A new study by Juniper Research has found that the total value of premiums generated by insurtech firms will exceed $556 billion in 2025, a 123% leap from the $250 billion seen in 2020.
Juniper Research’s analysis also predicts that insurers in the motor, life, home and health industries risk becoming less attractive to potential customers if they fail to capitalise on the benefits that AI underwriting systems bring.
The report concluded that weakened customer loyalty, the driving down of premiums by increased competition, and the shift to digital will cause significant change in insurance over the next five years.
Large insurers are urged to focus on using insurtech solutions to create data-driven models in an effort to improve customer interactions.
Furthermore, Juniper Research ranked 20 of the largest traditional insurance providers on insurtech innovation, investment and adoption, with Ping Am, AXA and Munich Re leading the pack.
Insurtech is anticipated to affect health insurance strongly, with the value of premiums underwritten by insurtech growing by over 1,000% between 2020 and 2025.
The ability to collect and use customer data through wearables, API calls to electronic health records and digital therapeutics are all seen as critical in driving digital transformation.