Aug 3, 2023

Key Players SAP SE, IBM Corporation, Salesforce, Inc., Oracle Corporation, SAS Institute Inc., Microsoft Corporation, Applied Systems, Shift Technology, SimpleFinance, OpenText Corporation, Quantemplate, Slice Insurance Technologies, Pegasystems Inc., Vertafore, Inc., Zego, and Others Report Highlights By offering, the software segment is expected to hold the largest share of the market during the forecast period. By automating fraud detection processes, software can save costs and protect insurers from financial losses due to fraudulent activities. By deployment, the cloud segment is expected to hold the largest share during the forecast period. These services include natural language processing (NLP), image and video analysis, speech recognition, and more. Insurers can integrate these AI services into their applications without the need for extensive AI expertise. By end user, the life and health insurance segment is expected to capture the largest market share over the forecast period. AI technologies, including machine learning algorithms, are used to analyze a wide range of data sources in the life and health insurance sectors. This data may include medical records, lifestyle data, genetic information, and more. AI-driven underwriting models help insurers assess risks more accurately, enabling them to tailor insurance products and set appropriate premiums based on individual health profiles. AI is employed to analyze health data and predict potential health risks. In the health insurance segment, this can help insurers encourage policyholders to take proactive measures to prevent or manage certain health conditions, ultimately reducing claims and healthcare costs. Thereby, driving the segment growth during the analysis period. By application, the fraud detection and credit analysis segment is expected to hold a substantial market share during the forecast period. Fraud detection is a critical aspect of the insurance industry, as fraudulent claims can result in significant financial losses. AI-powered fraud detection systems analyze vast amounts of data, including historical claims data, customer behavior patterns, and external data sources, to identify suspicious activities and potential fraud indicators. Additionally, AI-driven credit risk assessment models analyze an individual's credit history, payment behavior, and financial stability to determine their credit risk. This information helps insurers make informed decisions on financing options and credit terms. Thus, influencing segment growth. By organization size, the large enterprise segment is expected to hold the dominant share of the market during the forecast period. AI systems can provide personalized recommendations, answer customer queries, and assist with policy-related inquiries, leading to improved customer engagement and satisfaction for large-scale organization. Market Dynamics Cost efficiency and automation Insurance companies face significant operational challenges, including manual and time-consuming processes. AI technologies, such as robotic process automation and natural language processing, offer automation of repetitive tasks, leading to increased operational efficiency and cost savings. Automation reduces human errors, accelerates processes like claims handling, underwriting, and policy administration, and allows employees to focus on more complex and strategic tasks. Therefore, the cost efficiency and automation benefits provided by AI are expected to propel the market expansion during the projected period. Restraint Lack of skilled workforce The successful implementation of AI technologies requires a skilled and knowledgeable workforce capable of developing, managing, and interpreting AI models. The demand for AI talent often outpaces the available supply, making it challenging for some insurance companies to find the right expertise to drive their AI initiatives effectively. Thus, the lack of a skilled workforce is expected to hamper the industry growth over the projected period. Opportunity Enhanced customer experience AI-driven chatbots and virtual assistants have transformed customer service in the insurance industry. These intelligent systems can provide real-time support and personalized responses, improving customer engagement and satisfaction. Additionally, AI enables insurers to offer tailor-made insurance products and pricing based on individual customer profiles, leading to a more customer-centric approach. Thus, the enhanced customer experience is expected to offer an attractive opportunity for market growth during the analysis period. Challenge Explainability and transparency issues AI algorithms, particularly those based on deep learning and neural networks, can be complex and challenging to interpret. The lack of transparency and explainability in AI decision-making processes can raise concerns among regulators, customers, and even within the insurance companies themselves. In highly regulated industries like insurance, explainable AI is essential to build trust and comply with regulatory requirements. Thus, this is expected to act as a major challenge for the market growth over the forecast period. Related Reports AI in Healthcare Market - The global AI in healthcare market was valued at USD 15.1 billion in 2022 and it is expanding around USD 187.95 billion by 2030 with a CAGR of 37% from 2022 to 2030. 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