As per the report published by Fior Markets, the global insurance analytics market size is expected to grow from USD 8 billion in 2020 to USD 24.47 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 15% during the forecast period.
The insurance analytics market is witnessing significant growth in the past years. During the COVID-19 pandemic, the increasing demand for big data and predictive modeling capabilities promotes the use of insurance analytics solutions, and the growth in acceptance of IoT devices drives the adoption of insurance market analytics. Government regulations, as well as security and data privacy concerns, are some of the issues that limit industry expansion.
In the insurance industry, analytics is widely utilized to control risk in underwriting, pricing, rating, claims, marketing, and reserving. Furthermore, this analytic solution aids insurance firms in risk management and the provision of better insurance contracts in areas such as health, life, property, and casualty. Furthermore, the primary goal of insurance analytics is to save costs, improve customer interaction procedures, and produce trustworthy reports across many product lines by using predictive analytics in insurance models. Various technological solutions, including analytics, are now widely used by insurance firms for both internal and customer-facing services. Multi-line carriers, for example, operate numerous systems to manage underwriting, claims, and Customer Relationship Management (CRM) for consumer policies – for automobiles, homes, and small groups as well as commercial services, such as P&C insurance.
The global insurance analytics market is estimated to witness significant growth as a result of the increased demand for the deployment of advanced technologies to deliver integrated and value-added services to consumers while lowering operating costs. With increased competition in the insurance industry, the need for analytics solutions is increasing to be competitive in a global market. The factors restraining the market growth are that insurers keep a massive database of Personally Identifiable Information (PII) about policyholders, birthdates, including names, social security numbers and email addresses, health information, and job data, such as income, that makes an enticing target for identity thieves. Insurance analytics solution companies have considerable potential to extend and enhance their products in developing economies.
Key players leading in the global insurance analytics market include IBM Corporation, Microsoft Corporation, Guidewire Software Inc., Oracle Corporation, LexisNexis Risk Solutions Salesforce.SE, MicroStrategy Incorporate, TIBCO Software Inc., Applied Systems, Pegasystems, Inc., Hexaware Technologies Limited, Palantir Technologies, SAS Institute Inc., and Sapiens International Corporation. Due to their high brand awareness, diversified product portfolios, powerful distribution and sales networks, and effective organic and inorganic growth strategies, these firms lead the market. IBM Corporation and Microsoft Corporation are some of the key manufacturers operating in the global insurance analytics market.
- For instance, in 2018, Verisk Analytics, Inc. spent USD 47.6 million on research and development to update its product range and create new products and services.
- In February 2018, Sapiens International purchased Adaptik Corporation, an insurance policy provider. The acquisition aided the previous company’s expansion into the North American market.
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The services segment dominated the market and held the largest market share of 80% in the year 2020
On the basis of components, the global insurance analytics market is segmented into tools and services. The services segment dominated the market and held the largest market share of 80% in the year 2020. This category is projected to grow at the fastest rate throughout the forecast period because of rising technical advancements that make it easier to integrate new technologies with existing ones.
The risk management segment dominated the market and held the largest market share of 29.15% in the year 2020
On the basis of application, the global insurance analytics market is segmented into claims management, risk management, customer management and personalization, and process optimization. The risk management segment dominated the market and held the largest market share of 29.15% in the year 2020. The potential of insurance analytics to minimize repeat losses, improve insurance premiums, and enhance reporting and performance monitoring improves the adoption rate of risk management analytics systems.