AI In Insurance Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 14.51 Billion |
| Market Size (2029) | USD 65.26 Billion |
| CAGR (2024 - 2029) | 35.06 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
AI In Insurance Market Analysis
The AI In Insurance Market size is estimated at USD 14.51 billion in 2024, and is expected to reach USD 65.26 billion by 2029, at a CAGR of 35.06% during the forecast period (2024-2029).
- Artificial Intelligence (AI) is reshaping the insurance industry, boosting operational efficiency, refining risk management, and elevating customer service. This transformation is fueled by the widespread adoption of AI technologies in key insurance processes, such as underwriting, claims processing, and customer interactions.
- Infosys reports that AI technologies can slash processing costs by 50-65%, reduce claims regulation prices by 20-30%, and cut processing times by 50-90%. Moreover, AI bolsters fraud detection, allowing insurers to sift through vast datasets for suspicious patterns, thereby recouping significant losses from fraudulent claims.
- AI-driven chatbots and virtual assistants offer round-the-clock support, guiding customers through claims processes and enhancing overall service delivery. Furthermore, AI integration facilitates hyper-personalization of insurance products, customizing offerings based on individual customer data and behaviors.
- With 87% of insurers channeling over USD 5 million annually into AI technologies (source: Genpact), the adoption of AI in insurance is set to surge. These investments focus on refining risk selection, pricing decisions, and enriching customer experiences. As AI technology advances, it promises to further streamline processes and elevate service quality across the industry.
- The potential for data breaches poses a major risk. Insurers face challenges in ensuring robust security measures while integrating AI systems, as any lapse can lead to severe financial penalties and reputational damage. This might hinder the market growth.
- The pandemic highlighted the critical role of insurance, spurring demand for products like cybersecurity insurance amidst the rise of remote work. In response, insurers are crafting new offerings to tackle these evolving risks. To streamline claims related to COVID-19, regulatory bodies have rolled out standardized products like Corona Kavach and Corona Rakshak, aiming to simplify the purchasing journey and bolster consumer trust in insurance offerings.
AI In Insurance Market Trends
Generative AI to Cater Major Market Demand
- Generative AI (Gen AI) is reshaping the insurance sector, streamlining operations, especially in underwriting and claims management. This technological advancement not only boosts efficiency but also tackles age-old challenges in the industry.
- In 2023, underwriting inefficiencies led to losses surpassing USD 21 billion in the insurance sector. However, by harnessing generative AI, insurers stand to reclaim billions through optimized operations and diminished manual data handling (source: Reinsurance Publications).
- Canara HSBC Life Insurance's OmniGen AI offers a cutting-edge generative AI solution, acting as a co-pilot for underwriters. This innovation not only slashes processing times but also sharpens risk evaluation accuracy. By weaving together diverse data attributes, it paves the way for swifter and more uniform decision-making, elevating the underwriting experience.
- With the capability to automate 62% of underwriting and claims management processes, generative AI frees human experts to concentrate on more valuable tasks. This transition is vital in tackling the industry's long-standing challenge of processing unstructured data. By turning this unstructured data into actionable insights, generative AI bolsters the precision of claims assessments. Consequently, insurers leveraging this technology can enhance their loss ratios by 12-25% compared to their counterparts shunning AI solutions.
- Demonstrating the industry's faith in AI's promise, companies like Federato are securing hefty investments, such as a recent USD 40 million, to craft AI-driven platforms aimed at refining risk analysis and underwriting.
North America to Hold Significant Share
- Across North America, the insurance sector has undergone a significant transformation due to the integration of Artificial Intelligence (AI), resulting in heightened efficiency, enhanced customer interactions, and more precise risk assessments.
- Market.us Scoop reports that in North America, over 76% of insurance executives feel an unprecedented pressure for innovation, driving a surge in AI technology adoption. About 82% of insurance firms have rolled out AI-driven chatbots and virtual assistants, achieving a notable 25% cut in service costs. Additionally, 75% of providers have embraced AI-enabled underwriting tools, boosting pricing accuracy by roughly 15%.
- Conning's latest survey reveals that 77% of insurance professionals in North America are now integrating AI technologies into their operations, up from 61% the prior year. Furthermore, 67% of firms are piloting large language models (LLMs), underscoring a pronounced shift towards sophisticated AI applications.
- Statistics Canada's recent survey highlights that as of May 2024, 10.9% of finance and insurance firms are utilizing AI in their operations, with projections suggesting a rise to 12.9% in the coming year. This aligns with a broader observation where 28.3% of surveyed entities reported enhanced operational efficiency attributed to technology adoption, AI included.
- On the investment front, CGI, a prominent IT and business consulting entity, has unveiled a commitment of USD 1 billion over three years, targeting an expansion of AI services tailored for insurers. The goal is to empower these firms with advanced analytics and automation, addressing challenges like fraud detection and risk management with greater efficacy.
AI In Insurance Industry Overview
The AI In Insurance market is highly competitive and fragmented, primarily driven by the presence of major players. These key players employ strategies such as mergers, acquisitions, and product innovations to maintain a competitive edge and broaden their global footprint. Key player include IBM Corporation, Microsoft Corporation, SAP SE, and others.
The adoption of AI in insurance represents a significant shift towards more efficient, accurate, and customer-centric operations. As companies like Canara HSBC Life Insurance and Federato demonstrate through their innovative solutions, leveraging AI can lead to substantial improvements in underwriting processes and overall business performance. The ongoing evolution of this technology promises to further transform the insurance landscape, making it imperative for industry players to embrace these changes proactively.
AI In Insurance Market Leaders
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IBM Corporation
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Microsoft Corporation
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SAP SE
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OpenText Corporation
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Oracle Corporation
*Disclaimer: Major Players sorted in no particular order
AI In Insurance Market News
- September 2024: Majesco, a leading provider of cloud-based insurance software, has announced the launch of its new AI ecosystem designed to streamline insurance workflows. Majesco is committed to advancing digital transformation, and this new product leverages AI to automate tasks, improve efficiency, and offer advanced data insights.
- July 2024: ICICI Lombard, a leading private general insurer in India, announced the launch of its revolutionary health insurance product, ‘Elevate’. Powered with AI, the first-of-its-kind health product is loaded with cutting-edge features and add-ons, offering personalised solutions to meet the needs of dynamic lifestyles, unforeseen medical emergencies and medical inflation.
AI In Insurance Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Assessment of Impact of macroeconomic trends
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Automation of Claims Processing
5.1.2 Enhanced Risk Assessment and Underwriting
5.2 Market Restraints
5.2.1 Data Privacy Concerns and Integration Challenges
6. MARKET SEGMENTATION
6.1 By Offering
6.1.1 Hardware
6.1.2 Software
6.1.3 Services
6.2 By Deployment Mode
6.2.1 Cloud
6.2.2 On-Premises
6.3 By Enterprise Size
6.3.1 SMEs
6.3.2 Large Enterprises
6.4 By End-users
6.4.1 Life and Health Insurance
6.4.2 Property and Casualty Insurance
6.5 By Geography***
6.5.1 North America
6.5.2 Europe
6.5.3 Asia
6.5.4 Latin America
6.5.5 Middle East and Africa
6.5.6 Australia and New Zealand
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 IBM Corporation
7.1.2 Microsoft Corporation
7.1.3 SAP SE
7.1.4 OpenText Corporation
7.1.5 Oracle Corporation
7.1.6 Applied Systems, Inc.
7.1.7 Cape Analytics, Inc.
7.1.8 Pegasystems Inc.
7.1.9 Salesforce, Inc.
7.1.10 SAS Institute Inc.
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OUTLOOK OF THE MARKET
AI In Insurance Industry Segmentation
Artificial intelligence can analyze claim forms, documents and visual data such as images and video, and automatically prioritize incoming claims based on their complexity and urgency. Insurers can streamline this process and expedite claims settlement.
The AI in insurance market is segmented by offering (hardware, software, services), by deployment mode (cloud, on-premises), by enterprise size (SMEs, large enterprises), by end-user (life and health insurance, property and casualty insurance), by geography (North America, Europe, Asia-Pacific, Latin America, Middle East and Africa). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Offering | |
| Hardware | |
| Software | |
| Services |
| By Deployment Mode | |
| Cloud | |
| On-Premises |
| By Enterprise Size | |
| SMEs | |
| Large Enterprises |
| By End-users | |
| Life and Health Insurance | |
| Property and Casualty Insurance |
| By Geography*** | |
| North America | |
| Europe | |
| Asia | |
| Latin America | |
| Middle East and Africa | |
| Australia and New Zealand |
AI In Insurance Market Research FAQs
How big is the AI In Insurance Market?
The AI In Insurance Market size is expected to reach USD 14.51 billion in 2024 and grow at a CAGR of 35.06% to reach USD 65.26 billion by 2029.
What is the current AI In Insurance Market size?
In 2024, the AI In Insurance Market size is expected to reach USD 14.51 billion.
Who are the key players in AI In Insurance Market?
IBM Corporation, Microsoft Corporation, SAP SE, OpenText Corporation and Oracle Corporation are the major companies operating in the AI In Insurance Market.
Which is the fastest growing region in AI In Insurance Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in AI In Insurance Market?
In 2024, the North America accounts for the largest market share in AI In Insurance Market.
What years does this AI In Insurance Market cover, and what was the market size in 2023?
In 2023, the AI In Insurance Market size was estimated at USD 9.42 billion. The report covers the AI In Insurance Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the AI In Insurance Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
AI In Insurance Industry Report
Statistics for the 2024 AI In Insurance market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. AI In Insurance analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
