Insurance Analytics Market

Insurance Analytics Market Outlook - 2027

The global insurance analytics market size was valued at $7.91 billion in 2019, and is projected to reach $ 22.45 billion by 2027, growing at a CAGR of 14.2% from 2020 to 2027. 

In the wake of COVID-19 global health crisis, the insurance analytics market is largely impacted, as insurers are heavily relying on the analytical tools for business optimization and developing existing business model to insure better services to the policyholders. In addition, with the help of analytical tools, insurers are able to predict risk factors, executing claims management strategies, forecasting sales, among others, which therefore boosting the market growth during the pandemic situation.

Insurance analytics is widely used for controlling risk in underwriting, pricing, rating, claims, marketing, and reserving in the insurance sector. In addition, this analytic solution helps insurance companies to manage risks & offer better insurance contracts in fields such as health, life, and property or casualty. Furthermore, the key role of this insurance analytics is to reduce costs, optimize customer relationship processes and use predictive analytics in insurance models to create reliable reports across several product lines. 

With growth in competition in the insurance sector, demand for analytics solutions is on the rise to sustain in stiff competition across the global market. In addition, surge in requirement & implementation of advance technologies to provide integrated & value-added services to customers and reduce operational cost, therefore, propels the insurance analytics market growth.

However, stringent government regulations and security & data privacy concerns are some of the factors that limit the market growth. Furthermore, developing economies offer significant opportunities for insurance analytics solution providers to expand & develop their offerings, especially among emerging economies such as Australia, China, India, Singapore, and South Korea. In addition, increase in fraudulent activities are expected to boost demand for insurance analytics solutions in the upcoming years.

The service segment is projected to maintain its dominance during insurance analytics market forecast period. This is attributed to the fact that insurance analytics covers wide range of services such as claims analytics services, subrogation analytics, and fraud & customer analytics services. In addition, these services help insurance agents can identify actual perils covered in insurance, promotes cross-selling & upselling, which leads to more sales. 

The report focuses on growth prospects, restraints, and trends of the insurance analytics market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers on the insurance analytics market.

Segment Review

The insurance analytics market is segmented on the basis of component, deployment type, enterprise size, application, end user, and region. On the basis of component, the market is bifurcated into solution and service. In terms of deployment type, it is divided into on-premises and cloud. On the basis of enterprise size, it is segmented into large enterprises and small & medium enterprises (SMEs).

By application, it is segmented into claims management, risk management, customer management, sales & marketing, and others. Based on end user, the market is segmented into insurance companies, government agencies, and third-party administrators, brokers & consultancies. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Competitive Analysis 

The report analyses the profiles of key players operating in the market include Applied Systems, IBM Corp., Microsoft, Open Text Corporation, Oracle, Pegasystems Inc., salesforce.com inc., SAP SE, SAS Institute Inc., and Vertafore, Inc. These players have adopted various strategies to increase their market penetration and strengthen their position in the insurance analytics industry.

COVID-19 Impact Analysis

COVID-19 pandemic has a significant impact on the insurance analytics market, owing to increase in use and adoption of advance technologies to provide digitalized services globally. Moreover, for Property and Casualty (P&C) & life insurance industries, it has become a challenge to be prepared for excess morbidity & mortality during the pandemic situation. Therefore, with understanding the potential impacts & need for advance analytical solutions, insurers have largely adopted & implemented insurance analytics solutions globally. This, in turn, has become one of the major growth factors for the insurance analytics market during the global health crisis. 

Top Impacting Factors

Increase in Adoption of Advance Technologies

Insurance industry has become a fastest adopter of technologies such as cloud computing, application programming interfaces (APIs), data analytics, artificial intelligence, robotic process automation (RPA), chatbots, and machine learning. In addition, firms operating in this industry are inclined toward integrated customization services, which has increased adoption of insurance analytics solutions across the globe. 

Moreover, significant requirement & implementation of advance technologies and providing integrated & value-added services to customers promoting adoption of technologies. Therefore, increased implementation of technologies to reduce operational cost and provide convenience & efficiency services drive the insurance analytics market growth.

Stringent Government Regulations 

Various laws set different standards & regulations across different jurisdictions with an increased unified approach taken by financial centers toward regulation. Regulators continue to refine existing regulations & imposes stringent regulatory actions with a higher level of accountability & enforcement, which hinders the insurance analytics market growth. In addition, with focus on data privacy & increases in pandemic-related digital customer engagement, governments tend to execute regulations & insurers to increase focus on data governance significantly. This, as a result is the major factor that hampers the market growth. 

Surge in Fraudulent Activities 

Padding, inflating claims, staging accidents, misrepresenting facts on an insurance application, submitting claims for injuries or damage that never occurred are some of the major frauds occur in the insurance sector. In addition, frauds such as internal fraud, rate evasion, underwriting fraud, claims fraud, and cybersecurity fraud are committed at different points in transaction by applicants, policyholders, third-party claimants, and professionals providing services to claimants. 

Therefore, with rapid growth in fraudulent activities, companies providing insurance solutions are expected to adopt insurance analytics solutions in upcoming years. For instance, in 2018, the Coalition Against Insurance Fraud, in partnership with SAS Institute Inc. projected that about 10% of property-casualty insurance losses & loss adjustment expenses by $34 billion a year. This, as a result is expected to boost demand for insurance analytics in the market.

Key Benefits For Stakeholders 

• The study provides in-depth global insurance analytics market analysis along with current & future trends to illustrate imminent investment pockets.
• Information about key drivers, restrains, and opportunities and their impact analysis on the market size are provided in the report.
• Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the insurance analytics industry.
• An extensive analysis of the key segments of the industry helps to understand the global insurance analytics market trends.
• The quantitative analysis of the global insurance analytics market share from 2020 to 2027 is provided to determine the market potential.

 Insurance Analytics Market Report Highlights