The global insurance analytics market size is expected to grow from USD 8.8 billion in 2020 to USD 20.6 billion by 2026, at a Compound Annual Growth Rate (CAGR) of 15.1% during the forecast period. The major driving factors in the insurance analytics industry are increasing focus on enhancing customer experience and the growing trend of digitalization.
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Demand to reduce the time for efficient management of claims and insurance policies is expected to boost insurance companies segment to hold a larger market size
Insurance companies are the end-user companies that provide various types of insurance, such as consumer insurance (including life and health insurance, and vehicle/auto insurance) and commercial insurance (employee insurance and asset insurance for manufacturing companies). Insurance companies are now widely adopting various technology solutions, including analytics, for their internal and customer-facing services. For example, multi-line carriers that supply consumer policies — for homes, cars, and small groups — in addition to business services, such as P&C insurance, run several applications to handle underwriting, claims, and Customer Relationship Management (CRM). Increasing service demand coupled with critical end-of-year fiscal reporting forces these organizations to adopt advanced technological solutions, leading to a larger market size during the forecast period. Bajaj Allianz Life Insurance, a Pune, India-based life insurance provider, is among the leading insurers in India who are using predictive analytics across their insurance operations. The company is leveraging predictive analytics across its customer life cycle to assess customer risk, to determine the potential of a customer to renew or lapse a policy, and to act accordingly. Risk management, fraud detection, customer management, and personalization are some of the key application areas where the India-based insurer is applying analytics to improve operational efficiency, reduce cost, and enrich customer experience.
The growing demand to reduce the response time for various claims management processes and the increasing adoption of IoT insurance driving the demand for process optimization during the forecast period
Insurers are widely using analytics solutions to understand the potential risks and deploy countermeasures to mitigate losses, or at least screen, pre-empt, and assess the cost of risks in the underwriting process. Risk management involves the identification, assessment, and management of potential risks, incorporating analytics to support decision-making by clearly stating business goals and objectives, and facilitating precise information management with a better understanding of the trade-offs between risks and rewards. Risk management provides insurers with the risk capacity to maintain specific credit ratings, manage capital, and reduce earnings volatility across insurance companies.
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Unique Features in Insurance Analytics Market:
By utilising data-driven insights, the Insurance Analytics market brought distinctive features that were transforming the insurance industry. Better decision-making, risk assessment, and consumer involvement were made possible by these insights. Notably, these technologies excelled at risk evaluation and forecasting, utilising both past and present data to precisely assess risks and anticipate probable accidents.
A noteworthy aspect concerned procedures for detecting and preventing fraud, which used data analytics to spot fraudulent trends and behaviours and minimise financial losses for insurance companies. Claims management optimisation eased processing and settlement, while customer behaviour analysis improved engagement by comprehending preferences and wants.
By utilising data insights to make informed judgements about the approval of policies and risk assessment, insurance analytics provided underwriting enhancements. In order to forecast trends and enable proactive decision-making, predictive modelling uses historical data, while consumer segmentation enables customised offerings. Processing data in real time gave current information, enabling quick answers to market developments and client requests.
Insurance companies now have access to actionable information, driving strategies, and cutting-edge products thanks to data-driven decision-making. Analysis of market trends gave a thorough awareness of changes and opportunities in the industry. Regulatory compliance ensured conformance to evolving regulations, while performance evaluation measures assisted in evaluating tactics.
Major Highlights of the Insurance Analytics Market:
By utilising data-driven insights, the Insurance Analytics market saw notable highlights that were transforming the insurance business. The market is focused on improved risk assessment through advanced analytics, enabling insurers to precisely forecast upcoming incidents based on historical and real-time data.
One particularly noteworthy breakthrough was the creation of sophisticated fraud detection systems that use data analytics to spot patterns and behaviours of fraud and protect insurers from monetary losses. Customer behaviour analysis, which was used to discover preferences and demands for better satisfaction, was used to generate personalised methods that improved customer interaction techniques.
Efficiency in claims handling was given first priority, and this was done by streamlining procedures and accurately processing claims to guarantee quick and accurate payments. By utilising data insights to optimise underwriting procedures, it was possible to make well-informed decisions regarding risk assessment, pricing, and policy approval.
A proactive approach to decision-making was made possible by advances in predictive modelling, which enabled insurers to develop models that predict future patterns based on existing data. Through client segmentation, strategies were customised, and real-time data processing enabled prompt answers to market developments and customer questions.
Data-driven decisions that were influenced by practical insights to create effective strategies and improve consumer experiences were made. Analysing market trends assisted insurers in maintaining agility, while performance evaluation measures evaluated the efficacy of strategies.
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Top Key Companies in Insurance Analytics Market:
The major insurance analytics vendors include IBM(US), Salesforce(US), Oracle(US), Microsoft(US), Sapiens (Israel), OpenText (Canada), SAP (Germany), Verisk Analytics (US), SAS Institute (US), Vertafore (US), TIBCO (US), Qlik (US), Board International (Switzerland), BRIDGEi2i (US), MicroStrategy (US), Guidewire Software (US), LexisNexis Risk Solutions (US), WNS (India), Hexaware Technologies (India), Pegasystems (US), Applied Systems (US), InsuredMine (US), ReFocus AI (US), RiskVille (Ireland), Pentation Analytics (US), Habit Analytics (US), Artivatic.ai (India), CyberCube (US), and Arceo.ai (US).
These players have adopted various growth strategies, such as partnerships, agreements, and collaborations, and new product launches, to further expand their presence in the global insurance analytics market. Partnerships and new product launches have been the most dominating strategy adopted by the major players from 2017 to 2020, which has helped them innovate on their offerings and broaden their customer base.
IBM operates in five business segments: cognitive solutions, global business services, technology services, and cloud platforms, systems, and global financing. The global business services segment contributes the maximum as it helps to improve customer performance with a major focus on IT. IBM has shifted its development from experimental-based to hybrid cloud-based AI-driven applications that focus on digital reinvention. It offers a robust product portfolio and majorly focuses on improving the product efficiency of analytics, cloud, cognitive, commerce, IoT, industry solutions, systems, mobile, security, social, and Watson technologies. IBM’s product portfolio includes the analytics cloud platform, blockchain platform, Watson IoT platform, and Watson Customer Engagement. The company has a significant presence in over 175 countries and mainly caters to North America, Southeast Asia, Eastern Europe, MEA, and Latin America. In the insurance analytics market, IBM offers insurance analytics. IBM Insurance Analytics has a suite of solutions comprising customer retention, cross-sell and up-sell analytics, distribution optimization, claims optimization and fraud prevention, underwriting optimization, financial performance management, and risk management and compliance. Moreover, IBM Watson also gives insurance companies the ability to better understand customer behaviors. This insight allows best-in-class companies to create personalized offers and optimize every interaction to deliver an outstanding customer experience that will increase retention rates.
Microsoft develops software, services, devices, and solutions to compete in the era of the intelligent cloud and intelligent edge. With the increase in investments in a mix-reality cloud, Microsoft enables its customers to digitalize their business processes. The company’s offerings include cloud-based solutions that provide customers with software, platforms, content, and deliver solution support and consulting services for its clients. Its product offerings include Operating Systems (OS), cross-device productivity applications, server applications, business solution applications, desktop and server management tools, software development tools, and video games. Microsoft’s offering of platforms and tools helps drive the productivity of small businesses, the competitiveness of large businesses, and efficiency of the public sector. It works on three pillars, which include privacy, cybersecurity, and responsible AI, to provide tools and frameworks for its customers to encourage policy change. The company focuses on investing in data centers and other hybrid and edge infrastructure to enhance its service offerings. Microsoft operates in three segments that include productivity and business processes, intelligent cloud, and more personal computing. The company caters to a wide range of verticals, including finance and insurance, manufacturing and retail, energy and utilities, media and entertainment, public sector, healthcare, and IT and telecommunications. It has a geographical presence in more than 190 countries across North America, APAC, Latin America, MEA, and Europe. In insurance analytics, Microsoft offers Azure for Insurance which helps insurance companies manage their high-performance computing needs. It also provides Cortana Intelligence Suite.
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