The global digital insurance platform market was valued at USD 98 billion in the year 2019 and is estimated to reach USD 111.43 billion by the year 2020.
It is expected to grow at the CAGR of 13.7% within the time horizon of 2020-2025 because of rising use of Internet of things technologies, increasing adoption of digital platforms, growing insurance industry, and rising application of cloud computing technology
- Definition / Scope
- Market Overview
- Market Risks
- Top Market Opportunities
- Market Trends
- Industry Challenges
- Technology Trends
- Regulatory Trends
- Market Size and Forecast
- Market Outlook
- Technology Roadmap
- Distribution Chain Analysis
- Competitive Landscape
- Competitive Factors
- Key Market Players
- Strategic Conclusion
- References
- Appendix
Definition / Scope
The digital insurance platform consists of software that allows the insurance company to include digitalization in the insurance process (policy implementation, claim management, reinsurance management, billing, premium accounting, etc).
It provides easy access to customer databases and assists to manage the digital insurance ecosystem. It also provides easy access to the salient information about the insurance policy and processes to the customers through the use of digital technology.
The global digital insurance platform market is concerned with the development and maintenance of the services and products required for the digitalization of the insurance process. Based on the type of services, the global digital insurance platform market comprises of managed services and professional segments.
Based on the type of deployment, it consists of on-premises and cloud. Based on the size of the organization, this market consists of large, small, and medium scale business entities.
As the end-users of the global digital insurance platform market is considered, it consists of insurance companies, third-party administrators, and aggregators.
Market Overview
The market size of the global digital insurance platform market is valued at USD 98 billion in the year 2019 and is expected to reach USD 111.43 billion in the year 2020. Its market value is expected to grow at a CAGR of 13.7% within the forecasted time horizon of 2020-2025.
Its market value is expected to reach USD 211.75 billion by the end of the year 2025. Based on geography, the North American region is leading the market with market size of almost 35% of the global digital insurance platform market. The market size of this region is valued at USD 34.3 billion in the year 2019.
Based on the type of services, the managed services segment is leading the market with market size of almost 68.4% of the global digital insurance platform market. The market size of this region is valued at USD 67.03 billion in the year 2019.
Based on the type of deployment, the cloud-based deployment segment is leading the market with market size of almost 59.1% of the global digital insurance platform market. The market size of this region is valued at USD 57.92 billion in the year 2019.
Based on the size of the organization, the large enterprises’ segment is leading the market with market size of almost 67.3% of the global digital insurance platform market. The market size of this region is valued at USD 65.96 billion in the year 2019.
Based on the type of end-users, the third-party administrators segment is leading the market with market size of almost 46.5% of the global digital insurance platform market. The market size of this region is valued at USD 45.57 billion in the year 2019.
Rising use of Internet of things technologies, increasing adoption of digital platforms, growing insurance industry, and rising application of cloud computing technology are the factors driving the growth and development of the global digital insurance platform market.
However, the risk of cyber-attacks and low global penetration in the insurance industry might restrain the growth and development of the global digital insurance platform market. The key market players engaged in the global digital insurance platform market are Accenture, TCS, IBM, DXC Technology, SAP, Oracle, Microsoft, Infosys, Pegasystems, Appian, Prima Solutions, etc.
Market Risks
- Risk of cyberattack
Globally, the number of cyberattacks in the insurance sector is in increasing trend. The proportion of the business entities affected by the cyberattack has been increased from 41% in the year 2018 to 61% in the year 2019.
On average, the constant rate of hacker attacks of computers is about 39 seconds and almost 43% of the cyber attacks target small business entities. The global average cost of the data breach is about USD 3.9 million in the small and medium scale business entities.
In the year 2019, more than 15 billion records were exposed in the data breaches and about 8.4 million distributed denial of service attacks have occurred. Almost 16 attacks occurred in every minute in the year 2019.
The trend of cybercrimes has even increased to a more extent after the pandemic outbreak of COVID-19 disease. According to the US FBI, it has been estimated that cybercrimes have been increased by almost 300% after its pandemic outbreak.
The insurance sector has the risk of cyber attacks from the internal, external, and third parties sources as the insurance companies are connected to the multiple channels of financial institutions. The increasing trend of cyber-attacks will create the risk for the growth and development of the global digital insurance platform market.
Top Market Opportunities
- Rising use of Internet of things technologies
Globally, the number of business entities using the Internet of Things technologies is in increasing trend. The number of IoT technologies has been increased from 13% in the year 2014 to 25% in the year 2019.
There are almost 7.6 billion active IoT devices in 2019. The number of IoT-connected devices is expected to reach 43 billion by the end of the year 2023. The market size of the global IoT technologies is valued at USD 690 billion in the year 2019.
Its market value is expected to grow at a CAGR of 10.53% within the forecasted time horizon of 2020-2025. Its market value is expected to reach USD 1256.1 billion by the end of the year 2025.
The growing adoption and demand of the Internet of things technologies will create a significant opportunity for the growth and development of the global digital insurance platform market.
- Increasing adoption of digital platforms
The use of the digital platform in the insurance sector is increasing globally. According to the BCG survey, it is estimated that almost 75% of the insurance purchase decisions will be made through digital channels. Along with this, the customers are also willing to use digital platforms to buy insurance policies.
A study conducted by Pramod Niraula and Sandeep Kautish has revealed that almost 82% of the study participants from the group of insurance customers are willing to use the digital platform to buy the insurance policies.
The increasing use of the digital platforms and willingness of the consumers to use the digital platforms in the insurance sector is creating a significant opportunity for the growth and development of the global digital insurance platform market.
Market Trends
The factors driving the growth and development of the global digital insurance platform market are the rising number of the insurance holders, growing insurance industry, increasing utilization of cloud computing technologies, elimination of fraudulence & mis-selling of insurance, and rise in the shift of insurers from product-based strategies to customer-centric strategies. The major driving factors of this market are discussed as follows:
- Growing insurance industry
Globally, the market size of the insurance industry is an increasing trend. Here, the global insurance industry is expected to grow at a CAGR of 6% within the forecasted time horizon of 2020-2025. The market size of the global insurance industry is valued at USD 5939.5 billion in the year 2019 and is expected to reach USD 6840.7 billion by the year 2023.
Along with this, the insurance analytics market is expected to grow at a CAGR of 12.6% within the forecasted time horizon of 2020-2025. The market size of the global insurance analytics market is valued at USD 7.6 billion in the year 2019 and is expected to reach USD 8.3 billion by the end of the year 2025.
The growing insurance industry will drive the growth and development of the global digital insurance platform industry.
- Rising application of cloud computing technology
Globally, the adoption of cloud computing technology is in increasing trend. The market for global cloud computing technologies is expected to grow at a CAGR of 14.9% within the forecasted time horizon of 2020-2025.
The market size of the global digital insurance platform market is valued at USD 266 billion in the year 2019 and is expected to reach USD 760.98 billion by the year 2027. Cloud computing services are widely adopted as the most potent digital transformation in the insurance industry.
According to the report published by the Gartner, it has been estimated that about 90% of the business entities will adopt cloud services by the year 2022. So, the growing cloud computing technologies and services will drive the growth and development of the global digital insurance platform market.
- Low customer penetration in the insurance industry
In the global context, the penetration of the customer in the insurance sector is quite low and is even decreasing. The global life and non-life insurance penetration rate is about 6.09% in the year 2018, which decreased from 6.3% in the year 2016.
Most of the developed nations have also low insurance penetration rates. For instance, the penetration of life and non-life insurance is about 7.14%, 7.48%, 10.61%, and 6.03% respectively in the Context of the United States, Canada, United Kingdom, and Germany.
The limited penetration of the customers in the insurance industry will negatively influence the demand in the insurance industry, which will create a significant restrain the growth and development of the global digital insurance platform market.
Industry Challenges
- Limited workforce skilled in advanced digital technology
Globally, the employees with skills in digital technology are quite limited and most of them require reskilling due to dynamic advancement in the technology sector. For instance, The European Commission has expected that there will be almost 756,000 unfilled jobs in the information communication technology sector in the year 2020 in the context of Europe.
It has also stated that almost 37% of the employees in Europe don’t have basic digital skills. Along with this, the World Economic Forum has also estimated that almost 54% of the employees all over the world require reskilling by the year 2022.
So, it is quite challenging for the market players to develop advanced digital insurance platforms with a limited number of the workforce skilled in digital technology.
Technology Trends
The advanced technological changes in the insurance platform industry are driving the growth and development of the global digital insurance platform market. Some of the key technological changes in this market are discussed as follows:
Artificial intelligence: In the insurance industry, artificial intelligence technology is adopted to improve the claims cycle efficiently within a short period. Along with this, it assists to enhance the operational efficiency and the customer experience in digital insurance platforms.
Chatbots: This technology is used to assists in intelligent communication with the customers to solve the faced problems, filing claims, policy application, and other processes associated with the insurance.
Blockchain technology: This technology allows the secure storage and access of the independent and permanent database existing in multiple locations and shared by the community to improve the availability and integrity of the information.
Regulatory Trends
Some of the key regulatory trends directly or indirectly related to the global digital insurance platform market are discussed as follows:
Packaged Retail and Insurance-based Investment Products Regulations: It was developed in the year 2018 to improve investor protection standards for retail clients. According to it, the pre-contractual key information document should be provided to the retail investors free of charge.
Insurance Distribution Directive: It is developed by the European Union to design and sell insurance products. It helps to enhance consumer protection and assist the competition between insurance distributors.
Health Insurance Regulations: It was developed by the Insurance Regulatory and Development Authority of India in the year 2016. It states that all the policy and claim records including electronic form records should have adequate security features.
Market Size and Forecast
The market size of the global digital insurance platform market is valued at USD 98 billion in the year 2019 and is expected to reach USD 111.43 billion in the year 2020.
Its market value is expected to grow at a CAGR of 13.7% within the forecasted time horizon of 2020-2025. Its market value is expected to reach USD 211.75 billion by the end of the year 2025.
Based on the geography
- The North American region is leading the market with market size of almost 35% of the global digital insurance platform market. The market size of this region is valued at USD 34.3 billion in the year 2019.
- The European region accounts for a market share of almost 20% of the total global digital platform market. The market size of this region is valued at USD 19.6 billion in the year 2019.
- The APAC region accounts for a market share of almost 30% of the total global digital platform market. The market size of this region is valued at USD 29.4 billion in the year 2019.
- ROW stands for the rest of the world, which includes South America, the Middle East, and the African region. This segment accounts for a market share of almost 15% of the global digital insurance platform market. The market size of this segment is valued at USD 14.7 billion in the year 2019.
Based on the type of services
- The managed services segment is leading the market with market size of almost 68.4% of the global digital insurance platform market. The market size of this region is valued at USD 67.03 billion in the year 2019.
- The professional services segment accounts for a market share of almost 31.6% of the total global digital insurance platform market. The market size of this segment is valued at USD 30.97 billion in the year 2019.
Based on the type of deployment
- The cloud-based deployment segment is leading the market with a market share of almost 59.1% of the global digital insurance platform market. The market size of this region is valued at USD 57.92 billion in the year 2019.
- The on-premises deployment segment accounts for a market share of almost 40.9% of the global digital insurance platform market. The market size of this region is valued at USD 40.9 billion in the year 2019.
Based on the size of the organization
- The large enterprises’ segment is leading the market with market size of almost 67.3% of the global digital insurance platform market. The market size of this region is valued at USD 65.96 billion in the year 2019.
- The Small and Medium-scale enterprises segment accounts for a market share of almost 32.7% of the total global digital insurance platform market. The market size of this segment is valued at USD 32.04 billion in the year 2019.
Based on the type of end-users
- The third-party administrators segment is leading the market with market size of almost 46.5% of the global digital insurance platform market. The market size of this region is valued at USD 45.57 billion in the year 2019.
- The aggregators segment accounts for a market share of almost 31.27% of the total global digital insurance platform market. The market size of this segment is valued at USD 30.65 billion in the year 2019.
- The insurance companies segment accounts for a market share of almost 22.22% of the global digital insurance platform market. The market size of this segment is valued at USD 21.77 billion in the year 2019.
Market Outlook
The global digital insurance platform market is expected to grow at the CAGR of 13.7% within the forecasted period of 2020-2025 because of the rising use of Internet of things technologies, increasing adoption of digital platforms, the growing insurance industry, and rising application of cloud computing technology.
Its market value will reach USD 211.75 billion by the year 2025.
Technology Roadmap
The use of artificial intelligence and robotic insurance processing technology is enhancing the efficiency and effectiveness of the digital insurance processing system.
Blockchain technology is enhancing the security of the personal data of the individuals’ insureds and other valuable information.
These technological trends adopted in the global digital insurance platform market are driving the growth and development of its market.
Distribution Chain Analysis
The key stakeholders involved in the operation of this global digital insurance platform market are insurance companies, software developers, distribution channels, and end-users.
Here, the platform for digital insurance is developed by the software and technology development companies and supply it to the insurance companies. The major end-users of these digital insurance platforms are insurance companies, third-party administrators, and aggregators.
Competitive Landscape
The key market players engaged in the global digital insurance platform market are TCS, Accenture, Microsoft, Cognizant, IBM, DXC Technology, SAP, Oracle, etc.
Here, the Accenture is leading the market with a market share of almost 17.5% of the global digital insurance platform market. It is followed by TCS (16.38%), IBM (16.11%), Cognizant (14.72%), Microsoft (13.88%), and others (21.38%).
Competitive Factors
The key market players engaged in this global digital insurance platform market are focused on the expansions, agreements, joint ventures, partnerships, and acquisitions with other business entities.
Along with this, they are also focused on the launch of the new product related to digital insurance platforms.
Key Market Players
Short profile of the key market players engaged in the global digital insurance platform market is discussed as follows:
Tata Consultancy Services: It is the second-largest information technology services and consulting company operating in almost 46 countries with its headquarter in Mumbai, India. The revenue of this company is valued at USD 23 billion in the year 2019.
International Business Machine Corporation: It is the US-based multinational technology company providing its services in more than 170 countries. It is engaged in the sector of cloud computing, artificial intelligence, computer hardware, and computer software. The revenue of this company is valued at USD 77.14 billion in the year 2019.
DXC Technology: It is the US-based multinational company engaged in the sector of information technology outsourcing, consulting, and managed services. The revenue of this company is valued at USD 20.75 billion in the year 2019.
SAP: It is the multinational software company operating in almost 180 countries with its headquarter in Walldorf, Germany. The revenue of this company is valued at USD 32.43 billion in the year 2019.
Oracle: It is the US-based company engaged in the sector of enterprise software, cloud computing, and computer hardware. The revenue of this company is valued at USD 39.5 billion in the year 2019.
Microsoft: It is the US-based multinational company engaged in the sector of software development, computer hardware, consumer electronics, social networking services, cloud computing, video games, internet, and corporate venture capital. The revenue of this company is valued at USD 143 billion in the year 2020.
Infosys: It is the Indian company engaged in the provision of IT services, outsourcing, consulting, and managed services. The revenue of this company is valued at USD 13 billion in the year 2019.
Strategic Conclusion
The global digital insurance platform market is growing at the rate of 13.7% because of the rising use of Internet of things technologies, increasing adoption of digital platforms, the growing insurance industry, and rising application of cloud computing technology.
However, the risk of cyber-attacks and low global penetration in the insurance industry might restrain the growth and development of the global digital insurance platform market.
References
- https://busy.org/@rushikesh-wadkar/global-digital-insurance-platform-market-industry-analysis-size-share-growth-trends-and-forecast-2018-2023
- https://www.transparencymarketresearch.com/digital-insurance-platform-market.html
- https://3wnews.org/news/620471/digital-insurance-platform-market-competitive-dynamics-global-outlook-2025/
- https://www.reportsanddata.com/report-detail/digital-insurance-platform-market
- https://www.openpr.com/news/1983726/high-cagr-digital-insurance-platform-market-overview-top
- https://www.maximizemarketresearch.com/market-report/digital-insurance-platform-market/11893/
- https://www.researchandmarkets.com/reports/4581104/digital-insurance-platform-market-by-component
- https://www.alliedmarketresearch.com/digital-insurance-platform-market
- https://www.marketsandmarkets.com/Market-Reports/digital-insurance-platform-market-144303624.html
- https://www.verifiedmarketresearch.com/product/digital-insurance-platform-market/
- https://www.databridgemarketresearch.com/reports/global-digital-insurance-platform-market
- https://medium.com/@kennethresearch.seo/digital-insurance-platform-market-by-key-players-deployment-type-applications-vertical-and-df9761db2565
- https://www.forencisresearch.com/digital-insurance-platform-market/
- https://www.prnewswire.com/news-releases/global-digital-insurance-platform-market-forecast-to-2023-rise-in-the-shift-of-insurers-focus-from-product-based-strategies-to-customer-centric-strategies-300765649.html#:~:text=Digital%20insurance%20platforms%20empower%20insurers,%2Dto%2Dcompose%20customer%20experience.
- https://www.cybintsolutions.com/cyber-security-facts-stats/
- https://www.securitymagazine.com/articles/90483-cybersecurity-firms-see-increase-in-cyber-attacks
- https://securityboulevard.com/2020/05/the-definitive-cyber-security-statistics-guide-for-2020/
- https://www.mckinsey.com/industries/private-equity-and-principal-investors/our-insights/growing-opportunities-in-the-internet-of-things#:~:text=The%20number%20of%20businesses%20that,almost%20threefold%20increase%20from%202018.
- https://www.globenewswire.com/news-release/2020/05/13/2033070/0/en/The-global-IoT-market-is-expected-to-reach-a-value-of-USD-1256-1-billion-by-2025-from-USD-690-billion-in-2019-at-a-CAGR-of-10-53-during-the-period-2020-2025.html
- https://www.businesswire.com/news/home/20200522005209/en/Global-Insurance-Market-Report-2020-2030–
- http://www.businessworld.in/article/Digitization-Picks-Up-The-Pace-In-Insurance/27-04-2019-169614/
- https://www.researchgate.net/publication/337030063_Study_of_The_Digital_Transformation_Adoption_in_The_Insurance_Sector_of_Nepal
- https://www.globenewswire.com/news-release/2020/06/25/2053190/0/en/Global-insurance-analytics-market-is-expected-to-grow-with-a-CAGR-of-12-27-over-the-forecast-period-from-2020-2026.html#:~:text=The%20report%20predicts%20the%20global,with%20a%20CAGR%20of%2012.&text=27%25%20over%20the%20forecast%20period,period%20of%202018%20to%202026.
- https://www.grandviewresearch.com/industry-analysis/insurance-analytics-market
- https://www.businesswire.com/news/home/20200228005189/en/Global-Insurance-Analytics-Market-Analysis-Trends-Forecasts
- https://www.doxee.com/blog/technology/impact-cloud-computing-insurance-industry/
- https://www.grandviewresearch.com/industry-analysis/cloud-computing-industry
- https://www.prnewswire.com/news-releases/cloud-computing-market-to-hit-usd-760-98-billion-by-2027-rising-demand-for-improved-virtual-access-to-information-among-industries-to-foster-steady-growth-fortune-business-insights-301050305.html
- https://www.statista.com/statistics/381174/insurance-penetration-in-selected-countries-worldwide/
- https://www.ey.com/Publication/vwLUAssets/ey-global-insurance-trends-analysis-2018/$File/ey-global-insurance-trends-analysis-2018.pdf
- https://www.weforum.org/agenda/2019/03/the-digital-skills-gap-is-widening-fast-heres-how-to-bridge-it/
- https://www.forbes.com/sites/forbesbusinessdevelopmentcouncil/2020/04/10/five-technology-trends-in-the-insurance-industry/#462a0fb470c5
- https://www.geospatialworld.net/blogs/the-top-5-technologies-impacting-the-insurance-industry/
- https://www.insuranceeurope.eu/sites/default/files/attachments/Examples%20of%20regulatory%20obstacles%20to%20digital%20innovation%20insurance%20industry.pdf
- https://www.hsbcprivatebank.com/en/about-us/priips#:~:text=is%20a%20PRIIP%3F-,From%201%20January%202018%20the%20Packaged%20Retail%20and%20Insurance%2Dbased,protection%20standards%20for%20retail%20clients.
- https://www.fca.org.uk/firms/insurance-distribution-directive
- https://www.entrepreneur.com/article/347212
- https://en.wikipedia.org/wiki/Tata_Consultancy_Services
- https://en.wikipedia.org/wiki/IBM
- https://en.wikipedia.org/wiki/DXC_Technology
- https://en.wikipedia.org/wiki/SAP
- https://en.wikipedia.org/wiki/Oracle_Corporation
- https://en.wikipedia.org/wiki/Microsoft
- https://en.wikipedia.org/wiki/Infosys
Appendix
- IT= Information Technology
- SMEs= Small, and Medium scale
- IoT= Internet of Things
- USD= United States Dollar
- CAGR= Compound Annual Growth Rate
