Key growth drivers include growing urban populations and a greater use of the internet to buy insurance products. (Credit: Urupong/Adobe Stock)
The insurance distribution technology market in the United States is projected to grow to more than $50 billion by 2029, according to a new report from ResearchAndMarkets.com.
The report projects a compound annual growth rate (CAGR) of 16.4% between 2024 and 2029. In 2023, the market was valued at just $20 billion.
By contrast, the overall U.S. insurance distribution market is projected to grow at a CAGR of just 8.24% between now and 2029.
The report finds there’s strong growth potential for insurance distribution technology as insurers try to meet demand from younger generations for innovative products and services.
Key growth drivers for insurance technology include growing urban populations, greater use of the internet to buy insurance products, increasing use of insurance apps and a drive to integrate artificial intelligence with insurance.
Trends in distribution technology will likely include:
- Increasing use of social media as a distribution channel
- Growing adoption of telematics
- Collaboration with Big Tech
- Emergence of subscription models
- Increasing use of block chain in insurance
- Rising popularity of gamification
- Growing use of virtual insurance advisors
Property & casualty will likely see the strongest growth over the next few years “due to the rising use of technology and analytics to align products and pricing with consumer preferences, increasing spending on advertising P&C products and the growing popularity of SaaS solutions,” the report said.
Commercial lines will grow faster as well. “The combination of human and digital talent has driven the growth of commercial insurance distribution in the United States,” the report said. “Whether in the form of APIs, push notifications, portal interoperability, advanced visualizations of deal financials and scalable/self-learning models, tech is a key catalyst for improvement.”
The report found that cloud computing will have the biggest impact over the next several years, helping to streamline internal processes, acquire new customers and build policyholder loyalty.
Any challenges to growth will likely come in the form of security concerns and infrastructure bottlenecks, the report found.
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