The Digital Insurance Platform Market is expected to register a CAGR of over 12.5% during the forecast period (2021-2026). The global insurance industry has been witnessing a significant shift towards the adoption of digital technologies. With COVID-19 impacting every facet of personal life and business, digitization has become a new source for the world to adjust to the new normal. This is especially apparent in insurance, where insurers can tap on digital channels for distribution and create awareness.
- With the outbreak of Coronavirus, insurers are coming up with new COVID-specific products to help customers have a health cover specifically for Coronavirus. For instance, for motor, a few insurance companies have come up with a concept of pay as you drive insurance products. Even though most operations are done remotely, digital transformation to provide instant customer support is on high priority, where AI-based text and voice bots are becoming a part of trends.
- According to a recent Willis Towers Watson report, 74% of insurance executives, identify reluctance within the industry to adopt new digital technologies. Customer loyalty and satisfaction have become a primary concern for insurance companies. Artificial intelligence (AI) and its related technologies are expected to significantly impact all aspects of the insurance value chain, from distribution to underwriting and pricing to claims management.
- This may result in policies being priced, purchased, and bound in near real-time. Through these, insurers have been able to smartly connect information and quickly deliver innovative products and services, which in the end, will significantly improve customer loyalty and satisfaction.
- For example, New York-based insurance startup Lemonade is using AI and a robust digital platform to improve processes and applying behavioral economics to reduce fraud. At the same time, it offers a unique claims experience to its customers. Specifically, Lemonade organizes peer groups supporting charitable causes, charges upfront fees, and gives back unused premiums at the end of the year to charities personally selected by each peer group.
- Insurers have increased their communication with customers - and shown a commendable degree of proactive customer-driven support. There have been examples in numerous countries of insurers offering rebates on motor insurance given decreased levels of driving.
- In Australia, as well as some other countries, private health insurers have been offering premium holidays and other benefits given that customers can't draw on their products, which cover them for elective surgery and ancillary services like dental care. Meanwhile, in the UK, some insurers have offered free motor cover and enhanced home cover for National Health Service (NHS) workers and extended business cover to provide coverage for employees working from home.
Key Market Trends
Cloud to Witness Highest Growth
- Cloud computing has been experiencing tremendous growth recently and is increasingly being adopted by insurers. Looking at its immense potential, insurers consider building a strategy around cloud technology to keep competitors at bay.
- Cloud-based insurance solutions can offer better social listening and higher conversion rates from opportunity to sale through targeted campaign management and improved opportunity and lead engagement models. This could result in higher upsell, cross-sell, and retention rates. Cloud can also enhance the claims experience by providing better service and better communication with end customers. This ability of the cloud is augmenting the growth of the cloud-based digital insurance platform market.
- Further, to take advantage of the benefits of the cloud-based platform, many insurers are introducing cloud-based solutions, while a few of them are updating features in the existing cloud-based digital insurance platforms.
- For instance, In June 2020, Sapiens International Corporation, a provider of software solutions for the insurance industry, announced upgraadation of the general availability of its Sapiens DigitalSuite for property & casualty (P&C) and life, pension & annuity providers worldwide. Sapiens DigitalSuite v3.1, a cloud-based, low-code, dynamic digital insurance platform, now features advanced portal content for agents and consumers.
Asia-Pacific to Witness Highest Growth
- Asia-Pacific region is expected to witness the highest CAGR during the forecast period. The region is anticipated to be a money-spinning market for digital insurance platform providers during the forecast period, considering the untapped opportunities and the increasing commercial investment in different industry verticals in the region.
- The high population of the region and increasing investments in businesses is anticipated to cater to a significant number of premiums, which would drive multinational companies to emphasize exploring the APAC market by partnering with local companies, channel partners, and technology partners.
- By 2029, Asia-Pacific is estimated to account for 42% of global insurance premiums, with China's share forecasted to be 20%, according to Swiss Re. That country is on course to become the largest insurance market by the mid-2030s. According to a report by Bain & Company, consumers in Asia-Pacific's developing markets are significantly underinsured, with one measure of insurance penetration, gross written premiums as a percentage of per-capita GDP, signaling a significant amount of unmet demand in Asia Pacific's developing markets where penetration is less than 5% in India, mainland China, Indonesia, and Malaysia.
- The insurance distribution landscape is gradually evolving. In developing countries in the Asia Pacific region, such as India, Malaysia, China, and Indonesia, digital channels are becoming more prominent. In many Asia-Pacific jurisdictions, consumers are open to having insurers provide ecosystem services. These digital insurance ecosystems are interconnected players forming sets of products and services that allow users to fulfill a variety of needs in one integrated experience. This is expected to augment the demand for a digital insurance platform.
- Moreover, the growing adoption of the cloud and mobile technologies by large diversified populations and the rapid rise in the number of InsureTech companies has led to the timely implementation of digital insurance platforms in the APAC countries, such as Japan, China, and Australia.
The digital insurance platform market comprises several global and regional players, vying for attention in a fairly-contested market space. Although the market studied poses moderately high entry barriers for new players, several new entrants have been able to gain traction in the market. The market is also witnessing increased competition among the players. The players focus on engaging themselves in several partnerships, mergers, acquisitions, and product innovations to gain a competitive advantage.
- May 2020 - eBaoTech Corporation announced the availability of eBaoCloud InsureMO in the Microsoft Azure Marketplace, an online store that provides applications and services for Azure.
- The market estimate (ME) sheet in Excel format
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1.2 Scope of the Study
4.2 Market Drivers
4.2.1 Increasing Shift of Insurance Companies From Product Based to Customer-centric Strategies
4.2.2 Increased Awareness Among Insurers About Digital Channels
4.3 Market Restraints
4.3.1 Difficulty Regarding Integration of Insurance Platform with Legacy Systems
4.4 Porters Five Force Analysis
4.4.1 Threat of New Entrants
4.4.2 Bargaining Power of Buyers/Consumers
4.4.3 Bargaining Power of Suppliers
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
4.5 Assessment of COVID-19 impact on the industry
5.2 Organization Size
5.2.1 Large Enterprises
5.2.2 Small and Medium Enterprises
5.3.1 Automotive and Transportation
5.3.2 Home and Commercial Buildings
5.3.3 Life and Health
5.3.4 Business and Enterprise
5.3.5 Consumer Electronics and Industrial Machines
5.4.1 North America
220.127.116.11 United States
18.104.22.168 United Kingdom
22.214.171.124 Rest of Europe
5.4.3 Asia Pacific
126.96.36.199 Rest of Asia- Pacific
5.4.4 Latin America
5.4.5 Middle East and Africa
6.1.1 IBM Corporation
6.1.2 Microsoft Corporation
6.1.3 Oracle Corporation
6.1.4 Pegasystems Inc.
6.1.5 Appian Corporation
6.1.6 Mindtree Ltd
6.1.7 DXC Technology Company
6.1.8 Prima Solutions SA
6.1.10 EIS Software Limited
A selection of companies mentioned in this report includes:
- IBM Corporation
- Microsoft Corporation
- Oracle Corporation
- Pegasystems Inc.
- Appian Corporation
- Mindtree Ltd
- DXC Technology Company
- Prima Solutions SA
- EIS Software Limited