The global InsurTech market grew to 25.97bn in 2024 and is expected to reach approximately USD 496.56bn by 2033. This represents a remarkable compound annual growth rate (CAGR) of 38.8% from 2024 to 2033. This rapid expansion is being driven by innovations in artificial intelligence (AI), machine learning (ML), cybersecurity, and a growing emphasis on Environmental, Social, and Governance (ESG) practices.
These innovations are not only reshaping the operational landscape but are also paving the way for smarter, more personalised insurance experiences, improving both efficiency and customer satisfaction across the sector.
FinTech Global‘s Harry Slade sat down with a host of InsurTech industry experts to discuss the key trends that have underpinned the aforementioned sectoral growth.
AI and Machine Learning: The game-changers in 2024
AI and ML have become integral components of the insurance industry, fundamentally transforming key areas such as underwriting, claims processing, and customer engagement.
In 2024, these technologies have enabled insurers to harness vast amounts of data, providing faster and more accurate decision-making capabilities.
As the sector increasingly adopts these tools, AI’s potential to streamline operations and personalise services continues to grow.
AI’s role in underwriting has been especially significant. By analysing a broader range of data points—such as financial histories, adverse director records, and even group structures—underwriters are able to offer highly tailored policies that better reflect individual risks.
Ashleigh Gwilliam, Director of Insurance Industry Growth at FullCircl, explained, “AI and ML has enabled more granular risk assessment by absorbing and analysing vast data sources, with greater access to information surrounding traditional material facts, such as adverse Director History, CCJs, Financials and group structures, underwriters can make better decisions on customer risk, providing bespoke premiums and terms.”
Brokers are leveraging this wealth of data to refine their client engagement strategies, enabling them to identify shifts in risk and exposure.
This proactive approach allows them to offer tailored solutions that mitigate potential financial risks for their clients, ensuring that their coverage evolves alongside changing circumstances.
By adopting this data-driven strategy, brokers are not only enhancing customer satisfaction but also adhering to the new Consumer Duty Principles, which emphasise the duty of care and fairness in serving clients’ best interests.
But these advancements extend beyond underwriting into claims processing, where automation has drastically improved both speed and accuracy. Claims are now being processed faster, with fewer errors, thanks to the power of AI.
According to Efrat Marmur, VP Marketing at Air Doctor, “For claims, automation has significantly reduced manual workload and shortened processing times, overall improving transparency. While on some level, customer engagement has also been enhanced through the use of things like chatbots and AI-driven recommendations, which provide personalised support and insights.
“Even the Air Doctor app’s algorithm uses AI to help match and personalise doctor recommendations according to each user’s needs and preferences,” she said.
In this vein, AI-powered chatbots and virtual assistants are becoming the norm, enabling insurers to offer personalised, 24/7 support to customers.
These tools are not only improving the customer experience but also create greater efficiencies for insurers.
Aaron Wright, Director of Strategy for Earnix, explained, “AI has begun to transform the insurance landscape in 2024, but it is primed for a much larger impact. A recent global insurance survey showed that AI had an 8% impact on operations decisions, such as price determination, underwriting risk selection, fraud detection, and claims payments. This was twice the impact that was reported the previous year, but only one-third of the expected impact in the following year. Additionally, over two-thirds (70%) of insurers plan to deploy AI models that utilise real-time data for predictions within the next two years. This shift is expected to enhance decision-making processes, improve operational efficiency, and foster better customer interactions.”
Adding to this narrative, Large Language Models (LLMs) have reshaped the customer landscape. These advanced AI systems are revolutionising communication between insurers and their customers by enabling smarter, more structured, and consumer-focused interactions.
Peter Ohnemus, CEO of dacadoo, a Swiss-based Digital Health Technology Platform, opened up on the impact of LLM’s, labelling it one of the “most significant InsurTech innovations that we have seen in 2024.”
LLMs, powered by deep learning, excel at understanding and generating natural language, making processes like onboarding and customer support more intuitive and efficient.
“The whole area around LLM and smart structured communication where voice is getting better and the overall onboarding and communication with your insurance is becoming more structured, simple and consumer focused,” said Ohnemus.
AI is also transforming the way insurers interact with customers by enhancing personalisation.
Through machine learning, insurers are able to track and respond to evolving customer needs, delivering tailored recommendations, proactive outreach, and a more seamless experience.
As FullCircl’s Gwilliam commented, “Personalisation of insurance policies are becoming more common through the use of data and automation, allowing insurers to offer tailored policies and proactive outreach; this combined with the growing number of distribution channels is providing a more digitised, streamlined experience, aligned with the preferences of younger generations.”
Embedded insurance: A seamless, on-demand future
Throughout the past 12 months, embedded insurance has taken significant strides, making it easier for customers to obtain coverage right at the point of need.
From travel apps and healthcare platforms to retail checkouts, insurers are integrating policies into services consumers already use, creating a seamless experience.
This shift is revolutionising how insurance is purchased, driving wider adoption and enhancing the overall customer journey.
The rise of embedded insurance is reshaping the traditional distribution model, extending beyond conventional sales channels and tapping into digital platforms.
Air Doctor’s Marmur, observed, “Embedded insurance has advanced rapidly, particularly through partnerships with digital platforms outside traditional insurance, like Air Doctor. These pathways encourage policyholders to seamlessly add coverage, such as travel insurance or medical support, through apps they already use.”
This evolution is not just about convenience—it’s about meeting the growing demand for speed and accessibility. Consumers can now easily purchase travel or health insurance while booking a flight or seeking healthcare services, simplifying the process and aligning with the shift toward on-demand, digital-first solutions.
This sentiment is poised to gain even more momentum in the coming years. According to a 2024 survey from FinTech firm Adacta, an overwhelming 94% of respondents identified embedded insurance as a critical component of their future strategies.
ESG’s growing role: A sustainable future
ESG considerations are increasingly shaping the trajectory of InsurTech, with 2024 seeing a marked shift toward responsible and sustainable practices across the industry.
According to a PwC report, a quarter of global insurers have identified “understanding ESG-related regulations and guidelines” as the primary obstacle to advancing their ESG agendas.
Yet, responding to these demands is no longer optional—76% of customers now say they would sever ties with companies that fail to treat the environment, customers, employees, and the community responsibly. Reflecting this pressure, 36% of insurers admit that customer expectations are their primary motivator for pursuing ESG initiatives.
This focus has pushed insurers to adopt more sustainable approaches, such as digital-first initiatives, like paperless processes and virtual consultations, which are reducing the industry’s carbon footprint.
“It’s great to see companies developing eco-friendly policies, like digital-first approaches that reduce waste and encourage telecommunication over physical travel,” said Air Doctor’s Marmur.
“The Air Doctor app is great at this, since our users can schedule video consults instead of visiting local clinics. In addition, our 20K+ strong network is made up of trusted, local doctors – directly helping more local doctors see foreign patients,” she continued.
These efforts reflect a broader commitment to sustainability, as insurers strive to align their operations with global environmental goals.
The social aspect of ESG has underscored the importance of building resilience in critical sectors. In the context of cyber insurance, this means prioritising tools and solutions that bolster the security of essential services.
“The ‘S’ in ESG has fuelled the need for effective cyber risk management solutions that can help bolster organisational cyber resilience, especially in sectors critical to societal functioning,” says Melanie Hayes, founder of KYND.
By delivering actionable cyber risk intelligence, InsurTech companies are enhancing organisational resilience and fostering a more secure digital ecosystem.
Governance, meanwhile, is driving a focus on data privacy and regulatory compliance. With the rise of stricter global regulations—such as the EU’s Digital Operational Resilience Act (DORA) and updated SEC rules—InsurTechs are adopting advanced encryption and monitoring systems to safeguard customer data.
Hayes remarked, “There is a rising emphasis on protecting customer data. With tighter privacy and cyber security regulations worldwide (such as the EU-wide Digital Operational Resilience Act (DORA) and the Network Information Systems (NIS) directives or the updated SEC rules affecting US companies), InsurTechs are developing more robust, privacy-focused solutions that support compliant data handling, particularly in cyber underwriting and daily portfolio management processes.
These ESG initiatives are not merely a response to market demands—they reflect a foundational shift in the industry’s values.
“The shift towards ESG isn’t just a trend but a core expectation from many modern customers who want responsible, community-conscious companies,” Marmur notes.
The road ahead
As we reflect on 2024, it’s clear that the InsurTech sector is on course to receive a boon from the technological advancements that are reshaping the financial services sector. Long gone are the days where insurers where referred to as lackadaisical, or negligent to change.
As the sector continues to evolve, several areas of technological advancement signal exciting possibilities for the future.
Cloud-native ecosystems are poised to transform the industry by enabling real-time decision-making through advanced AI capabilities.
These platforms could help insurers streamline underwriting, claims, and risk management while fostering seamless collaboration with ecosystem partners, including startups and non-traditional players. This modular, customer-centric approach has the potential to redefine how insurance is delivered at scale.
The rise of agentic AI opens up further prospects for proactive risk management and customer interaction.
dacadoo’s Ohnemus explained, “We should not underestimate the importance of the agentic AI, which will probably create great new ways for insurances to become more relevant, easy, and fun to deal with. We are seeing leading organisations working on a deep transformation on digital health engagement and Lifestyle Navigation using Generative AI in the right secure way in a “closed & controlled” AI world will drive a lot of new market penetration and consumer focus.
These innovations hint at a future where personalised and responsive service becomes a hallmark of the industry.
While these developments remain on the horizon, the progress made in 2024 suggests a strong foundation for continued innovation. The coming years hold immense potential for the industry to expand its capabilities, delivering smarter, more efficient, and customer-focused solutions.
