The value of global insurance premiums underwritten by artificial intelligence will exceed $20 billion by 2024, up from an estimated $1.3 billion in 2019, according to new data from Juniper Research.
This growth will be driven by streamlined underwriting processes, faster customer on-boarding and reductions in operational costs enabled by AI, according to the forecast.
The report, Insurtech: Impact Assessments, Insurer Readiness & Market Forecasts 2019-2024, says that increased use of telematics and Internet of Things (IoT) management tools will enable efficiencies in underwriting in the motor, home, life and health insurance sectors. Insurers’ increased access to operational and behavioural data will enable enhanced data analysis capabilities; allowing insurers to guard against evolving risks.
The research anticipates that global revenues from telematics will grow from $1.2 billion in 2019 to $5.4 billion by 2024. It forecasts that this growth will be driven by increasing support from automotive OEMs, as part of wider connected car strategies. Increasing vehicle numbers in Far East and China will drive telematics growth, increasing its revenue share from 15% in 2019 to 33% in 2024.
The research forecasts that industry cost savings from AI will grow from $340 million in 2019 to $2.3 billion by 2024, as insurers exploit efficiencies achieved through the automation of resource-intensive tasks. The motor insurance industry will have the largest cost savings; accounting for over 60% of total savings globally by 2024, enabled by the significant uptake of AI-based insurtech premiums and several insurtech vendors applying AI to great effect.
Additionally, the research identifies the healthcare industry as a sector primed for disruption and recommends that health insurers target AI as a way to reduce operating costs and enable competitive pricing. It anticipates that advances in NLP (natural language processing) will enable insurers to leverage the abundance of existing unstructured data, allowing them to manage and create value from more data sources, creating streamlined processes.
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