AI in Insurance Market Size

Artificial Intelligence (AI) in Insurance  Insurance Market Overview

The AI in Insurance Market size was valued at USD 7.5 billion in 2023. The Artificial Intelligence (AI) in Insurance Market size is projected to grow from USD 11.33 billion in 2024 to USD 49.3 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 32.30% during the forecast period (2024 - 2032).

Growing need to automate the operational process and exponential growth of the insurance industry across the globe are driving the growth of the market.

Figure 1: AI in Insurance Market Size, 2023-2032 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database, and Analyst Review

Covid-19 Analysis

Post-COVID-19, the AI in Insurance market size was valued at USD 3.1 billion in 2021 and is projected to reach USD 40.1 billion by 2030, growing at a CAGR of 32.6% from 2020 to 2030. ly, the pandemic has caused a recession in the economy, forcing companies to drastically restructure their operations. The COVID-19 epidemic has had a significant influence on the AI in Insurance and people's lives all across the world. Many organisations had waged the struggle on both fronts with zeal. With the advent of a worldwide economic downturn in the millions and trillions of dollars, there was widespread expectation that the major recovery period will extend well into the few more year. The slow growth rate and a variety of other reasons are to blame for the epidemic. The pandemic poses various problems to the AI in Insurance Market industry; it affects people worldwide. Significant strategic changes are taking place. MNCs are boosting their investments in response to rising consumer demand worldwide.

In 2020 the world was faced with a pandemic like never before and this completely changed the way world functions in the most fundamental ways. The pandemic adversely affected many aspects of life and rendered multiple markets to sustain huge losses in these times. The insurance industry has always been linked to economic growth; hence, the COVID-19 problem has had a substantial impact on insurers worldwide. While the sector implements new work standards and shifting regulations through digital efforts, some of the more immediate effects that translate to reduced earnings and growth are driving insurers to cut costs while still performing more effectively. At the same time, the pandemic has shifted client preferences and rewired the economy's central circuit, which has an indirect impact on the insurance business on all scales.

COVID-19 is still having a huge influence on individuals, society, industry, and the economy. The insurance industry was not immune to its effects, although insurers reacted rapidly to the crisis. As the larger economy recovers and responds to the epidemic, insurers will confront a lot of problems, but they will also see a plethora of new possibilities in the medium to long term. A priority concern for insurance carriers is to serve their customers and fulfil their promises while ensuring the safety and well-being of their employees. The majority of insurers are in the process of implementing or have already implemented business continuity strategies.

AI in Insurance Market Trends

Growing trend of personalized insurance services

Customers are increasingly seeking personalised insurance services, owing to an increase in chatbot use among personalise insurance services and increased competition among insurance providers for maximum market share. Various insurance firms offer budget management apps powered by machine learning, which assist clients in meeting their financial goals and improving their money management process, hence fueling market growth.

Furthermore, robo-advisors are a fast rising trend in personalised insurance services, as they primarily target investors with limited resources, such as individuals and small- to medium-sized organisations, for fund management. Furthermore, machine learning-based robo-advisors can employ standard data processing techniques with algorithms to generate client portfolios and solutions for its users, such as trading, investments, and retirement planning. For example, CLARA Analytics released CLARA Optics in April 2022, a software product that uses AI and machine learning to scan, sort, and analyse bills and medical documents to create a claim-based medical record and contributes to the commercial insurance industry's use of artificial intelligence technology.

Artificial Intelligence (AI) in Insurance Market Segment Insights

AI in Insurance Offerings Insights

Based on offerings, the AI in Insurance market is segmented into software, service, and hardware. Software account for 42.9% market share in 2021. Due to its capacity to extract data, provide real-time insights, and help decision-making, the software is expected to have the biggest market share during the forecast period. Cortana virtual help, Google Cloud Machine Language, IBM Watson, Tensorflow, and other industrial software solutions are available.

During the projection period, the services category is expected to develop at the quickest CAGR. The increasing adoption of smart solutions is likely to fuel demand for AI services. These services leverage the capabilities of solutions to speed up business activities.

Furthermore, AI hardware is expected to develop steadily due to its assistance in improving process efficiency. Artificial intelligence storage and servers such as OVHcloud servers, Broadberry servers, IBM Enterprise AI server, Intel Optane storage, DDN's A3I storage, and others are included in the hardware.

FIGURE 2: AI IN INSURANCE MARKET SHARE BY OFFERINGS 2021 (USD Billion)

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

AI in Insurance Deployment Mode Insights

Based on Deployment Mode, the AI in Insurance market is segmented into cloud and on premise. In 2021, the cloud segment held a 60% share of the market. Flexibility, automated software updates, disaster recovery via cloud-based backup systems, increased collaboration, monitoring document version control, and data loss prevention via robust cloud storage facilities are factors driving market growth for machine learning software solutions and services.

The cloud deployment mode is predicted to hold the biggest market share and increase at an 18% CAGR throughout the forecast period in the machine learning industry. Cloud-based software enables customers to transition from machine learning to deep learning, hence increasing adoption.

AI in Insurance Technology Insights

Based on Technology, the AI in Insurance market is segmented into Deep Learning & Machine Learning, Natural Language Processing, Computer Vision, Others. The Deep Learning & Machine Learning segment is expected to exhibit the highest value during the projected period.

The Machine Learning and Deep Learning category held 37.98% of the market in 2021 and is likely to maintain its dominance throughout the forecast period. Machine learning was once the exclusive realm of data scientists; now, business users may now develop data models and make accurate predictions more quickly. Insurers already have domain experts: actuaries, claims managers, and underwriters who, with the correct training and tools, can contribute to machine learning initiatives. Insurers are looking towards machine learning to automate their entire workflow.

AI in Insurance Enterprise Size Insights

Based on Enterprise Size, the Artificial Intelligence (AI) in Insurance Market is segmented into Large Enterprise and SMEs. The Large enterprises segment is expected to exhibit the highest value during the projected period

Large enterprises dominated the market in 2021, accounting for 62.3% of the total. AI and data science are increasingly being used to deliver predictive insights into company processes. Large corporations are concentrating on deep learning, machine learning, and decision optimization to provide high commercial value. Several multinational organisations have widely used machine learning to extract required knowledge from massive data sets and predict the outcomes of various issues.

Small and medium-sized enterprises are predicted to increase at a 9.2% CAGR over the projection period. Machine learning is gaining popularity among small and medium-sized businesses. Machine learning offers a straightforward and low-cost implementation alternative.

AI in Insurance Application Insights

Based on Application, the AI in insurance market is segmented into Claims Management, Risk Management and Compliance, Chatbots, and Others. The claim management is expected to exhibit the highest value during the projected period.

Over the forecast period, claims management will continue to dominate the market share by application. Artificial intelligence (AI) is utilised for underwriting, claims, new business, retention, marketing, to boost operational efficiencies, and to enhance the customer experience. An Machine learning is being used by insurers to increase operational effectiveness across the claims process, from filing to resolving. Additionally, predictive modelling and machine learning can give insurers a better understanding of claims expenses. Through proactive management, quick settlement, focused investigations, and improved case management, these insights can help a carrier save millions of dollars in claim costs.

AI in Insurance Regional Insights

By Region, the study segments the market into North America, Europe, Asia-Pacific, Middle East & Africa, and South America. North America held the largest share of the artificial intelligence in insurance market by region in 2021, and it is anticipated that it will continue to do so throughout the forecast period. This is due to the presence of major players that provide cutting-edge solutions and make significant investments in technologies like 5G and IoT, which present lucrative opportunities for the market. Due to the presence of prominent market players like Microsoft Corporation (US), Amazon Web Services Inc. (US), IBM Corporation (US), and Avaamo Inc., North America held 36.76% of the market share in 2021 and is anticipated to maintain its dominance during the projected period (US). Due to its highly skilled workforce in businesses and its focus on research and development, the United States has the largest market share in the region

Asia-Pacific is anticipated to experience the fastest growth during the projection period. The demand for AI in the insurance sector is increasing as a result of government initiatives to promote digitization and growing investments in cutting-edge technologies like AI and IoT.

In come of the country of Asia-Pacific insurance business, AI is still in its beginnings. On the other hand, AI has the potential to be utilized throughout the whole insurance business. It has the ability to provide important digital opportunities, minimize process duplication, increase process automation, assist in cost reduction, increase efficiency, improve customer experiences, and improve data quality, gathering, and analytics. Due to growing awareness of the significance of improving overall 5G, IoT, and other technological services to ensure affordable networking, servers, storage solutions, and communications service providers, Asia-Pacific is predicted to have considerable growth over the projected period (CSPs). A 17.4% CAGR is anticipated for growth in Asia Pacific. A strong and dynamic start-up ecosystem exists in the region's booming economies, such as China and the Philippines. This is made possible by an increasingly well-trained labour force and an increase in the use of machine learning in developing nations with enormous talent pools, like India. Through the forecast period, consumers who are eager to investigate AI-enabled services and solutions are anticipated to drive regional market growth

The insurance business is expected to see tremendous growth in Europe, which will lag North America in terms of market share. The expanding usage of digital technology to streamline business processes and enhance customer experience is driving market expansion in Europe.

Further, the countries considered in the scope of the AI in Insurance market are the US, Canada, Mexico, UK, Germany, France, Italy, Spain, Switzerland, Austria, Belgium, Denmark, Finland, Greece, Hungary, Italy, Luxembourg, Netherlands, Norway, Poland, Portugal, Slovakia, Sweden, Romania, Ireland, China, Japan, Singapore, Malaysia, Indonesia, Philippines, South Korea, Hong Kong, Macau, Singapore, Brunei, India, Australia & New Zealand, South Africa, Egypt, Nigeria, Saudi Arabia, Qatar, United Arab Emirates, Bahrain, Kuwait, and Oman, Brazil, Argentina, Chile, and others.

AI in Insurance Key Market Players & Competitive Insights

Major market players are spending a lot of money on R&D to increase their product lines, which will help the Artificial Intelligence (AI) in Insurance market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new product launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the AI in Insurance industry must offer cost-effective services and solution to expand and survive in an increasingly competitive and rising market environment.

Apple Inc. expanded its intelligent solutions by purchasing significant market startups. Furthermore, the knowledge of these start-ups' engineers and technicians aids in the development of creative solutions. These firms are acquiring significant start-ups all around the world in order to grow their presence and improve their solution offerings. Product launches have been regarded as one of the major strategies for improving the company's existing market share and broadening its customer base through product development. The major market players are concentrating their efforts on research and development in order to meet the growing demands of various industrial applications.

Key Companies in the AI in Insurance market include

• Applied Systems


• Cape Analytics


• OpenText Corporation


• IBM Corporation


• Oracle Corporation


• Pegasystems Inc


• Quantemplate


• Microsoft Corporation


• Salesforce, Inc


• SAP SE


• SAS Institute Inc


• Shift Technology


• SimpleFinance


• Slice Insurance Technologies


• Vertafore, Inc


• Zego


• Zurich Insurance Group Ltd

Artificial Intelligence (AI) in Insurance Industry Developments

The Resonate Insurance solution, which includes hundreds of insurance-specific data attributes including demographics, psychographics, behaviours, sentiment, intent, and values of today's insurance customers, will be made available in March 2023 by Resonate, the industry's leading provider of AI-powered consumer data and intelligence.

Apollo, an AI platform to automate typical claim processes like document handling, data extraction, and claim adjudication, was released in march 2023 by Embrace Pet Insurance, a top-rated pet health insurance company for dogs and cats in the United States. The software, which was entirely created in-house, processes claims more than 75% faster than Embrace's traditional procedure. Since its inception in June 2022, Apollo has processed approximately 250,000 claims, or more than half of all claims, using the patented "Lightning Claims" technique to determine covered claims.

April 2022

Applied Systems announced a new partnership with Koos Intelligence to use artificial intelligence and natural language processing to optimise and simplify insurance sales and servicing processes. The integration of Koos Intelligence, Applied Epic, and Applied Rating Services will allow brokers to provide a voice-enabled virtual assistant for customer quotation, resulting in a more digital and faster customer experience.

July 2021

The Gloria AI Edge Box was developed in collaboration between Qualcomm Technologies, Inc. and Foxconn Industrial Internet. Its goal is to encourage the adoption of smart edge applications. The new technology can process 70 trillion operations per second.

April 2020

Google LLC had deploy an AI-enabled chatbot for contact centers dubbed Rapid Response Virtual Agent. This chatbot is intended to address customer concerns about the COVID-19 epidemic via voice, chat, and other social media.

AI in Insurance Market Segmentation

AI in Insurance Offerings Outlook

• Hardware


• Software


• Service

AI in Insurance Deployment Mode Outlook

• On-premise


• Cloud

AI in Insurance Technology Outlook

• Deep Learning & Machine Learning


• Natural Language Processing


• Computer Vision


• Others

AI in Insurance Enterprise Size Outlook

• 
  

  Large Enterprise

  
  


• 
  

  SMEs

  
  

AI in Insurance Application Outlook

• Claims Management


• Risk Management and Compliance


• Chatbots


• Others

AI in Insurance Regional Outlook

• 
  

  North America

  
  
  
  
  • US
  
  
  • Canada
  
  
  • Mexico
  
  
  
  


• 
  

  Europe

  
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Rest of Europe
  
  
  
  


• 
  

  Asia-Pacific

  
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Rest of Asia-Pacific
  
  
  
  


• 
  

  Middle East & Africa

  
  
  
  
  • South Americ
  
  
  
  

Intended Audience

• Insurance Industry


• IoT Industry


• Software Industry


• Technology Investors


• Regulatory Industries


• Government Bodies


• Financial Service Provider