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Insurance Analytics Market Size, Share & COVID-19 Impact Analysis, By Deployment (Cloud and On-premise), By Enterprise Type (Large Enterprises and Small and Medium Enterprises (SMEs)), By Application (Claims Process Optimization, Fraud Detection & Risk Assessment, Customer Engagement & Retention, and Others), By End-user (Insurance Firms, Government Agencies, and Others), and Regional Forecast, 2023 – 2030

Region : Global | Format: PDF | Report ID: FBI108489

 

KEY MARKET INSIGHTS

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The global insurance analytics market size was valued at USD 11.11 billion in 2022. The market is projected to grow from USD 12.65 billion in 2023 to USD 35.00 billion by 2030, exhibiting a CAGR of 15.6% during the forecast period.


Insurance analytics uses advanced data analysis and modeling techniques within the insurance industry to extract valuable insights from vast amount of data. It encompasses collecting, processing, and interpreting data related to policyholders, claims, risk management, and other insurance-related processes. The primary objectives in adopting insurance analytics are to enhance decision-making, improve operational efficiency, manage risks effectively, and develop a deeper understanding of customer behavior.


Additionally, by leveraging the techniques, such as predictive modeling, machine learning, and artificial intelligence, insurance companies can take data-driven decisions, optimize pricing models, automate underwriting processes, detect fraudulent claims, and tailor insurance products to better meet the needs of policyholders.


COVID-19 IMPACT


Increased Awareness of Benefits of Insurance Analytics Technology During Pandemic Drove Market Growth


The COVID-19 pandemic had a profound impact on the market. Insurers relied on data-driven insights, which surged the demand for analytics solutions within the insurance industry. The technology became influential in helping insurers assess the unique risks brought by the pandemic and develop predictive models for effective risk management. Additionally, the pandemic triggered a surge in insurance claims, and analytics played a crucial role in streamlining claim management and processing to handle the increased workload efficiently. Insurers also shifted to analytics to adapt pricing and underwriting strategies in response to the changing customer behaviors and evolving risk landscapes. It accelerated the adoption of cloud-based analytics platforms to support remote work, highlighting the importance of analytics in the insurance sector’s response to the crisis. For instance,



  • In March 2021, the partnership between IBM and Rolls-Royce continues to advance significant outcomes for the Emergent Alliance. The team emphasizes developing analytics solutions to help policymakers better understand the data in shaping strategies in response to COVID-19.


Overall, insurance analytics proved to be an essential tool for insurers in navigating the challenges posed by COVID-19, fostering innovation, and enhancing industry resilience.


LATEST TRENDS


Increasing Implementation of Artificial Intelligence (AI) and Machine Learning (ML) with Insurance Analytics Tools to Surge the Demand for Solutions


The increasing adoption of Artificial Intelligence (AI) and Machine Learning (ML) in analytics is reshaping the insurance industry. Insurers are harnessing the power of these technologies to gain deeper insights from their data, streamline operations, and enhance customer experiences. AI and ML algorithms are used for more accurate risk assessment, enabling insurers to develop personalized insurance products and pricing models. For instance,



  • In June 2022, SAS, a provider of AI and analytics, acquired Kamakura Corporation, which offers specialized software, data, and consulting services, enabling financial organizations, including banks, insurance companies, asset managers, and pension funds, to manage various financial risks effectively.


Claims processing is becoming faster and more efficient through automation, reducing administrative overhead. Moreover, these technologies are pivotal in fraud detection and swiftly identify irregularities in claims data. Customer service is revolutionizing with AI-driven chatbots providing immediate assistance and improving overall customer satisfaction. Underwriting processes are becoming more agile with predictive analytics, enabling insurers to proactively address customer needs.


Hence, the factors mentioned above are modifying the fundamental changes in the insurance industry, making it more data-centric, customer-focused, and efficient.


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DRIVING FACTORS


Surge in Demand for Data-driven Decision-making to Fuel Market Growth 


The increasing need for data-driven decision-making in the insurance industry is a crucial market driver. Insurers are realizing the value of immense data in assessing risks, optimizing underwriting processes, detecting fraud, and enhancing customer experiences. The vast amount of data generated through policyholders, Internet of Things (IoT) devices, and external sources provide an opportunity to gain deeper insights into customer behavior and risk factors. Thus, insurance companies are investing in advanced analytics tools and platforms to harness this data effectively. For instance,



  • According to industry experts, 90% of insurance professionals and enterprise analytics highlight the role of insurance analytics in driving their organizations’ digital transformation efforts.


Additionally, regulatory requirements and the need for accurate reporting encourage insurance firms to adopt analytics solutions for compliance.


Therefore, the rise in demand for data-driven and evidence-based decision-making is a major factor fueling the insurance analytics market growth.


RESTRAINING FACTORS


Lack of Resources and Limited Capabilities to Hamper Market Growth


The insurance industry generates massive amount of data, including customer information, claims data, market trends, and others. Managing, processing, and extracting valuable insights from this data can be complex, especially for insurance companies with limited data analytics capabilities. In addition, insurance companies deal with sensitive customer information and strict data protection laws, such as GDPR, which demand rigorous adherence. Ensuring analytics processes aligned with these regulations while delivering meaningful insights requires substantial effort and resources. Thus, a lack of resources and substantial effort is expected to restrain market growth.


SEGMENTATION


By Deployment Analysis


Benefits Offered by Cloud-based Solution to Fuel the Segment Growth


Our research shows that the deployment is implemented on the cloud and on-premise. Cloud deployment dominated the market and is expected to grow at the highest CAGR throughout the projected period as it offers scalability, allowing insurers to expand their analytics capabilities as required without large upfront requirements in infrastructure. Additionally, cloud-based solutions provide real-time data processing and analysis, and are crucial for making timely decisions in the fast-paced insurance industry.


The on-premise deployment is expected to grow at an average rate as it provides control, security, and customization but may involve higher upfront costs and maintenance responsibilities. The choice between on-premise and cloud-based depends on an organization’s specific needs, resources, and regulatory requirements.


By Enterprise Type Analysis


Large Enterprise to Dominate Market Due to Ability of Analytics to Handle the Increasing Amount of Data Generated


According to our research, the solutions are used by large enterprises and small & medium enterprises. Large enterprises segment is expected to dominate the market as they handle vast amount of data, and analytics help them make sense of this information to improve risk assessment and underwriting accuracy. Also, analytics enable large enterprises to identify trends and patterns in claims data, helping them detect fraud more effectively, fueling the segment’s growth.


On the other hand, small and medium enterprises segment is projected to grow at the highest rate in the adoption of analytics in the insurance sector as they increasingly recognize the value of data-driven insights to make informed decisions, manage risks, and optimize their insurance reporting. Furthermore, technological advancements have made insurance analytics solutions more accessible and affordable for smaller businesses.


By Application Analysis


Growing Insurance Analytics Use for Minimizing Fraudulent Activities to Surge Claims Process Optimization Segment Growth


As per our study, the market has specific applications, including claims process optimization, fraud detection & risk assessment, customer engagement & retention, and others. The claims process optimization segment holds the highest market share, as it is designed to streamline and enhance the entire claims process, leading to cost savings by automating routine tasks and reducing fraudulent claims. Moreover, it significantly improves customer satisfaction by expediting the claims settlement process, which leads to increased policy renewals.


Customer engagement & retention segment is projected to grow at the highest rate as insurance companies increasingly recognize the critical role of customer-centric strategies in the competitive landscape. By utilizing analytics to better understand customer behavior, preferences, and needs, insurers can tailor their offerings, communications, and services to create a more personalized and engaging experience. Additionally, these tools enable insurance providers to proactively identify potential issues that could lead to customer churn. By detecting signals of dissatisfaction, insurers can intervene with timely and relevant offerings, improving customer satisfaction and retention rates.


By End-user Analysis


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Increasing Analytics Use for Risk Management and Customer Satisfaction to Drive Insurance Firms Segment Growth 


As per our study, the market has specific end-users, including insurance firms, government agencies, and others. The insurance firms segment holds the highest market share during the forecast period. The insurance firms segment is expected to grow rapidly as insurance companies heavily rely on data to make informed decisions regarding risk assessment, pricing, claims processing, and customer service. These tools empower insurers to extract valuable insights from their vast data repositories, enabling more accurate underwriting and enhanced risk management, improving profitability through optimized pricing, and reducing fraud.


Government agencies hold the second largest share as they are increasingly adopting insurance analytics for enhancing their operations, saving costs, and providing better services to the public.


REGIONAL INSIGHTS


North America Insurance Analytics Market Size, 2022 (USD Billion)

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As per our report, the market is studied across five regions, including North America, South America, Europe, the Middle East & Africa, and Asia Pacific. These regions are further categorized into leading countries.


North America holds the highest market share as insurers harness analytical tools to proactively assess potential risks and enhance policyholder security. These advanced tools are required for extensive data research and meticulous processing to yield precise decision-making insights which is driving the expansion in the region. Moreover, substantial technological advancements and investments in cutting-edge analytics within the insurance sector contribute significantly to the insurance analytics market share. For instance,



  • In May 2023, SAS, an analytics solutions provider, planned to invest USD 1 billion in three years to develop enhanced analytics solutions for industries' specific requirements. Further, SAS will build its focus on offering tailored solutions to industry challenges in banking, insurance, government, retail, healthcare, manufacturing, telecom/media, and others.


Asia Pacific is the fastest-growing region, with governments actively endorsing and boosting the insurance sector through advanced analytical tools, ultimately enhancing their business revenue. The region is set for accelerated growth due to its swift adoption of insurance technology. Additionally, robust economic expansion, rapid digitalization, and widespread adoption of cloud-based services provide significant growth opportunities for the market in the region.


Europe is gaining prominence due to continuous technological advancements within the insurance sector. Insurance firms, government agencies, party administrators, brokers, and consultancies are increasingly adopting insurance analytics technology for managing risks. This trend is further fueled by European insurance companies using analytical tools to mitigate regulatory risks and reduce claim processing costs, contributing to the region’s industrial growth.


South America and the Middle East & Africa are expected to grow slowly as insurance analytics in these regions is still developing, with countries starting to recognize the importance of utilizing analytics in the insurance industry.


KEY INDUSTRY PLAYERS


Key Players Launch New Products to Strengthen Their Market Position


The key players in this market are actively creating advanced solutions to cater to customer demands and also focus on enhancing their existing product portfolio to deliver flexible solutions. Furthermore, these organizations proactively pursue collaboration, acquisitions, and partnerships to bolster their product offerings.


List of Key Companies Profiled:



KEY INDUSTRY DEVELOPMENTS:



  • June 2023: iPipeline and Vertafore joined forces to simplify life insurance distribution for insurance carriers and independent agents. This partnership aims to streamline and improve the process of offering life insurance policies, making it more efficient and accessible for all parties involved.

  • June 2023: Verisk unveiled an advanced insurance fraud analytics solution in collaboration with Kyndryl Technology in Israel. This innovation solution combines Kyndryl’s robust cloud computing capabilities with Veriks’s extensive domain knowledge to rapidly access fresh automobile insurance claims involving bodily injury, a mandatory insurance component in Israel. Its primary goal is to identify potential fraud indicators.

  • April 2023: Guidewire introduced the Garmisch solution, offering self-service tools through the Guidewire Cloud Console for developers, enabling insurance companies to swiftly establish digital claims processes. Garmisch includes ready-to-use connectors for major global data platforms, speeding up organizations’ access to insights.

  • April 2023: Verisk introduced an innovative Rating-as-a-Service (RaaS) solution that transforms insurance product innovation. This cloud-based rating engine eliminates the need for insurers to invest significant time collecting and updating ratings. Instead, insurers provide relevant rating inputs to Verik through API. This approach streamlines and modernizes the rating process, enhancing efficiency for insurers.

  • March 2023: LexisNexis Risk Solutions upgraded its AI-driven home insurance solution to enhance and accelerate the underwriting process for home insurance. Their goal is to leverage data and advanced analytics to offer valuable insights that assist businesses and governmental organizations in mitigating risks and make better decisions, ultimately benefiting individuals.


REPORT COVERAGE


An Infographic Representation of Insurance Analytics Market

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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product/service types, and leading applications of the product. Besides, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that contributed to the growth of the market in recent years.


Report Scope & Segmentation














































ATTRIBUTE



DETAILS



Study Period



2019-2030



Base Year



2022



Estimated Year



2023



Forecast Period



2023-2030



Historical Period



2019-2021



Growth Rate



CAGR of 15.6% from 2023 to 2030



Unit



Value (USD Billion)



Segmentation



By Deployment, Enterprise Type, Application, End-user, and Region



 


 


 


 


 


 


 


 


 


Segmentation



By Deployment



  • Cloud

  • On-premise


By Enterprise Type



  • Large Enterprises

  • Small and Medium Enterprises (SMEs)


By Application



  • Claims Process Optimization

  • Fraud Detection & Risk Assessment

  • Customer Engagement & Retention

  • Others (Data Visualization and others)


By End-user



  • Insurance Firms

  • Government Agencies

  • Others (Third-party Administrators, Brokers, and Consultants)


By Region



  • North America (By Deployment, By Enterprise Type, By Application, By End-user, and By Country)


    • U.S. (By End-user)

    • Canada (By End-user)

    • Mexico (By End-user)


  • South America (By Deployment, By Enterprise Type, By Application, By End-user, and By Country)


    • Brazil (By End-user)

    • Argentina (By End-user)

    • Rest of South America


  • Europe (By Deployment, By Enterprise Type, By Application, By End-user, and By Country)


    • U.K. (By End-user)

    • Germany (By End-user)

    • France (By End-user)

    • Italy (By End-user)

    • Spain (By End-user)

    • Russia (By End-user)

    • Benelux (By End-user)

    • Nordics (By End-user)

    • Rest of Europe


  • The Middle East & Africa (By Deployment, By Enterprise Type, By Application, By End-user, and By Country)


    • Turkey (By End-user)

    • Israel (By End-user)

    • GCC (By End-user)

    • North Africa (By End-user)

    • South Africa (By End-user)

    • Rest of Middle East & Africa


  • Asia Pacific (By Deployment, By Enterprise Type, By Application, By End-user, and By Country)


    • China (By End-user)

    • Japan (By End-user)

    • India (By End-user)

    • South Korea (By End-user)

    • ASEAN (By End-user)

    • Oceania (By End-user)

    • Rest of Asia Pacific




Frequently Asked Questions

The market is projected to reach USD 35.00 billion by 2030.

In 2022, the market was valued at USD 11.11 billion.

The market is projected to grow at a CAGR of 15.6% during the forecast period.

The large enterprises are expected to lead the market.

The surge in demand for data-driven decision-making fuels market growth.

IBM Corporation, Tableau Software, LLC, Wipro, LexisNexis Risk Solutions, Vertafore, Inc., SAS Institute Inc., Verisk Analytics, Inc., ExlService Holdings, Inc., Altair Engineering Inc., and Moody's Analytics, Inc. are the top players in the market.

North America is expected to hold the highest market share.

By end-user, the insurance firms is expected to grow with a remarkable CAGR during the forecast period.

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