New data from Juniper Research forecasts that the value of AI underwritten insurance premiums will exceed $20 billion by 2024, up from an estimated $1.3 billion in 2019. This growth will be driven by streamlined underwriting processes, faster customer onboarding and reductions in operational costs enabled by AI.
According to the research, Insurtech: Impact Assessments, Insurer Readiness & Market Forecasts 2019-2024, efficiencies in underwriting will be enabled by increased use of telematics and IoT management tools 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.
Far East to Drive Telematics Revenue Growth
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 & China will drive telematics growth, increasing its revenue share from 15% in 2019 to 33% in 2024.
Premiums to Grow by 1,500% over Next 5 Years
AI Claims Efficiencies Drive Cost Savings
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.