United States Insurtech Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

United States InsurTech Market can be segmented by the Types of Insurance Provided (Life and Non-Life) and by Business model (Enabler, Carrier, and Distributor)

Market Snapshot

CAGR
Study Period: 2018-2027
Base Year: 2021
CAGR: >7 %

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Market Overview

The USA insurance industry is the biggest one in the world owning almost 40% of total global insurance premiums.The COVID-19 crisis has entrenched American dominance. 2021 has seen three or four years worth of progress compressed into just one.

Tremendous size, advanced maturity, high complexity, outdated solutions. Insurance industry in the USA seems to be the dream one for startups ready to revolutionize the market and disrupt its current state. And although the US InsurTech is leading with innovations.

The gap between public expectation and insurer performance has provided billions to insurtechs. Auto insurtechs have managed to carve out a chunk of the $280 billion market. Between 2010 and 2021, more auto insurtech deals took place in the US than the rest of the world combined. During COVID-19, many insurtechs have not just survived they have thrived. At least 15% of tech IPOs in 2021 belonged to insurtechs.

Scope of the Report

Insurtech refers to technological innovations that are created and implemented to improve the efficiency of the insurance industry. Insurtech powers the creation, distribution, and administration of the insurance business.

Macro trends have been driving change in the insurance risk landscape. And along with coping with new and emerging risks, the industry began to shift, in recent years, to include new business models and disruptive newcomers. COVID-19 has underscored gaps around the technology, systems, products, and processes of both established insurers and InsurTech firms. 

United States InsurTech Market can be segmented by the types of Insurance Provided ( Life and non-life) and by business model (enabler, carrier, and distributor)

By Business Model
Carrier
Enabler
Distributor
By Insurance Type
Life Insurance
Non-Life Insurance

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Key Market Trends

Surged Funding towards Insurtech Companies

In the current conditions of the pandemic, the Insurtech companies are flourishing. As per reports, the companies in the insurtech sector raised over USD 6.5 Billion in private funding in just over 300 deals in 2021. 2021 accounted for approximately 34% of all investments to date in insurtech companies.

The late-stage financing by insurtech companies increased by 47% in 2021 and number of deals by over 200%. COVID-19 helped fuel a record year of equity financing for insurtechs, especially those that enable insurers to leverage digital and analytics in new ways.

The pandemic has accelerated the industry’s digital transformation by at least five years forcing incumbents to open or enhance digital distribution channels and to make corresponding upgrades to back-office capabilities. The demand for digital solutions is increasing across the insurance value chain, from quote issuance to claim settlement, as our interviews with insurtech C-suite executives showed.

Share of  Insurtech Funding Transactions Globally 2021

Increased Penetration of Technology in the Insurance Sector is Driving the Market

Insurance has been an industry with low customer engagement. The slow digitization of the industry has hindered a high frequency of interaction between insurers and insureds. The lack of more customer touchpoints has meant that insurers have fewer opportunities to gain insight into customer needs and to use insights to customize products. Higher frequency of interaction with customers was always a big challenge for insurers. The digital age has brought us countless opportunities and frequent touch points.

New digital players pose a potential competitive challenge as their low-cost technology platforms and different business models help them compete asymmetrically by targeting areas of the insurance value chain. Data technology is transforming the very nature of risk—the core element of the industry’s business model—by enabling new ways to create, capture, and analyze data valuable to insurance firms.

Health Insurance is being complemented with wearables like fitbit. Health and life insurance will also be transformed as wearable biometric sensors, such as FitBits, provide insurance firms with unprecedented data on the health of their clients.

Car insurance is yet another area that will be transformed by connected devices as telematics can transmit valuable data for assessing an individual’s risk profile. Instead of relying simply on basic information like age and gender, the type of car someone drives, and their history of accidents or offenses, insurers today can obtain Realtime data on their policyholders’ driving habits.

Estimated Revenue Multiple Insurtech Companies (USD Billion)

Competitive Landscape

United States Insurtech Market is highly competitive, with the presence of both international and domestic players. The market studied presents opportunities for growth during the period, which is expected to further drive the market competition. With multiple players holding significant shares, the market studied is competitive.

Recent Developments

  • January 2020, Coastal Insurance Underwriters, Inc. acquired Assets of Tech Company Partner. Coastal Insurance Underwriters, Inc. (Coastal) is a program administrator specializing in designing, creating, and managing insurance products for a variety of business classes, including condominium associations, homeowner associations and golf and country clubs.
  • August 2021, Clover Health, a leader in proving innovative technologies, in Florida entered into a partnership with ValueH, a prominent organization offering Value-based Care. Clover Health is committed to improving health equity for America’s underserved seniors, announced a strategic partnership with ValueH a leading member organization focused on Value-Based Care. The Clover’s Direct Contracting Entity (DCE) will offer Medicare providers to manage the care of patients with the Clover Assistant portal.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and market definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porters 5 Force Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 Insights on Various Technologies Driving the Insurtech Space Growth in United States

    6. 4.6 Insights on Regulatory Framework And Roadblocks for acquiring Fintech Licensing in United States

    7. 4.7 Funding And Investment Activity in Insurtech Space in United States

    8. 4.8 Impact of Insurtech in United States Insurance Industry

    9. 4.9 Impact of Covid 19 on the Industry

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Business Model

      1. 5.1.1 Carrier

      2. 5.1.2 Enabler

      3. 5.1.3 Distributor

    2. 5.2 By Insurance Type

      1. 5.2.1 Life Insurance

      2. 5.2.2 Non-Life Insurance

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Gusto

      2. 6.2.2 Oscar

      3. 6.2.3 Bright Health

      4. 6.2.4 Clover Health

      5. 6.2.5 Root Insurance

      6. 6.2.6 American Well

      7. 6.2.7 Lemonade

      8. 6.2.8 Outsystems

      9. 6.2.9 Next Insurance

      10. 6.2.10 Metromile

      11. 6.2.11 Hippo*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER

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Frequently Asked Questions

The United States Insurtech Market market is studied from 2018 - 2027.

The United States Insurtech Market is growing at a CAGR of >7% over the next 5 years.

Gusto, Oscar, Bright Health, Clover Health, Root Insurance are the major companies operating in United States Insurtech Market.

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