The total value of premiums generated by InsurTech platforms is expected to surpass $556bn by 2025, up from $250bn in 2020, study by Juniper Research found.
Furthermore, InsurTech is predicted to represent 8% of global insurance premiums by 2025.
Insurers in sectors such as motor, life, home and health will risk attracting fewer potential customers if they fail to capitalise on AI underwriting systems, the report said.
The key reasons driving changes in the insurance industry over the next five years will be the shift to digital and the driving down of premiums by increased competition.
As a result, to remain relevant and improve customer interactions, large insurers must focus on using InsurTech solutions by creating data-driven models, or risk losing market share to newer, digitally-native vendors.
InsurTech solutions will predominantly affect health insurance, with the value of premiums underwritten by InsurTech growing by over 1,000% between 2020 and 2025, therefore exceeding $95bn by 2025, the report said.
The ability to use customer data through wearables, API calls to electronic health records and digital therapeutics will be critical to driving digital transformation.
The research also ranked 20 of the largest traditional insurance providers on InsurTech investment and adoption with the top five being Ping An which plans to invest $1bn per year in InsurTech, Axa, Munich Re, Humana and Allianz.
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