Insurance Software Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

Global Insurance Software Market Trends and Insights

Cloud-native platform adoption accelerates digital transformation

Insurers now view migration to the cloud as a competitive requirement, not a cost exercise. Lincoln Financial Group completed a two-year cloud switch that cut software licensing costs and shortened cycle times by 20-30% while creating flexible DevOps pipelines.^{[1]Lincoln Financial Group, “Lincoln Financial Group Completes Cloud Modernization,” newsroom.lfg.com} Guidewire’s cloud suite already supports more than 570 insurers worldwide and lifted subscription revenue 35% in Q2 2025. Cloud architectures enable real-time data ingestion essential for dynamic pricing and embedded distribution, as seen in Duck Creek’s Policy solution that delivers bi-weekly updates through low-code tools. Variable infrastructure economics arising from these deployments free capital for rapid product iterations that legacy mainframes cannot match.

Rising insurer focus on AI-driven underwriting and claims automation

Artificial intelligence has advanced from pilot to production in underwriting, fraud detection, and claims adjudication. Guidewire’s Las Leñas release embeds machine-learning models that cut application review from days to minutes. LTIMindtree’s AI-Smart Underwriter on ServiceNow speeds risk assessment while halving administrative loads. Salesforce now offers pre-built AI components for policy administration that boost straight-through processing rates for mid-tier carriers. Sapiens’ UnderwritingPro v14 combines predictive analytics with agent portals, trimming processing costs by up to 40% and increasing customer satisfaction.^{[2]New York State Department of Financial Services, “23 NYCRR 500 Cybersecurity Requirements,” dfs.ny.gov}

Shift to usage-based and embedded insurance products

Coverage is moving closer to the point of purchase. Smartpay and Chubb launched Japan’s first embedded insurance for Buy Now Pay Later transactions, opening new youth segments. Zendrive powers usage-based auto programs that price risk from real-time driving signals captured by mobile sensors. Chubb Studio has integrated with e-commerce and banking partners to reach more than 100 million customers across Asia and Latin America, demonstrating scale advantages for API-first distribution. These models demand open, event-driven architectures that legacy systems cannot deliver.

Regulatory pushes for real-time compliance and reporting APIs

Rules such as Europe’s Digital Operational Resilience Act and the NAIC Insurance Data Security Model Law require automated incident reporting and continuous monitoring. DORA obliges European insurers to map ICT supply chains and test cyber-resilience from 2025. At least 22 U.S. states have adopted the NAIC model, imposing 72-hour breach notifications. New York’s 23 NYCRR 500 mandates multi-factor authentication and annual compliance filings.^{[3]Source: Sapiens International, “UnderwritingPro v14 Release Notes,” sapiens.com} Meeting overlapping mandates propels demand for integrated governance frameworks embedded into core platforms.

Legacy core migrations remain complex and costly

Many carriers still operate 20-year-old mainframes that lack APIs and present data-conversion risks. Life-policy data fields number into the thousands, making clean migrations prone to errors and extended testing. Equisoft notes that fear of disruption keeps some life insurers on legacy policy systems even as competitors gain agility with rules-based solutions. Balancing run-the-business continuity with phased replacement schedules inflates budgets and slows time-to-value.

Cyber-security and data-sovereignty regulations tighten

Insurers must simultaneously guard against rising ransomware and meet region-specific privacy rules. The NAIC model law forces carriers to maintain documented information-security programs and report incidents within three days. DORA extends oversight to cloud providers, requiring resilient multi-region deployments. New York’s Class A designation now compels larger insurers to implement continuous threat monitoring and maintain internal audit functions. Cloud vendors without in-region data centers face disqualification, limiting supplier pools and raising implementation costs.

Segment Analysis

By Deployment: Cloud dominance accelerates

Cloud deployment captured 65.7% of 2024 revenue, equal to the largest slice of the insurance software market. At the same time, it is forecast to post a 10.5% CAGR, making it both the incumbent and the growth engine. The insurance software market size advantage arises because elastic infrastructure supports real-time rating, low-code configuration, and bi-weekly feature drops that on-premises stacks cannot match. Subscription models convert fixed CapEx into variable OpEx, freeing budgets for innovation. Guidewire Cloud reported 35% subscription growth on the back of 570 live insurers, while Duck Creek’s Active Delivery shows how automatic updates keep carriers evergreen. On-premises installations persist for regulated lines such as workers’ compensation where data-sovereignty rules still hinder cloud adoption, yet their share continues to erode as hyperscalers achieve compliance certifications across additional jurisdictions.

Cloud migrations also underpin embedded insurance rollouts, because retailers and mobility platforms demand API-first connections that can be spun up in weeks. Carriers running cloud cores report launch cycles that are one-quarter of those on legacy stacks, enabling them to test niche micro-products without sunk-cost risk. Moreover, vendors bundle cloud hosting with DevSecOps toolchains and continuous penetration testing, partially offsetting new cyber-compliance burdens. As a result, enterprise architects now rank portability and event-stream processing among top vendor-selection criteria, re-inforcing the flywheel for further cloud adoption in the insurance software market.

By Insurance Type: PandC leadership meets AandH innovation

Property and casualty systems held 48.8% of 2024 revenue, securing the single-largest vertical position in the insurance software market. Multi-line complexity, high claims volumes, and tight regulatory reporting requirements lock in ongoing PandC spend. Conversely, accident and health platforms grow at 12.3% CAGR through 2030, the fastest of all segments. Wellness programs, telehealth integration, and pandemic-driven digital mandates pull fresh IT budgets into this line. Consequently, accident and health applications will lift their share of the insurance software market size faster than any other segment over the forecast period.

PandC’s continued dominance is reinforced by climate-driven catastrophe modelling and usage-based auto programs that require petabyte-scale data ingestion. Vendors embed predictive scoring for wildfire or flood exposure and deliver AI-assisted claims triage to control loss ratios. In the health arena, API connections to wearable devices and pharmacy benefit platforms unlock real-time engagement, while rules engines personalize benefits for each cohort. Life and annuity software adoption is also rising, especially in Asia, where rising middle classes demand wealth-accumulation products managed via mobile apps. The result is a diversified yet synergistic demand profile that keeps multi-line vendors ahead of niche suppliers.

Note: Segment shares of all individual segments available upon report purchase

By End User: Brokers drive digital acceleration

Insurers themselves generated 62.2% of overall 2024 spending, reflecting control over core policy-administration decisions. Nevertheless, the broker channel is the fastest-growing buyer group at 8.1% CAGR. AI-powered prospecting, instant quoting, and automated renewals are essential for intermediaries defending margin against direct-to-consumer carriers. Applied Systems’ Marketing Automation module increased renewal productivity for the MacCormack Agency by 47%, showing tangible ROI. As new advisory-as-a-service models emerge, brokers will require CRM, commission management, and connectivity to comparative raters, broadening the addressable insurance software market.

Carrier IT budgets remain larger in absolute terms; however, their multi-year program timelines yield slower annual growth. Large insurers prioritize cloud migrations, IFRS 17 accounting engines, and cyber-resilience upgrades—all capital intensive and sequential. Brokers, by contrast, roll out SaaS plug-ins in quarters, fueling higher velocity for vendors that can prove out short payback periods. Agencies and managing general agents occupy the middle ground, integrating policy lifecycle tools with lead-generation platforms to preserve customer stickiness.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

North America remains the largest regional buyer, accounting for 38.7% of 2024 global revenue. Carriers funnel budgets into cloud migration programs that unwind decades-old mainframes, comply with the NAIC Insurance Data Security Model Law, and satisfy New York’s 23 NYCRR 500 rules on multi-factor authentication and 72-hour breach notifications. Vendor selection favors established suites with proven integration accelerators, as illustrated by Guidewire’s USD 918 million annual recurring revenue in 2024.

Asia-Pacific delivers the fastest growth, clocking a 10.8% CAGR through 2030. Rising disposable incomes and favorable regulatory sandboxes allow carriers to launch API-centric products that bundle coverage with e-commerce, mobility, or wellness apps. When Chubb Studio integrated with a Southeast Asian super-app, it gained exposure to tens of millions of new users. China’s return to premium expansion and India’s 9% life-insurance growth guide vendors to localise interfaces and comply with on-shore data-residency rules.

Europe’s outlook is shaped by DORA, which formalizes ICT risk-management obligations and continuous testing from 2025. Carriers invest in observability, third-party vendor assessment, and centralized incident playbooks. Meanwhile, Latin America and Africa accelerate from a low base as regulators introduce digital-policy acceptance and e-signature frameworks that remove paper-based bottlenecks. Carriers in these regions often select cloud systems bundled with managed services to offset skill shortages, illustrating the diverse yet complementary growth vectors within the insurance software market.