Specific tech attracts insurtech investment in 2024
Global insuretech funding slid for the second year in a row, NTT Data reports. But the news is not all bad.
Global insuretech funding slipped again in 2023, notching a second straight year of declines as the industry looked for new tools in the face of a changing business models, coverage lines, and adoption trends, according to a recent NTT Data report highlighting 2024′s global insurtech outlook.
This decreased funding is not necessarily a negative signal for the insurance ecosystem and instead reflects a number of variables, according to the report.
“The insurance industry, like many others, has a concentration on the most promising businesses with the largest insurance stakes,” the report said. “Insurers’ investments are strategically directed towards key areas and current trends including embedded insurance, employee benefits, and cyber risks. This strategic approach reflects a forward-thinking industry mindset.”
The report highlighted three current insurtech trends that are driving investment: the integration of GenAI, digital process management, and connected insurance.
The insurance industry largely understands how AI-powered systems can streamline claims processes, enhance underwriting efficiency, detect, and prevent fraudulent activities, the report said, while recognizing the transformative impact on job requirements with ethical considerations.
At the same time, leveraging digital technologies in the insurance business setting can improve customer experiences and enhance operational efficiency. New products also feature an increased focus on sustainability and profitability monitoring.
The ongoing adoption of the Internet of Things (IoT) and AI for real-time data connectivity is personalizing policies and creationg a more accurate risk assessments, resulting in less fraud and a quicker response for changing circumstances, the report said.
“Public insurtech companies prioritize revenue growth as their main objective, and companies are restructuring their financial frameworks to increase cash flow,” the report said. “The growth prospects of public insurtech are fueled by rising revenue streams, expanding asset portfolios, and robust market demand.”