The legacy insurance sector has experienced disruptive pressures from new technologies, start-up Insurtech competitors and changing customer demands. Within this environment, organic growth hasn't provided business transformation.
Thus, insurance companies have relied on mergers and acquisitions (M&A) to leapfrog traditional competitors. That said, the number of M&As in the industry has grown by 1,096 percent since 1985, and 128 percent in the past 10 years.
However, business technology innovation and IT-enabled automation will likely drive the majority of new growth via digital transformation strategies.
Insurtech Automation Market Development
Robotic Process Automation (RPA) is a software solution which is designed to complete activities originally performed by humans. RPA is the future of most repetitive tasks that do not require cognitive capabilities, allowing employees to focus on things that deliver greater value.
Moreover, RPA has proved to be much more accurate and efficient than humans and, when combined with artificial intelligence (AI), it can learn how to handle exceptions and even perform complex non-rules-based tasks.
RPA can lower costs, raise productivity and improve customer experience -- essentially remodeling the way businesses operate. In addition, the high penalties associated with regulatory non-compliance have forced insurers to adopt RPA solutions to streamline manual tasks and improve accuracy.
According to the latest worldwide market study by Juniper Research, insurers will spend $634 million on RPA solutions by 2024, rising from $184 million in 2019 -- that's a 245 percent increase over the next 5 years.
The new study found that previous growth strategies using M&A in the highly-saturated insurance market have resulted in disparate policies, practices and software applications. Adopting RPA solutions will appeal to insurers by enabling substantial cost and time savings, created by mitigating these disparities.
Juniper Research has forecast that North America and Europe will lead RPA adoption over the next 5 years, with more than 65 percent of insurance providers adopting the solutions by 2024. These regions have experienced flat insurance premium revenue growth, therefore insurers want to reduce their costs.
The research also found that RPA will become a crucial enabler in the quest for operational efficiency gains. That's why Juniper has urged IT vendors to ensure effective AI integration so that RPA can perform valuable tasks in a highly reliable way.
Advances in RPA solutions will drive the growth of spending on RPA per insurer. Juniper has forecast that RPA would leverage advances in AI to offer sophisticated services in insurance underwriting, claims management and data handling -- driving the average spend per company by 30 percent over the next 5 years.
Outlook for RPA Applications Growth
"Although automation can bring results in a few weeks, scalability can only be achieved when bots learn how to operate outside simulated environments. Bots must be continuously trained to understand exceptions and non-linear processes, or companies risk being left with limited return on their RPA investment," said Maite Bezerra, research analyst at Juniper Research.
Note, the United States market has the highest forecast platform revenue, estimated at $283.3 million in 2024. This can be attributed to a large number of insurance companies operating in the country. In 2019 the U.S. has 6,838 business operating in the insurance industry, while Western Europe has 5,395.
Thus, insurance companies have relied on mergers and acquisitions (M&A) to leapfrog traditional competitors. That said, the number of M&As in the industry has grown by 1,096 percent since 1985, and 128 percent in the past 10 years.
However, business technology innovation and IT-enabled automation will likely drive the majority of new growth via digital transformation strategies.
Insurtech Automation Market Development
Robotic Process Automation (RPA) is a software solution which is designed to complete activities originally performed by humans. RPA is the future of most repetitive tasks that do not require cognitive capabilities, allowing employees to focus on things that deliver greater value.
Moreover, RPA has proved to be much more accurate and efficient than humans and, when combined with artificial intelligence (AI), it can learn how to handle exceptions and even perform complex non-rules-based tasks.
RPA can lower costs, raise productivity and improve customer experience -- essentially remodeling the way businesses operate. In addition, the high penalties associated with regulatory non-compliance have forced insurers to adopt RPA solutions to streamline manual tasks and improve accuracy.
According to the latest worldwide market study by Juniper Research, insurers will spend $634 million on RPA solutions by 2024, rising from $184 million in 2019 -- that's a 245 percent increase over the next 5 years.
The new study found that previous growth strategies using M&A in the highly-saturated insurance market have resulted in disparate policies, practices and software applications. Adopting RPA solutions will appeal to insurers by enabling substantial cost and time savings, created by mitigating these disparities.
Juniper Research has forecast that North America and Europe will lead RPA adoption over the next 5 years, with more than 65 percent of insurance providers adopting the solutions by 2024. These regions have experienced flat insurance premium revenue growth, therefore insurers want to reduce their costs.
The research also found that RPA will become a crucial enabler in the quest for operational efficiency gains. That's why Juniper has urged IT vendors to ensure effective AI integration so that RPA can perform valuable tasks in a highly reliable way.
Advances in RPA solutions will drive the growth of spending on RPA per insurer. Juniper has forecast that RPA would leverage advances in AI to offer sophisticated services in insurance underwriting, claims management and data handling -- driving the average spend per company by 30 percent over the next 5 years.
Outlook for RPA Applications Growth
"Although automation can bring results in a few weeks, scalability can only be achieved when bots learn how to operate outside simulated environments. Bots must be continuously trained to understand exceptions and non-linear processes, or companies risk being left with limited return on their RPA investment," said Maite Bezerra, research analyst at Juniper Research.
Note, the United States market has the highest forecast platform revenue, estimated at $283.3 million in 2024. This can be attributed to a large number of insurance companies operating in the country. In 2019 the U.S. has 6,838 business operating in the insurance industry, while Western Europe has 5,395.