InsurTech or insurance technology refers to the use of technology innovations in the insurance industry to enhance the efficiency of different functions. The insurance sector is benefiting hugely from the adoption of new technologies, which have opened up new revenue model and value chain. The InsurTech software helps simplify the decision-making process.
Owing to the increasing number of devices, management, monitoring, and maintenance of data in an organization have become increasingly complex and challenging. As a result, it is expected that the digitization for M2M (machine-to-machine) communications will increase in the days to come, as it helps simplify the management, monitoring, and maintenance of connected devices.
So, insurance providers across the globe are likely to increase the adoption of digital technologies to enhance their market presence, and increase their customer base and custom offerings. This, in turn, will boost the growth of the global insurtech market, which is predicted to grow at a CAGR of 16% during 2018 to 2023. The global insurtech market was valued at $532.7 million in 2018 and is projected to reach $ 1,119.8 million by 2023.
Specific areas that are expected to record high growth are machine-to-machine (M2M) communications and business process management. Big Data and AI are going to play the key role in the growth of the insurtech market. More and more insurtech companies will be using them to analyse data and thereby improve customer service and identify new opportunities.
The adoption of digital and analytical tools has also opened up new revenue model and value chain, which will further prompt insurance providers to adopt and implement these technologies. As the insurance market in most countries has matured, the adoption of insurtech software will increase in the coming days, as it helps open up new growth opportunities.
Presently, North America has the highest acceptance of insurtech and this can be attributed to high expenditure incurred on insurance by customers in this region. The insurance providers of this region are also providing flexible and customized insurance for health, property, and others, which explains the high expenditure being incurred on insurances.
In the coming years, the Asia-Pacific region is going to register an impressive growth in the insurtech market. During the period 2018 to 2023, the Asia-Pacific region is expected to grow at the highest CAGR and provide enormous growth opportunities to insurtech vendors, mainly due to the existence of financial hubs in Singapore, Hong Kong, and India. Some key players operating in the global insurtech market are Oscar, Armour, ZhongAn, Shift Technology, Trov, and Quantemplate.