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

The insurance industry is undergoing rapid digitization driven by insurtech innovations. As we enter 2023, artificial intelligence, Internet of Things (IoT), and other technologies will continue reshaping insurance products, operations, and business models. This comprehensive guide provides an in-depth look at the key insurtech trends to watch and their implications across the insurance value chain.

The Evolution of Insurtech

Insurtech refers to the use of technology innovations designed to increase efficiency, accuracy, and customer value across the insurance sector. While insurers have been leveraging technology for decades, the emergence of dedicated insurtech companies is relatively new:

2015 – The term “insurtech” gains popularity as disruptive startups like Oscar Health, Lemonade, and Metromile emerge. Investments begin accelerating.

2016 – $2.5 billion invested in insurtech startups across 200+ deals. Insurtech becomes a recognized subsector of fintech.

2017-2018 – Continued growth in funding and deals focused on AI, IoT, cloud, and other emerging technologies. Incumbents launch venture arms and innovation labs.

2019-2020 – Insurtech models evolve from early stage to more mature businesses. Expansion into new segments like small commercial insurance and cyber insurance.

2021-Present – Mainstream adoption of insurtech. M&A activity heats up as reinsurers and brokers acquire capabilities. Incumbents embrace digital transformation.

Since 2015, over $10 billion in private equity and venture capital has been invested in insurtech startups globally:

Insurtech funding and deals

Insurtech funding has accelerated over the past decade. Source

North America accounts for the majority of insurtech investments, followed by Europe. However, the Asia-Pacific region is the fastest growing insurance market globally and presents a major opportunity for insurtech expansion.

Key Insurtech Capabilities and Use Cases

Insurtech is enabling transformation across key insurance processes:

Customer Acquisition – Digital sales and marketing analytics to optimize customer targeting and conversions

Underwriting – Automated risk scoring and pricing through AI and third-party data

Policy Servicing – Chatbots and AI assistants to provide 24/7 support and self-service

Claims – Computer vision and NLP to extract insights from documents and accelerate settlements

Fraud Detection – Predictive analytics to identify patterns and prevent fraudulent claims

New Business Models – On-demand, usage-based, and peer-to-peer insurance platforms

McKinsey estimates insurtech could drive a 25-35% improvement in loss and combined ratios for insurers along with significant gains in premium growth and customer retention.

Top applications of insurtech include:

Auto Insurance – Usage-based coverage leveraging telematics and behavior data from IoT devices

Home Insurance – Risk monitoring and mitigation using data from smart home sensors

Life and Health – Wellness apps and wearables enabling personalized policies based on fitness data

Small Business Insurance – Streamlined quoting and administration through self-service portals

Cyber Insurance – Security analytics to dynamically price and tailor policies to clients

Key Insurtech Technologies and Trends

Here are some of the most impactful insurtech technologies driving innovation:

Artificial Intelligence and Machine Learning

  • According to McKinsey, 46% of insurers say implementing AI is a top priority today while 41% expect it to transform underwriting processes within 5 years.

  • AI use cases include automated underwriting, claims fraud prediction, customer chatbots, and algorithmic pricing models.

  • Top insurtech AI solution providers include Cytora, Planck, and Tractable.

Internet of Things (IoT)

  • IoT enables usage-based insurance models leveraging real-time telematics data from vehicles, wearables, and smart home devices.

  • 89% of insurers believe IoT data will enable premium personalization and improved risk monitoring per EY research.

  • Top examples include auto insurance (telematics), life insurance (wearables), and property insurance (smart home sensors).


  • 45% of insurers say blockchain can accelerate product development and generate cost savings according to Capgemini.

  • Benefits include fraud prevention, transparent claims processing, and automating complex coverage contracts.

  • Major blockchain insurance pilots underway focused on areas like parametric and smart contract coverage.

Cloud Computing

  • 72% of insurers have a multi-cloud strategy to gain agility, flexibility, and enable digital capabilities per Deloitte.

  • Key benefits include lower TCO, faster speed to market for new products, and omnichannel customer experiences.

  • Leading examples include Guidewire Cloud for P&C core systems and Duck Creek OnDemand for policy admin.

The Impact of Insurtech on Incumbents

Insurtech disruption has forced leading insurance carriers to rethink their innovation strategies. Incumbents are responding by:

  • Launching venture capital arms to invest in startups like Allianz Ventures, and Aviva Ventures

  • Acquiring capabilities through purchases like AXA’s acquisition of insurance technology firm Maestro Health

  • Building greenfield insurtechs such as Progressive’s home and auto insurer Spunk and Nationwide’s pet insurance brand VitusVet

  • Partnering with insurtechs for capabilities like Prudential partnering with Elastic to improve fraud detection with AI

  • Accelerating digitization of legacy processes including underwriting, billing, and claims

However, incumbents continue to face challenges keeping pace with insurtech including legacy IT systems, regulatory constraints, and organizational resistance to change. Agile startups are exploiting these gaps to disrupt the industry.

Key Challenges Facing Insurtech Adoption

While the opportunities are tremendous, insurtech growth faces barriers including:

  • Trust and brand perception – Overcoming customer skepticism of new digital-first insurers lacking brand recognition

  • Regulatory compliance – Navigating insurance regulations and license requirements across different states and countries

  • Cyber threats – New risks of cyber attacks and data breaches associated with expanded digital footprint

  • Legacy IT constraints – Integrating with outdated on-premise systems common at large insurers

  • Proving ROI – Quantifying direct financial impact and return on investment from insurtech initiatives

  • Organizational change – Cultivating a culture of innovation and digital-first thinking within incumbent carriers

Major Insurtech Segments and Models

While early insurtech startups focused mainly on disrupting P&C lines, innovation is now expanding across the ecosystem:

  • Life and annuity – Simplified and accelerated underwriting using predictive analytics and digital channels

  • Small business insurance – Online platforms and embedded models targeted at SMBs

  • Health insurance – Digital navigators and big data analytics to improve member engagement

  • Commercial/enterprise – Self-service portals and data-driven underwriting for commercial clients

  • Full-stack insurance – End-to-end carriers leveraging data and digital capabilities across the value chain

New models and emerging segments like cyber insurance, social insurance, and pet insurance present major opportunities for insurtechs as well.

The Global Insurtech Landscape

While still centered in North America and Europe, global expansion is accelerating:

  • Asia-Pacific is now the second largest insurtech funding region given massive underinsurance in countries like India and China

  • Major areas of investment across Asia include digital brokers, microinsurance, and embedded insurance models

  • Insurtech adoption is surging across Latin America driven by digital transformation of incumbents and favorable demographics

  • Features like usage-based products and mobile distribution are key for penetrating Africa’s underinsured consumer segment

  • Partnerships with leading carriers and technology firms are smoothing overseas expansion for insurtechs

Top Insurtech Predictions for 2024 and Beyond

Based on current adoption curves, investment trends, and emerging innovations, the future outlook for insurtech growth remains strong:

  • Incumbent legacy system modernization will accelerate as carriers seek to digitize processes, embrace cloud computing, leverage big data, and enable IoT capabilities.

  • Embedding insurance directly into third-party products and experiences will gain traction across sectors like mobility, retail, and banking.

  • More on-demand and microinsurance products will emerge covering emerging risks like cyber threats, climate change, and supply chain/trade disruptions.

  • Comprehensive full-stack digital insurers will achieve scale and become competitive forces across both personal and commercial lines.

  • Real-time usage-based coverage leveraging IoT and behavioral data will expand across health, life, auto, and P&C lines.

  • Advances in computer vision, voice, and predictive analytics will drive further automation in underwriting, claims, and fraud detection.

  • Partnerships between insurtechs and incumbents will continue growing to accelerate digital distribution and quickly expand market share.

In summary, insurtech innovation is nearing a tipping point that will deeply transform insurance throughout the value chain. By combining emerging technology with customer-centric thinking, insurtechs and forward-looking insurers have immense potential to deliver greater value to policyholders while unlocking profitable growth.