Recent progress in AI, supported by Large Language Models (LLMs) and generative AI, marks a new phase of disruption within the insurance sector. Several of these AI-led innovations that are poised to tackle diverse challenges across the insurance value chain are showing an accelerated trend on Technology Foresights, an innovation intelligence platform by GlobalData, a leading data and analytics company.
This emerging wave of AI-driven advancements encompasses all categories of insurance, including personal and property coverage. Tailored solutions are being developed to specifically target various challenges within the industry. For example, automated damage assessment utilizes computer vision and sensor data analysis to swiftly evaluate vehicle and property damage.
Similarly, treatment expense prediction AI harnesses Natural Language Processing (NLP) to extract valuable insights from diagnoses and reports, facilitating the assessment of health insurance claims. Additionally, innovations are being realized to incorporate longitudinal analysis of user behavior for purposes such as premium discounts and dynamic risk assessment.
Sourabh Nyalkalkar, Practice Head of Innovation Products at GlobalData, comments: “Analyzing the startup landscape on Technology Foresights reveals a significantly broader array of AI-driven applications within the insurance sector. Within the personal and health insurance space itself, a diverse range of solutions are on offer. Startups such as Prognomiq are developing multi-omics analysis platforms for early disease detection. On the other hand, startups like Pervisia and Cota are creating predictive healthcare expense management tools for payers and providers.”
In 2023, investments in AI technology companies aimed at disrupting the insurance sector surged by 18% year-on-year, reaching close to $2 billion solely through private equity and venture financing. This remarkable growth underscores a significant shift in an industry that has long been experimenting with AI. While AI has traditionally been utilized for tasks like risk assessment and claims processing, recent developments indicate a new wave of innovation tailored specifically for the insurance domain.
Nyalkalkar continues: “In the property insurance space as well, a notable surge in innovation activity is apparent in both established industry leaders and upcoming startups. For instance, Tractable, which secured a $65 million investment from Softbank in July 2023, has pioneered a groundbreaking computer vision-based solution for swift damage assessment of vehicles and buildings. Another startup Yembo is harnessing virtual 3-dimensional property inspection technology to redefine both underwriting and claims processes.”
Nyalkalkar concludes: “The evolving landscape of the insurance industry reveals the presence of over a hundred startups actively developing AI-led solutions, all monitored on Technology Foresights. Industry leaders and stakeholders can leverage this innovation intelligence strategically to take prudent actions, such as forming partnerships or acquisitions early. With a proactive approach, leaders in the insurance sector can effectively position themselves to navigate the dynamic market conditions and stay ahead of the disruptive forces.”
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