18 Insurtech Facts and Stats

18 Insurtech Facts and Stats – Insurance Marketer

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There has always been insurance. But it wasn’t until the most recent changes in technology that its business model started to change in a way that had never happened before.

But what are the most important trends? Insurance is a complicated business, and it can be hard to figure out how to use this new technology. You don’t need to be a data scientist to come up with ideas for marketing.

In the first part of this article, we will talk about the technology that both insurtech companies and incumbents are using. Then I’ll give you 18 important facts and figures about how insurtech is changing the traditional insurance business model and making the customer experience better.

What Is Insurtech?

Insurtech is the use of new technologies like artificial intelligence, machine learning, blockchain, and even drone technology to improve and streamline the business operations of the insurance industry. It also helps to improve customer satisfaction across the insurance value chain, from product development to marketing to underwriting to claims processing.

Or watch this 3-minute explainer video on “Insurtech explained”:

What Are the Segments of Insurtech Utilized by Insurance Companies?

Some of the most common ways that insurance companies use insurtech are:

  • Artificial intelligence: Insurance companies now use computer software and algorithms that can do tasks that humans usually do, such as speech recognition, image analysis, and making complex decisions.
  • Machine learning: Insurance companies make and deal with a lot of information. Machine learning makes it easier to get data and figure out what to do with it. The data can help the company speed up the claims process, make sure the underwriting is correct, find fraud, predict the demand for products, and predict the risk of losses.
  • Blockchain: Blockchain has many uses in insurance, such as making it easier to share information, submitting claims, and keeping track of fraud. For example, claims can be settled in a matter of hours with smart contracts. (v.s. several weeks or months)
  • Robo-advisors are a type of digital financial advice that gives insurance and investment/wealth management advice based on algorithms and without the need for human financial advisors.
  • Internet of things (IoT): Insurance companies can now use GPS-enabled devices (telematics or mobile phones) to keep track of vehicles and driver behavior. The data collected is sent over a secure network in real time. The information can help car insurance companies give their clients better, more personalized service.
  • Drone technology: Drones can be used to check on properties when a person can’t get there. They can also be used to check out the scene of an accident.

 Here are 18 things you need to know about insurtech:

  1. In 2020, the size of the global insurtech market was put at USD 2.72 billion

From 2021 to 2028, it is expected to grow at an average rate of 48.8% per year. Market growth is likely to be driven by the growing need to digitize insurance services.

  1. In 2020, $7.12 billion was the most money ever put into insurtech around the world.

This year, it was raised through 377 deals, and funding for Life & Health insurtech will speed up even more in 2021.

  1. In the US, funding for insurtech has grown by 60% in 2020.

In the last three years, it went https://www.the-digital-insurer.com/10-insurance-innovations-for-2019-xl-innovate/from $1.46 billion to $2.44 billion.

  1. Four of the five biggest IPOs in 2020 were related to insurance technology.

With $913.5 million, GoHealth Inc. had the biggest float. Root Inc., Duck Creek Technologies Inc., and Lemonade Inc. each had IPOs that were worth $654.7 million, $465.8 million, and $366.9 million, respectively. (S&P Global Market Intelligence)

5.When companies use insurtech solutions, the time it takes to process an application can be cut by more than  99.9%

In response to the COVID-19 pandemic, more people are looking for service providers with strong digital skills.

  1. In 2019, insurance companies spent about $225 billion on IT departments.
  2. In the next few years, about one million jobs are likely to be taken over by machines.

Insurtech is saving insurance companies money by keeping them from doing the same things twice.

  1. Thanks to insurtech, between 50-60% of the back-office tasks at insurance companies can now be done automatically.

Only 4% of Millenials want to work in the insurance industry.

But now, insurtech is seen as a way to get people with technical skills into the industry.

10. 41% of people are likely to switch insurance companies to one that uses more technology. (PWC) In the wake of the pandemic, Insurtech is helping businesses get more clients.

  1. More than 30 percent of insurance companies now use robotic process automation to review claims.
  2. Insurance companies were one of the first businesses to use drones in their daily work.

Drones are used to look at land and buildings before a risk and damage assessment is done for property insurance and farming insurance.

  1. According to studies, by 2025, 95% of interactions between customers and insurance companies will be handled by chatbots.

As insurtech has grown, it has made it easier for both companies and their clients to get quotes and file claims. For example, more companies are using chatbots.

  1. With strong insurtech systems based on machine learning, insurance companies can use up to 90% of the information they get from their customers.

Without these systems, companies only use as little as 10% of the data they have.

  1. By the year 2020, robo-advisors will be in charge of $1 trillion in assets. (Business Insider)

This number is expected to go up even more, to $4.6 trillion by 2022.

  1. Top insurance companies are now using gamification to sell insurance products to hard-to-reach groups like Millennials and Gen Z.

With more than 60% of consumers willing to listen to marketing messages based on this, we could see more traditional brands use this method of marketing in the coming years.

  1. Up to 60% of drivers may use their phones while driving.

It was a guess based on data from 60 billion trips in 2018 from Zendrive, a mobile app that tracks how customers drive so they can offer them discounts based on how they drive. (From The Economist.)

  1. Fraud is a big problem that costs US insurance companies more than $40 billion every year.

Al can help find fake claims by comparing new claims to data that has already been collected. Visual analytics can look at pictures and videos to figure out if the damage claims for a car or other property are true or not. (Business.com)

How Insurtech is used in the insurance business

Insurtech is being used by a lot of companies today. Here are a few real-world examples of how they use technology as part of their business model:

  • Lemonade: In claims settlement, Lemonade’s “AI Jim” evaluates the claim by cross-referencing home information, comparing it to the customer’s policy, running fraud algorithms, and then approving or rejecting the claim. The whole process takes up to three minutes and is approved in seconds.
  • Hippo: They use a drone to inspect the damage or an app that lets a remote adjuster take pictures and videos of it. Our customers hear back from Hippo in 5 to 7 days (versus the industry average of 10 days). That’s between 30% and 50% faster than before.
  • Beam: This dental insurance company gives its customers a “smart toothbrush” that can keep track of how often the user brushes his or her teeth. The information is used to make insurance plans that are unique to each customer.
  • John Hancock: This life insurance company gives their customers life insurance policies based on the information they get from wearables and their telematics monitor.
  • Shift Technology, a startup based in Paris, has made an AI-powered solution that can supposedly spot potential fraud 75% of the time, which is twice as good as the market standard.
  • Zhong An: This company has been around since 2013 and only does business online in China. They are a great example of insurtech because they are used by more than 460 million people. In 2019, they have written nearly 10 billion policies without leaving a paper trail or having customers come to the office.
  • Teambrella: is a peer-to-peer service where people can cover themselves and vote on things like premiums and reimbursements. Through blockchain, payments are handled in a safe way.

Conclusion

Insurtech is the industry’s light that will bring a wave of digital change and new business opportunities. From the facts and figures above, it’s clear that insurtechs will continue to be a key part of the industry’s efforts to make the changes that customers want.

Sources

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