Global InsurTech Market to garner $160 bn by 2030 at 32.7% CAGR

Global insurtech industry was pegged at $16 billion in 2022, and is estimated to generate $160 billion by 2030, growing at a CAGR of 32.7%.

According to Allied Market Research, rise in digitalization of business models, saturation of the insurance industry, and growth and consolidation of internet technologies have boosted the growth of the global insurtech market.

Privacy & transparency concerns and changes to legal & regulatory framework hinder the market growth. On the contrary, rapid growth in incorporation of new technologies and untapped potential of emerging economies are expected to open new opportunities for the market players in the future.

By offering, the service segment would register the highest CAGR of 33.6% during the forecast period, as it processes and improves effectiveness to meet customers demand.

According to Global InsurTech Investment Trends Report, 2022 was a truly global year for InsurTech investing with 1,528 international investors participating in 521 deals, raising a total of almost $8 billion ($7.9 billion). Investors from over 60 countries participated in this very significant year.

Unsurprisingly, the US topped the charts with 238 deals, then the United Kingdom with 35 deals, France with 27 deals, India with 26 deals (and a very notably active Q3), Germany with 17 deals, Canada with 14 deals, Singapore 14 deals, China with 13 deals, and in joint 9th place Australia and Israel with 9 deals each, respectively.

2022 was the most active year for global participation with many nations recording their first ever InsurTech deal this year.

The solution segment held the largest share in 2022, accounting for more than three-fourths of the global insurtech market, due to rise in implementation of solutions by insurance companies with excellent technology capabilities to enhance business operations.

Deal count has similarly been consistent on a quarterly basis around the 140 mark. Q4 is the only outlier with a much-reduced period of activity. The consistent $2.4 billion seen previously dropped to just north of a billion, and deal count has dropped from the 140 mark to 106 (see How Insurers and InsurTechs Can Transform Insurance Platforms?)..

Given that it is quite possible that Q4 was a quarterly ‘blip’ (almost certainly caused by the lack of mega-round activity (without mega-rounds, Q3 funding did not exceed $1 billion)), and a more general rule that we shouldn’t read too much into the results of any one particular quarter, the three otherwise back to back consecutive quarters of consistent results across 2022 does provide us with a basis to draw upon some analysis (see Biggest InsurTech Unicorn Startups in the World).

Whereas venture capital historically preceded risk capital commitments, VCs are now looking to see that (re)insurers are actually going to come to the table (first in some cases) before writing a cheque. Understandably this has created a chicken and egg type situation for a number of InsurTechs looking to raise money in this environment.

By deployment model, the on-premise segment dominated the market in terms of revenue, contributing nearly three-fifths of the global insurtech market, as it offers full control over the whole infrastructure, including software & hardware.

The cloud segment is projected to register the highest CAGR of 34.5% to 2030, due to the need to reduce infrastructure investment and rise in investment in cloud technology.

By region, the global insurtech market across North America held the largest share in 2022, contributing to nearly three-fifths of the market, due to increased adoption of insurtech among insurance companies and surge in partnership of insurtech companies with traditional insurers.

However, the market across Asia-Pacific is anticipated to portray the highest CAGR of 36.7% during the forecast period, owing to increase in adoption and investment in insurtech to boost business efficiency, lower compliance risk exposure, and improve claim settlement process in the region.

Peter Sonner   by Peter Sonner