AIMultiple ResearchAIMultiple Research

In-depth Guide to Insurtech in 2024: Trends & Technologies

Cem Dilmegani
Updated on Jan 12
4 min read

The insurance industry is based on risk pricing. Insurtech aims to mitigate challenges in the pricing of risk such as lack of available data and inadequacy of manual data analysis. As a result of these operational risks, insurance companies faced financial difficulties or charged higher premiums.

Thanks to the advances in technologies like AI/ML and IoT, insurance companies can better manage their risk exposure and improve operations. Insurtech companies either supply tech solutions to incumbents or offer insurance services directly to consumers.

What is insurtech?

Insurtech means using emerging technology in the insurance industry. This is mostly by

  • replacing manual processes leading to more efficient operations
  • achieving better risk assessment
  • providing better customer service leading to higher customer satisfaction

It is possible to divide Insurtech companies into two categories: D2C and B2B.


Thanks to improved data collection, data analytics capabilities, and consumer-friendly apps, new insurance companies don’t need middlemen like brokers and agents to find their customers. These companies sell their services directly to B2B or B2C end users competing for market share with traditional insurance companies that rely on traditional distribution channels like brokers.


Insurtech firms provide services to improve the insurance practices of incumbents selling products like Property & Casualty (P&C) or health insurance to individuals or businesses.

Are all insurance companies insurtech companies?

Due to the transformative impact of insurtech on insurance, all insurance companies are starting to adopt the term. Just as fintech practices have forced financial services incumbents like Goldman Sachs to call themselves technology companies, we may soon see a similar pattern in the insurance industry.

What is the level of interest in insurtech?

Insurtech market which was almost non-existent as a term before 2015, has grown steadily. It is expected to grow with almost ~50% CAGR until 2028. Though data is noisy, pandemic may have accelerated the growth of insurtech as it forced companies to reduce office work.

Interest in insurtech as a term started in 2015 and as seen by the Google Trends chart, interest increased rapidly until 2019 and has stayed relatively stable since then.

Source: Google Trends

According to a PWC report on the insurance sector, 94% of industry leaders are looking for ways to improve risk assessment and customer engagement. The market size of insurtech has grown rapidly in recent years. In the U.S., for example, the insurtech market was/is expected to be

  • 2016: $0.25 bn
  • 2028: ~$60 billion thanks to an expected average annual rate of 48% between 2021 and 2028

Source: Grand View Research

The global Covid-19 pandemic is forcing companies to minimize office work. As a result, many industries are adopting innovations and technologies at a faster rate. Global insurtech investments

  • increased by more than 12% in the second quarter of 2020, despite the significant global economic slowdown
  • rebounded quickly after initial months of Covid-19 outbreak in the US.

Source: Deloitte

What are the key technologies in insurtech?

AI and ML

Thanks to AI/ML-backed smart automation systems, insurtech companies can collect and interpret consumer data and determine risk more accurately compared to manual data interpretation.

Conversational AI / Chatbots

Conversational AI is a tool that enables insurance companies to communicate with their customers via chatbots.

Some of the customer inquiries or claims processing can be managed by NLP-driven chatbots.

  • Efficiency for insurance companies by allowing them to use their staff for tasks that add more value.
  • Customer satisfaction by immediate responses.


The internet of things (IoT) connects smart devices such as smart homes, smartphones, smartwatches, self-driving vehicles, etc. Such an ecosystem produces valuable data for insurance companies enabling data-driven decisions and more effective solutions.


Blockchain technology and specifically smart contracts have the potential to

  • Simplify contract negotiations.
  • Automate execution of complex insurance contracts.
  • Reduce insurance fraud.

Digital twins

Thanks to digital twins, it is possible to simulate the losses from situations that have not yet occurred but could, such as car accidents, natural disasters, etc. This allows insurers to better assess the risk.

For more on key technologies, you can check our article on top insurtech trends & technologies.

How does insurtech affect specific insurance processes?


Technologies such as effective data collection, computing, document processing, IoT, and natural language processing (NLP) enable insurtech companies to interpret more complex and large data sets in short periods. This results in a more accurate and faster risk assessment.

Effective risk assessment allows insurance companies to set lower premiums, which they may return as greater profits, as policyholders see the best price as the most important thing when buying a policy.

For more, you can check our article on AI and underwriting.

Claims processing

The speed of response is critical for insurance firms after customers make a claim. No one wants to wait for payment after suffering an accident. Document capture technologies assist businesses to deal with a large number of documents. Furthermore, FNOL and claims document processing helps to reduce fraudulent transactions.

For more you can check our articles on claims processing.

New insurance instruments

Thanks to new technologies, there are two types of customized insurance policies, namely peer-to-peer (P2P) and pay-as-you-go (PAYG). Both insurances offer cost-optimized insurance packages to customers thus, increasing customer satisfaction.

What are the challenges to insurtech?

Legal and regulatory restrictions are an important issue for insurtech companies directly working with consumers (D2C).

  • Insurtech companies that want to directly reach B2B or B2C customers are subject to restrictive regulations which can discourage small but innovative insurtech companies.
  • Laws vary across countries, adding to the challenges for insurtechs operating in more than one country.

An increase in investment and popularity of insurtech companies could lead to fewer regulatory restrictions. For example, McKinsey observes that regulatory hurdles to insurtech have been lowered, especially in developed countries.

Protecting data is becoming more important every day. Moreover, with more monitoring of the environment thanks to smart devices, the sources of risk are shifting from physical to cyber. Therefore, we expect to observe cybersecurity insurance to expand shortly. This might mean that classic insurance policies such as household insurance become obsolete.

AI bias is another major issue in insurance pricing, B2B insurtech companies also need to prove in certain jurisdictions that their models are not discriminatory.

Finally, the “insurance as a service” approach can be helpful for incumbents to catch up with the digitalization trend in the insurance sector. By working with insurtechs, incumbents can avoid significant IT costs thanks to their cloud/subscription-based services that facilitate underwriting, claims processing, and fraud detection. If you have more questions about insurtech, we can help:

Find the Right Vendors
Access Cem's 2 decades of B2B tech experience as a tech consultant, enterprise leader, startup entrepreneur & industry analyst. Leverage insights informing top Fortune 500 every month.
Cem Dilmegani
Principal Analyst
Follow on

Cem Dilmegani
Principal Analyst

Cem has been the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per similarWeb) including 60% of Fortune 500 every month.

Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.

Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised businesses on their enterprise software, automation, cloud, AI / ML and other technology related decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.

He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.

Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.

To stay up-to-date on B2B tech & accelerate your enterprise:

Follow on

Next to Read


Your email address will not be published. All fields are required.