Insurtech Trends in 2024: Emerging Technologies That Transforming Insurance

In the insurance sector, as elsewhere in finance, adaptability to cutting-edge technologies is crucial for competitiveness. Insurtech, the synergy of insurance and technologies, fundamentally changes how insurers operate and interact with customers. 

The global insurtech market is estimated to expand rapidly, with a compound annual growth rate of 52.7% from 2023 to 2030. Such dynamics give reason to expect the creation of a technological basis for implementing the most breakthrough ideas in the insurance field, which just yesterday seemed unachievable.

This article explores the latest insurtech trends you should consider when doing business in the insurance industry.

Insurtech Digital Ecosystem

Nowadays, insurtech is a dynamic environment that generates and supports new methods of solving the classic issues that insurers face. 

The digital ecosystem for insurance heavily leverages Artificial intelligence (AI), the Internet of Things (IoT), blockchain, and cloud technologies. The combination of innovations in these areas is the basis of insurance technology trends 2024. 

Let’s consider the main drivers of Insurtech.

AI as a Game-changer in Insurance Technologies

Today’s achievements in various fields of AI significantly expand the capabilities of insurance technologies, primarily regarding big data processing. 

Predictive Analytics

This form of business analytics allows insurers to find patterns in the data, predict risks, and identify opportunities.

Using AI techniques, primarily machine learning (ML), predictive analytics provides a rationale for decisions in various areas of insurance activity, including risk assessment, fraud detection, and forecasting trends and indicators. 

Particularly valuable is that such analytics capture the relationships between many factors and help predict outcomes under different scenarios and sets of conditions.

Generative AI

Generative AI (GenAI) is a subset of artificial intelligence that involves algorithms that can generate new content, ideas, or solutions by learning from existing data. 

Using large datasets, GenAI can simulate various scenarios and outcomes, helping insurers improve customer service and operational efficiency. In 2023, the insurance industry was ranked second, after banking, in the global list of sectors where the impact of generative AI was felt the most.

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Blockchain in Insurance Technologies

Blockchain technology has recently attracted much attention and is relevant to the latest insurtech trends. Blockchain’s decentralized and transparent nature can help reduce fraud and streamline insurance processes, and therefore, it has potential for applications in Insurtech.

For example, self-executing smart contracts with the terms of the agreement written directly into code can help prevent ambiguous interpretations of insurance terms and automate claims processing.

Peer-to-peer (P2P) insurance, an insurance model that allows groups of people to pool their resources and insure each other without excessive administration, is based on blockchain technology.

Cloud Adoption for Operational Efficiency

Cloud computing provides scalable, agile, cost-effective data storage, processing, and management solutions. With cloud solutions, businesses, including those in the insurance sector, deploy new services rapidly and enhance their data management capabilities. 

Insurers can respond more flexibly to market and technology changes using cloud platforms.

Benefits of cloud computing for Insurance:

• Improved data security and disaster recovery
• Easy integration of new technologies
• Support for extensive data needs for analytics and AI
• Scalability and agility for rapid deployment of new services
• Cost-effectiveness in data management and storage

IoT Opportunities for Insurance Technologies

With IoT devices, insurers can obtain helpful information about the features and risk factors of their customers’ and insured properties. Such smart devices supply real-time data, which is valuable for increasing the accuracy of risk assessments and preparing insurance offerings.

Among the use cases of IoT in insurance:

• Wearables
• Telematics systems and built-in sensors in vehicles
• Various sensors and smart home devices in insured objects
• IoT drones (Unmanned Aerial Vehicles, UAVs)

5 Key Insurance Technology Trends 2024

Let’s briefly discuss insurtech trends from the perspective of insurance industry needs and best practices.

New Level Risk Management with Predictive Analytics

Predictive analytics is transforming underwriting, claims processing, and customer service. This technology enables insurers to make more informed decisions, streamline operations, and enhance customer experiences.

Accurate Risk Prediction and Automated Underwriting

Predictive analytics allows for accurate risk prediction and automated underwriting. Insurers can analyze historical data and identify patterns to assess risk levels more precisely. 

Some leading insurers digitally gather over 1,500 data points per customer for algorithmic analysis. The combination of insurance and technology helps mitigate the insurer’s risk.

Proactive Risk Management Through Advanced Analytics

Advanced analytics empower insurers to engage in proactive risk management. By leveraging predictive models, insurers can identify potential risks before they occur. This proactive approach helps mitigate losses and improve overall risk management strategies.

Maintaining Customer Trust and Regulatory Compliance

Applying predictive analytics is also crucial to maintaining customer trust and regulatory compliance. Insurers can build stronger customer relationships by providing accurate risk assessments and transparent decision-making processes. 

Additionally, predictive analytics helps insurers comply with regulatory requirements, ensuring data security and privacy.

Accelerating Digital Transformation

Insurtech has accumulated a critical mass of technological solutions that allow the digital transformation of insurance companies to be carried out quickly and smoothly.

After learning how to do it quickly, insurance professionals can use helpful automated tools directly on portable devices. At the same time, insurance technology trends 2024 are also manifested in the fact that more and more routine operations do not require human intervention.

Low-Code/No-Code Platforms 

Low-Code/No-Code platforms enable rapid application development, accelerating the digital transformation process within the insurance industry.

Benefits of Low-Code/No-Code Platforms in Insurance:

• Reduced development time, lower costs, and increased agility in responding to market changes.
• Accelerating digital transformation by enabling non-technical staff to develop applications.
• Quicker deployment of new digital products and services.
• Enhanced flexibility in operations and reduced reliance on technical resources.

For example, Sapiens International Corporation, a global provider of the insurtech sector, launched its new Parameter Management (PaM) solution. It aims to empower the financial sphere to become digital, innovative, and agile by providing an insurance platform with pre-integrated low-code solutions and a cloud-centric approach.

Generative AI for Enhanced Operations

Generative AI is increasingly adopted in insurance technologies to streamline operations and improve customer experiences. Insurers use GenAI to generate personalized policy documents, automated reports, and tailored promotion materials. Additionally, generative AI can help create possible scenarios for risk assessment and training, assisting insurers in better understanding and mitigating potential risks.

Insurance companies leverage generative AI to enhance customer interactions through advanced chatbots and 24/7 customer assistance. Insurers integrate AI-driven chatbots into their systems to provide immediate answers to customer requests anytime.

Advanced Automation Capabilities

In the insurance industry, advanced automation capabilities allow insurers to facilitate processes, cut costs, and increase customer satisfaction. These solutions enhance engagement and simplify workflows, reducing the burden on staff. 

In particular, I am talking about the following automation areas:

Robotic Process Automation (RPA): Institutions are employing RPA to automate repetitive tasks, streamline back-office operations, reduce costs, and improve efficiency in claims processing, policy administration, and customer service.

Forward-thinking Solutions: Real-time data processing, mobile apps, and automated systems improve response times and operational efficiency.

A real-world example: Duck Creek Technologies, an intelligent solutions provider for the insurance industry, entered a definitive agreement to purchase Imburse Payments to offer cloud-native software-as-a-service (SaaS) payment solutions for the insurance sector

Data-Driven Personalized Customer Experience

With data-driven personalized customer experience, insurers tailor offers, pricing, and marketing strategies. Companies analyze customer patterns and preferences to deliver customized insurance products that better meet individual needs. This customer-centric approach, which corresponds to the spirit of insurtech trends, helps increase customer satisfaction and loyalty.

Additionally, AI-based virtual assistants and chatbots offer 24/7 support, contributing to improving the customer experience. These tools help address customer inquiries promptly and efficiently, further enhancing the overall service quality. 

Moreover, insurers are creating seamless omnichannel customer journeys that unify online and offline support, ensuring a consistent and cohesive experience across all touchpoints. This holistic approach to customer engagement helps build stronger relationships and drives long-term customer loyalty.

Here are examples of how insurance and tech companies apply data-driven personalized customer experience in their daily operations:

• Munich Re Automation Solutions launches Allfinanz Nova, a fully flexible cloud-based platform designed to digitize the customer experience. This platform transforms the customer journey by simplifying and expediting the application process.
• Goji Platform utilizes personal history to connect purchasers with the most suitable insurer at the best cost. This approach enables accurate and selective pricing, thereby reducing risk for underwriters.
• Friendsurance Social Insurance Solution groups individuals with the same coverage. Cashback rewards encourage the group to make fewer and smaller claims, reducing false claims and helping insurers manage risk effectively.

Another prime example of Insurtech’s power is related to chatbots. Lemonade, an insurance provider in the United States and Europe, interacts with customers exclusively online. 

In particular, this digital insurer conducts customer service and claims handling communications exclusively through chatbots. The growth of Lemonade’s revenues from 128 million dollars in 2021 to 430 million dollars in 2023 evidenced the success of such insurance technologies.

Usage-Based Insurance

Vehicle insurers were the first to introduce usage-based insurance (UBI), embodying the approaches known as pay as you drive (PAYD), pay how you drive (PHYD), and mile-based auto insurance. Currently, UBI is spreading across the entire insurance sector.

Insurtech has given a powerful boost to usage-based insurance by providing the technology solutions it needs. 

First, the ability to process and analyze Big Data makes it possible to understand the behavior of policyholders and monitor the situation regarding the insured property, even with a vast customer base. 

Secondly, the development of IoT and the spread of smart devices enabled insurers to obtain the necessary data about policyholders and insured property, including in real-time.

Now, UBI uses telematics and other data sources to set premiums based on actual usage, promoting safe behavior. In the practice of insurance, there are many relevant use cases, among which, in particular, there are:

• In the auto insurance sector, IoT-enabled telematics devices can track driving habits, including speed, braking patterns, and mileage. This data enables insurers to offer usage-based insurance (UBI) policies, where premiums are adjusted based on actual driving behavior. Policyholders can benefit from lower premiums by demonstrating safe driving habits.
• In health insurance, wearable devices can monitor fitness levels, sleep patterns, and other health metrics. This allows insurers to provide incentives for healthy lifestyles and more accurate health risk assessments. The integration of IoT in insurance enhances risk management accuracy and improves customer engagement and satisfaction by offering more personalized and dynamic insurance solutions.
• In property and casualty (P&C) insurance, companies are shifting from a loss coverage scenario to a preventative action scenario. Many insurers offer discounted rates for installing smart devices like water shut-off systems. With these devices in place, insurers can offer the same insurance products or coverage at a discount due to the lower risk profile.

Real-world apps with emerging technologies demonstrate insurtech capabilities in this field. 

For example, TrueMotion leverages smartphone sensor technology to evaluate drivers based on their behavior, enabling insurers to attract and retain the safest and most profitable drivers. 

In turn, StrongArm Tech aims to enhance the well-being of industrial workers. Data collected from sensors worn by workers allows for more precise pricing and the development of preventative solutions to reduce injuries.

Insurtech Collaborations as a Driving Force of the Insurance Industry

The insurance industry has never rushed headlong to introduce technical innovations. Companies in the insurance sector are characterized by a moderate approach, preferring to make gradual changes in insurance technologies at a leisurely pace. 

However, today, there are reasons to change the usual state of affairs. Customers benefiting from rapid digitization in various business areas bring similar expectations to the insurance sector. The speed of development and implementation of insurtech solutions has been brought to the forefront and has become a significant competitive advantage.

As insurance technology trends 2024 show, the key to quickly bringing insurtech products to market is a combination of insurance and software expertise.

Insurance and Tech Partnerships

Collaborations between traditional insurers and insurtech companies foster innovation, provide essential agility, expand distribution channels, and reach new customer segments. Outsourced insurtech experts can immediately start realizing your product vision and offer experience-tested recommendations for using ready-made, PaaS (Platform as a Service), and IaaS (Infrastructure as a Service) solutions.

Here are examples of partnerships between insurers and insurtech startups that look promising, embodying technology trends in the insurance industry:

AI-Powered Solutions: Ablera has partnered with IBM and ALSO to enhance ABACUS, which will redefine insurance pricing and rating

Digital Insurance Sales Platform: Novum-RGI expands partnership with UNIQA to launch Digital Sales Platform

Digital Insurance Business Model: Allianz Direct and CHECK24 have launched a strategic partnership to build a digital business model focused on price-sensitive customers.

Collaborations with other industries, like banking and automotive, also help to provide bundled services and access to new customer categories.

Such collaborations generally aim to jointly implement comprehensive digital solutions that align with insurance tech trends. For example, Insurely entered a strategic partnership with leading Nordic bank SEB. 

According to research, 57% of surveyed global insurance executives say Insurtechs are already innovating in the insurance industry. 81% of the outperforming insurance companies surveyed reported having invested in Insurtech or already cooperating with Insurtech businesses. The given data eloquently emphasize how carefully the insurance industry leaders follow the current insurtech trends.

How DashDevs Can Help Boost Your Business with Insurtech Innovations

Insurtech trends show the direction of the insurance industry. Embracing emerging technologies is crucial for operational efficiency, customer engagement, and competitive advantage. In numerous projects, we have made sure that our clients` efforts and investments in implementing advanced software systems are repaid a hundredfold, bringing significant results.

We’ve assisted businesses in the fintech, healthcare, and retail sectors revamping their digital processes, leading to significant revenue growth and cost reductions. For instance, our digital transformation strategies for established products have enabled them to expand their user base by 15 times and raise revenue by 10 times.

At Dashdevs, we specialize in developing advanced Insurtech solutions tailored to your needs. Contact us today to explore how to achieve your business goals with the latest insurance technology trends.