Why this is important to Wisconsin businesses: Wisconsin tech companies may find opportunities to collaborate as businesses in the UK and France move to adopt new systems.
Technology has become increasingly essential for the insurance industry, and Europe is a key target for the new systems.
With a huge amount of data at its fingertips and the need to calculate risk as accurately as possible, the insurance technology sector, also known as insurtech, is growing quickly. The global insurtech market was valued at $3.85 billion in 2021 and is expected to expand at a compound annual growth rate of 51.7% from 2022 through 2030.
Nearly half of the market growth over the next several years (47%) is expected to come from Europe, particularly the UK and France. Both countries count a significant number of businesses in the field, from small, cutting-edge startups to well-known, major brands. In fact, the UK is home to 136 insurtech companies—the largest concentration in Europe—while Germany ranks second with 93 and France follows with 61 firms, according to a December 2021 study by the Institute for Financial Services Zug.
Insurance companies are investing in digital technology for a variety of reasons. Making better use of the data they generate can reduce costs, improve efficiency, deliver better services and boost revenues. In addition, as businesses are becoming increasingly tied to technology, they are demanding better and easier access to insurance technology services. Insurtech includes risk-averting models and predictive mechanisms to help customers better prepare for the future.
Digital technologies are widely used across the insurance market to understand customer needs and to enhance offerings based on changing demands. According to a survey conducted in 2021 by EIS Group, 59% of the insurance companies polled increased their investment in digital infrastructure.
One example is blockchain technology, which records and stores transactions securely, and allows a database to be shared.
Blockchain technology offers benefits that include cost savings, faster payments and fraud mitigation. Insurance companies can use it to verify customers and conduct anti–money laundering procedures in order to prevent fraud. It can be used to streamline claims processing and to help customers compare quotes from different companies, according to the Damco Group. The advantages play a role in improving trust between insurance companies and their customers.
Wisconsin businesses involved in insurance technology may find opportunities in countries such as the UK and France, with their strong financial centers and increasing interest in adopting the new technologies.