Library: Insurance News – AI gains traction across insurance
Executive summary :
Spending on artificial intelligence (AI) platforms in insurance will grow by almost a quarter every year out to 2024 as the industry exhibits a general willingness to innovate, analytics firm GlobalData predicts.
Incumbent insurers are at threat from insurtechs using technology to personalise the insurance experience, and the shift towards digital insurance has been hastened by the COVID-19 pandemic which has necessitated innovation within the insurance industry, GlobalData says.
It forecasts that AI platform sales in the insurance sector will reach $US3.4 billion ($4.39 billion) in 2024 from $US1.2 billion ($1.55 billion) in 2019 – a compound annual growth rate of 23%.
Revenue growth is set to nearly double between 2019 and 2024, which GlobalData says is a clear sign insurers are keen to innovate.
The scope for AI is growing
GlobalData analyst Sophia Patel says AI demand in insurance is no longer limited to basic conversational platforms for customer queries.
“Applications for AI in insurance now span the sector’s value chain – from product development and risk profiling to claims handling,” she said. “As more legacy insurers inevitably move to the cloud, AI platforms, which are more compatible with these operating systems, are certain to see greater traction.”
Insurtechs draw on technologies ranging from AI to the internet of things (IoT) to offer cheaper premiums and customisable policy coverage, disrupting the wider market.
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