AI companies aimed at disrupting the insurance sector raised nearly $2bn in 2023 alone through private equity and venture financing, according to research and analysis company GlobalData’s Technology Foresights model.
GlobalData’s Technology Foresights model is a framework that the company developed to forecast the disruption level of future technologies across various sectors.
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The company’s Foresights model analyses companies’ innovation portfolios to provide quantitative and qualitative insights.
GlobalData predicts that the 18% year-on-year increase in funding for AI companies in the insurance sector marks a shift in the insurance sector’s experimentation with AI.
AI is already used by insurance companies for processing claims and risk assessments, but GlobalData’s Technology Foresights identified that there is a new wave of AI innovation tailored to more niche insurance needs.
GlobalData’s practice head of innovation products Sourabh Nyalkalkar stated that the personal and health insurance space was being particularly disrupted by AI.
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By GlobalData“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,” said Nyalkalkar.
Property insurance was also being deeply affected by AI according to Nyalkalkar.
“In the property insurance space as well, a notable surge in innovation activity is apparent in both established industry leaders and upcoming startups,” he said.
“For instance, Tractable, which secured a $65m investment from SoftBank in July 2023, has pioneered a groundbreaking computer vision-based solution for swift damage assessment of vehicles and buildings,” stated Nyalkalkar.
GlobalData’s Technology Foresight model identified the biggest AI disruptions to insurance as underwriting AI technology, user behaviour analytics and automated premium discounting.
“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,” stated Nyalkalkar.
Nyalkalkar advises that insurance industry leaders and stakeholders should form AI partnerships early and take prudent action in potential AI-related acquisitions.
“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,” he stated.
