The insurance services category is expected to grow at a CAGR of 9.0% from 2023 to 2030. Changing economic conditions, consumer behavior, climate change and disasters, and regulatory frameworks are driving the growth of the category. Consumers are increasingly seeking convenience, customization, and transparency in insurance products. This has led to the rise of InsurTech companies that cater to these preferences. The increasing frequency and severity of natural disasters due to climate change have a direct impact on the insurance sector, particularly property and casualty cover. Insurers are adjusting their pricing and underwriting models in response to these risks.
Advancements in technology, such as data analytics, artificial intelligence, the Internet of Things, and blockchain, are transforming the insurance industry. These technologies enable insurers to better assess risk, streamline operations, and offer more personalized products and services. Data analytics opens up fresh possibilities, enabling insurers to enhance all aspects of the insurance value chain through data-informed decision-making. Additionally, it can assess customer risk, distinguishing reliable clients from those who may cause loss.
IoT devices enable insurers to enhance the efficiency of their insured policies by providing real-time monitoring. IoT development serves as a key IT solution within the insurance industry, facilitating various benefits such as improved customer experiences and the detection of fraudulent claims. The widespread adoption of IoT in the business sector is driven by its ability to minimize human errors, decrease the frequency of claims, and lower insurance loss rates.
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The recent statistics in the category include:
• According to Marsh McLennan report, global commercial insurance pricing went up by 3% in the second quarter of 2023 as compared to the previous year.
• Cyber insurance pricing increased by 1% as compared to the prior quarter.
• According to Allianz Global Insurance 2023 report, global insurance premium income amounted to around USD 5.91 trillion in 2022.
Standardized platforms for sharing information facilitate efficient management of insurance claims across different regions, allowing for centralized file storage. The digital transformation of records enables the simplification of reports, aiding in the categorization of risks. It also promotes the integration of insurance services among entities that historically had limited interaction.
Contemporary technological advancements enable the development of an integrated information hub, allowing insurers, policyholders, and vendors to connect for data sharing and business transactions. Such a unified platform would streamline transactions by reducing the number of involved parties, thereby cutting administrative expenses, and simplifying enterprise-level data management.
Insurance Services Sourcing Intelligence Highlights
• Insurance consumers have access to a wide range of options, creating a competitive environment that can drive down premiums and increase customer bargaining power. Buyers can easily access information about cover policies and pricing online, which empowers them to make informed decisions.
• The category is fragmented as corporate clients often have several insurance service providers to choose from. They can negotiate on pricing, types of cover offered, customization availability, claim-processing time, and others.
• Labor costs, IT costs, taxes & fees, utilities, rent, and others are some of the costs incurred in providing services.
• General and administrative costs, which generally include taxes, fees, and other legal charges, account for 30% of the operating cost. Taxes and legal charges may vary based on the location.
List of Key Suppliers
• Allianz
• Manulife
• Cigna
• Humana
• AXA Insurance Company
• MetLife
• Zurich Insurance Company
• State Farm
• Nippon Life Insurance Company
• Generali Group
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Insurance Services Procurement Intelligence Report Scope
• Insurance Services Category Growth Rate: CAGR of 9.0% from 2023 to 2030
• Pricing Growth Outlook: 2% - 3% (Annually)
• Pricing Models: Insurance type-based pricing, service-based pricing, competition-based pricing
• Supplier Selection Scope: Types of insurance, coverage options, end-to-end service, customization, cost and pricing, compliance, service reliability, and scalability
• Supplier Selection Criteria: Types of insurance offered, policyholder information transparency, claims handled by the supplier, claim processing time, coverage options offered, global reach, customization option, services offered, track record and reputation, regulatory compliance, and others
• Report Coverage: Revenue forecast, supplier ranking, supplier positioning matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model