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DUBLIN–(BUSINESS WIRE)–The “US Insurance Distribution Technology Market: Analysis By Function, By Application, By Technology Type, By Size & End User Trends with COVID-19 Impact and Forecast to 2028” report has been added to ResearchAndMarkets.com offer.
The US insurance distribution market was valued at US$195.15 billion in 2022 and is expected to reach US$307.46 billion in 2028. In contrast, the US insurance distribution technology market in 2022 was valued at US$17.61 billion. The market is projected to reach US$42.71 billion by 2028.
Insurance distribution technology refers to the use of various tools, platforms and technological solutions to improve the process of selling and delivering insurance products to customers. This technology aims to improve efficiency, customer experience and overall distribution strategy in the insurance industry.
The US region offers strong growth potential in the insurance distribution technology market. Insurance technology companies have shown significant growth in automotive, homeowners and cyber insurance. Such strong growth will stimulate traditional insurance companies to acquire technological capabilities or partner with InsurTech companies.
With the increasing demand for innovative products and services from the millennial generation, such collaboration has become a necessity. Thanks to collaborations like these, traditional insurance companies will benefit from faster results in building a technology culture. The US insurance distribution market is estimated to grow at a CAGR of 7.87%. Meanwhile, the US insurance distribution technology market will grow at a CAGR of 15.91% during the forecast period 2023-2028.
Market Segmentation Analysis:
The US insurance distribution market has been analyzed based on the following applications: Property and Casualty (P&C), Health, and Life. Property and Casualty (P&C) holds the highest share in the market.
The US property and casualty (P&C) insurance distribution market is expected to experience significant growth in the coming years due to the increasing use of technology and analytics to align products and pricing with consumer preferences, increased spending on advertising P&C products, and the growing popularity of SaaS solutions.
The US insurance distribution market is bifurcated based on the following segments: Retail and Commercial. Commercial is expected to be the fastest growing segment in the forecast period. The combination of human and digital talent has driven the growth of commercial insurance distribution in the US.
Whether in the form of APIs, push notifications, portal interoperability, advanced transaction financial visualization, and self-learning/scaling models, technology is a key catalyst for improvement. Organizations that have been quickest to adapt to these evolving distribution models have experienced rapid growth and improving margins in recent years.
The report outlines the division of the US insurance distribution technology market into three segments based on function: Insurance Carrier Commission Spending; Insurance Broker Expenditures on Technology (IT Broker); and Insurance Carrier Expenditures on Advertising.
In 2022, the commission segment holds the highest share of the insurance distribution technology market. The commission segment is expected to experience high growth. The increasing penetration of digital and telesales models is expected to increase the share of broker commissions. Growth in integrated distributors is also expected to come from the automotive and individual health and Medicare markets as both have growing digital aspects.
The US advertising insurance distribution technology market can be further divided into five applications: Automotive Commercial P&C, Health, Life, Home, and SMB. The home advertising market in the US is expected to grow significantly over the forecast period, due to increasing development of back-end call centers in the home insurance market, increasing use of connected devices to simplify processes, etc.
Based on technology, the market has been segmented into six sections namely Cloud Computing, Artificial Intelligence, Block Chain, Big Data & Business Analytics, IoT, and Others.
Cloud computing holds the largest market share. This growth is expected to accelerate as cloud computing is a valuable delivery model that insurance companies can use to facilitate or accelerate business transformation. Additionally, cloud computing has had a major impact on the insurance industry, providing benefits to internal processes, new customer acquisition, and building policyholder loyalty.
The report provides segmentation of the US insurance distribution technology market based on eight end users: BFSI, Automotive, Manufacturing, Transportation, Government, Healthcare, Retail and Other.
BFSI holds the highest market share, while the healthcare segment is expected to grow at the highest CAGR during the forecast period. This growth can be attributed to the widespread use of peer-to-peer platforms and business models as well as lower insurance premium rates, leading to an increase in the number of policy makers.
US Insurance Distribution Technology Market Dynamics:
Growth Drivers
One of the most important factors influencing the dynamics of the insurance distribution technology market is the increasing use of technology and mobile applications. By using mobile app technology, insurance distributors can now easily reach their tech-savvy customers. These applications are very useful and are seen as a very valuable asset when it comes to claims.
They are able to capture and transfer data quickly, making the process hassle-free and speeding up the complete insurance-related claims process. Additionally, this market has grown over the past few years, due to factors such as surging urban population, increasing millennial population, increasing use of the internet to purchase insurance products, integration of artificial intelligence (AI) with insurance, etc.
Trends
The market is projected to grow at a rapid pace over the forecast period, owing to various recent trends such as increasing use of social media as a distribution channel, increasing trend of personalization, increasing adoption of telematics, increasing penetration of cloud-based insurance technology services. , increasing demand for digital self-service, collaboration with large technology companies, surging popularity of virtual insurance advisors, emergence of subscription models, increasing adoption of connected insurance, increasing use of blockchain in insurance, increasing popularity of gamification in the insurance industry, etc. Telematics references to devices that combine telecommunications and information technology.
With the proliferation of smartphones in the US, telematics has become a convenient method of data collection, with the ability to analyze information and compare user data, improving underwriting with greater accuracy and efficiency. Therefore, increasing the use of telematics is expected to provide greater opportunities for the IT sector by making insurance distribution more efficient and better coordinated.
COVID-19 Impact Analysis and Way Forward:
The growth of the US insurance distribution technology market has been positively impacted by the COVID-19 pandemic. The COVID-19 pandemic forced nearly all organizations to accelerate their digital transformation priorities. Regarding the insurance distribution technology industry, the most significant change has been the increased interest in more dynamic digital products during the pandemic.
These changes will result in a much greater level of personalization thereby transforming the customer experience and value proposition. In the post-COVID-19 era, insurance companies should explore technologies such as virtual reality, augmented reality, and virtual visit solutions to facilitate virtual sales and enablement of intermediaries.
Competitive Landscape:
The insurance distribution technology market in the US is fragmented, this is due to the large number of small businesses serving the needs of both the life and non-life insurance sectors.
Some of the strategies among the key players in the insurance distribution technology market are partnerships, mergers, acquisitions, and collaborations. For example, Lemonade signed an agreement in 2021 to acquire Metromile (a data science company focused on auto insurance). In fact, GoHealth has invested in various sectors such as HRTech, Employer Insurance, Employee Health IT, and many more. MediaAlpha is one of the largest digital aggregator companies in the market.
Even though companies like GoHealth, Goosehead, and Porch are integrated distributors. With the increasing preference towards technical improvements in the insurance sector, such as artificial intelligence, machine learning and blockchain technology, the number of deals being done has steadily increased over the past few years.
The ability of insurance distribution technology companies to drive innovation in the insurance industry by producing new products will help insurance companies meet the changing needs of their customers. As a result, insurance distribution technology companies are gaining traction by providing a new and diverse set of services.
Market Dynamics
Growth Drivers
Soaring Urban Population
Increasing Millennial Population
Increasing Use of the Internet to Purchase Insurance Products
Increased Use of Technology and Mobile Applications (Apps)
Integration of Artificial Intelligence (AI) with Insurance
Market trends
Increasing Use of Social Media as a Distribution Channel
The Rising Trend of Personalization
Increasing Adoption of Telematics
Increasing Penetration of Cloud-Based Insurance Technology Services
Growing Demand for Digital Self-Service
Collaboration with BigTech
The Rising Popularity of Virtual Insurance Advisors
The Rise of Subscription Models
Increasing Adoption of Connected Insurance
Increasing Use of Blockchain in Insurance
The Rising Popularity of Gamification in the Insurance Industry
Challenge
Attention to security
Infrastructure Congestion
The key players in the US insurance distribution technology market are:
GoHealth, Inc.
Brown & Brown, Inc.
Goosehead Insurance, Inc.
Home Group, Inc.
Clover Health Investments, Corp.
MediaAlpha, Inc.
Oscar Health, Inc.
Lemonade Inc.
Hippo Holdings Inc. (Hippo Insurance Services)
Roots Inc.
For more information about this report, visit https://www.researchandmarkets.com/r/sermur
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