest names in insurtech. For instance, Lemonade and Hippo Insurance are pioneering companies that leverage the most transformative technologies to redefine how people look at insurance.
11. Oscar is one of the top US insurtech startups, with $1.6 billion in total funding.
(Insurance Business America)
More specifically, this company uses tech data and design to provide health insurance products for individuals, families, and small businesses.
Another company with the same total funding as Oscar is Bright Health. Namely, this diversified health insurtech startup offers a wide range of services and benefits to consumers and health providers in local markets.
Insurance Tech Hot Topics From 2020 and 2021
In the last several years, technology such as data analysis and AI has been speeding up the insurance business. Let’s look at the numbers.
12. The record-breaking year regarding global funding of the insurtech industry was 2020, with $7.5 billion raised.
(BCG)
More specifically, this represented a 21% increase compared to the previous year, when the global funding was $6.2 billion. All in all, it was the highest annual mark for this industry, despite the COVID-19 pandemic.
13. In 2020, 87% of insurance CIOs showed a rise in digital channel use to reach customers.
(LEK, The Future Laboratory)
That was uncovered by the Gartner insurance trends data. Moreover, 75% reported a rise in self-service use among their customers.
Insurance was reinvented in line with changing consumer expectations, behaviors, and demands before the COVID-19 pandemic. As we look into the forthcoming years, this trend shows no sign of slowing down.
14. In H1 2021, 197 deals were made in the insurtech sector globally.
(Statista)
In 2020, there were 329 such deals, showing a decrease from 440 deals in 2019.
The record-breaking year in terms of these deals in the last eight years was 2018. That year, 458 deals were made in the insurtech sector worldwide.
15. Insurance industry trends from 2021 show that $7.1 billion was invested in global insurtech companies in H1 2021.
(Statista, WillisTowersWatson)
Moreover, the investment capital volume in the first three quarters of 2021 exceeded $10 billion for the first time in one year.
Then again, in 2020, approximately $16.5 billion was invested in global insurtech companies. In comparison, in 2019, the total investments in global insurtech companies amounted to $14.1 billion.
Insurance Industry Facts and Stats for the Future
The global insurtech market is expected to grow significantly during the forthcoming years, owing to factors such as simplification of the claims process, improved communication with the client, and the capabilities to implement automation.
16. By 2025, insurtech will account for 8% of the global insurance premiums.
(Juniper Research)
New research on insurtech ranked the largest insurtech insurance companies in terms of investment, innovation, and adoption. Namely, the leading five were:
- Allianz
- Axa
- Humana
- Ping An
- Munich Re
Moreover, Ping An is set to invest $1 billion annually in insurtech.
17. In 2025, the generated premium value of insurtech platforms will surpass $556 billion.
(Juniper Research)
In 2020, the value of these premiums was somewhere around $250 billion, so it will increase by 123%.
According to some predictions, if insurers in the life, motor, home, and health industries fail to capitalize on the benefits of the AI underwriting system, they will become less attractive to potential customers.
18. The global insurtech market revenue is forecast to amount to $10.14 billion by 2025.
(Mordor Intelligence)
Insurtech trends predict that between 2019 (when the revenue was $5.45 billion) and 2025, the revenue will rise at a 10.8% CAGR.
More specifically, the health insurance market will have the highest growth rate in the forthcoming years.
In fact, the insurtech adoption in the health insurance market is considerably higher than that of other insurance sectors, like the one offered by auto insurance companies, property and casualty, etc.
19. As per some predictions, the global insurtech market will reach $152.43 billion by 2030.
(RM)
The latest insurtech trends reveal that the market will increase at a CAGR of 51.7% between 2022 and 2030.
Overall, the increasing awareness of the insurtech solution benefits in improving communication, simplifying the claim procedure, and implementing automation are forecast to drive this market rise.
Let’s not forget to mention that in the next three to five years, almost 85% of insurance corporations will begin to cooperate with fintech companies.
Conclusion
If you find yourself asking, “What is insurtech?” the above facts and stats should serve as a perfect guide to understanding all there is to it. In light of its current fame across the entire world, it’s pretty much obvious that it won’t be dwindling anytime soon.
Insurance technology emerged a decade ago and brought lots of technological innovations to the insurance industry. These all contributed to greater efficiency, more investments, and new companies and work opportunities.
People Also Ask
How many insurtechs are there?
Crunchbase is a popular platform for finding business information. According to this platform, there are somewhere around 1,100–3,475 insurtech companies.
All in all, insurtech is a mixture as an industry. In other words, IT and software companies account for around 48% of the industry, 17% are either in AI or data & analytics, and about 11% are insurers venturing into tech.
Why do we need insurtech?
Insurtech is all about technology and innovation used to optimize the business model within the insurance sector.
For example, special devices that enable the collection of driving data to enhance the whole insurance process are just one of those things. In other words, the entire insurance process is optimized.
The benefits of insurtech include reduced costs, global business expansion, improved customer experience, products and services offered remotely, improved security and fraud detection, etc.
Who uses insurtech?
As the name suggests, insurance companies use insurtech. As a matter of fact, these companies use technology to provide better service, streamline their operations, or save money. For instance, smartphone apps and chatbots are typical examples of insurtech.
Moreover, some of the best insurtech startups in the United States are:
- Oscar
- Bright Health
- Clover Health
- Next Insurance
- Amwell
What is insurtech?
Insurtech refers to the development of new services and products in the insurance sector using technology. In other words, insurtech combines disruptive innovation strategies and digitalization with the insurance sector. Technologies like AI, machine learning, or big data in the insurance sector and startups that focus on providing these solutions have enhanced insurtech, as insurtech trends show.
