AI insurance tech receives $2b investment in 2023

Insurers need to stay ahead amidst tech disruptions, says GlobalData head.

Recent advancements in artificial intelligence (AI), powered by Large Language Models (LLMs) and generative AI, are poised to disrupt the sector further. 

These innovations, highlighted on Technology Foresights by GlobalData, encompass diverse challenges across the insurance value chain.

GlobalData said AI has significantly shaped the insurance industry in recent years, integrating with traditional actuarial methodologies to enhance risk analysis and streamline claim processing.  

Innovations span all insurance categories, including personal and property coverage, targeting specific industry challenges. 

Automated damage assessment, using computer vision and sensor data analysis, speed up evaluations of vehicle and property damage. 

Treatment expense prediction AI, utilising Natural Language Processing (NLP), extracts insights from diagnoses and reports, aiding health insurance claim assessments.

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Longitudinal analysis of user behaviour informs premium discounts and dynamic risk assessment.

Investments in AI technology for insurance disruption grew by 18% in 2023, reaching nearly $2b through private equity and venture financing. This surge signals a significant shift towards tailored AI innovation in the insurance domain.

“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,” Sourabh Nyalkalkar, Practice Head of Innovation Products at GlobalData said in a media release.

“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.” Nyalkalkar added.