What's Happening?
Gallagher Re has released a report indicating that since 2012, over $60 billion has been invested globally in insurtech firms. The report highlights a significant surge in investment towards artificial intelligence (AI) within the insurtech sector, with $15 billion directed towards AI-focused propositions in the latest quarter. This accounts for 57.1% of insurtech funding during this period. Andrew Johnson, Gallagher Re’s global head of insurtech, emphasized the importance of utilizing AI to remain relevant in the insurance industry, despite some skepticism about its impact.
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Why It's Important?
The growing investment in AI within the insurtech sector underscores the technology's potential to transform the insurance industry. AI can enhance risk assessment, pricing, claims management, and capital allocation, providing a competitive edge for insurers. As the industry faces increasing threats from catastrophes, AI adoption could lead to a more stable market, supporting communities and economies. The focus on AI reflects a broader trend towards technological innovation in insurance, which could reshape risk transfer and improve efficiency.
What's Next?
The report suggests that insurtechs and AI companies must showcase effective use-cases to maintain relevance. As AI becomes a competitive differentiator, insurers that integrate it into their processes may gain an advantage. The industry is expected to continue evolving, with AI playing a crucial role in managing complex risks and supporting economic stability.
