• Janthana Kaenprakhamroy, Founder and CEO at Tapoly


• 30.01.2024 01:00 pm
#insurtech #technology

The global insurance industry is poised for an exciting and profitable year. Last year, startups in the insurtech space received an increase in funding, indicating a renewed sense of confidence amongst investors in the sector. Now, with an influx of investment at the helm, technological advancements, evolving customer expectations, and changing regulations are taking place within the industry. Here’s a look at some of the developments that will shape the insurance industry this year. 

Cyber insurance boom

In 2024, cybercrime is projected to cost the world 9.5 trillion dollars annually, rising to $10.5 trillion in 2025. As more businesses fall victim to attacks such as data breaches, malware, or phishing campaigns and consequently seek cyber insurance for risk mitigation, cyber insurance is transitioning from a specialized offering to an essential product. As a result of advances in the sector, the global cyber insurance market is set to be worth $90.6bn by 2033, at a growth rate of 22.3% CAGR from 2023. 

Technological integration and automation

As artificial intelligence grows more advanced, it gradually has a bigger part to play in claims processing, and the insurance industry is poised to rapidly adopt such technology to streamline operations and improve customer experience. A recent report shows that AI has the potential to cut claim resolution costs by up to 75% and increase the speed of the claim cycle by 5-10 times. The intelligence of its process automation enhances the accuracy and efficiency of the entire claim process. 

Customer-centric models 

In response to modern consumers’ desire for services that are both personalized and convenient, the insurance industry is increasingly adopting customer-centric models. As a result, 85% of insurers are actively developing new customer experience initiatives to enhance customer journeys. Utilizing specific customer data means that insurers can tailor their policies to be more accessible and better aligned with individual customer needs. 

Regulatory compliance and sustainability

Over 50% of insurers are planning to boost their investment in regulatory technology by 2026, with a spend expected to exceed $204 billion as regulatory compliance remains a top priority. The insurance industry is also making strides towards more responsible and sustainable practices, as it expects to see a rise in Environment, Social and Governance (ESG) compliant investment products. 

The rise of insurtech

The global insurtech market, valued at USD 8.8 billion in 2021, is predicted to reach a market size of USD 166.4 billion by 2030, growing at a CAGR of 39.1% from 2022 to 2030. Insurtech startups are transforming traditional insurance models with their innovative approaches to long-standing challenges, and this significant growth in investment highlights the market’s increasing demand for digital-first insurance solutions and platforms that focus on improving customer engagement. 

Health and life insurance expansion

Health and lifestyle insurance has faced a renewed sense of interest following the pandemic - a sector that is now expected to grow by over 10% annually. This shows that there’s an increased awareness of health concerns and the importance of financial security. Tailored health and wellness insurance plans are also gaining popularity, demonstrating a shift toward preventive care models. 

The insurance industry is at the precipice of significant transformation. Insurance businesses that embrace technological innovation, prioritize customer satisfaction, adhere to regulatory changes, and invest in sustainable practices will be well-positioned to thrive in 2024 - and beyond. With investment, dedication, and innovation, insurers can turn these opportunities into profit.