(Finance) – Theartificial intelligence is destined to revolutionize the insurance sector. This is what emerged today during the event “AI and Insurtech: new frontiers and opportunities for an insurance industry that looks to the future“, created by the Italian Insurtech Association, in partnership with Share, focused on shedding light on how AI applications will lead to an evolution of services and competitiveness in the insurance market. The day saw the participation of various players in the sector, startups and important multinationals who are already experimenting with AI applications, including: Google, EY, Microsoft, Avanade, Gellify, Casaleggio Associati and many others.
During the meeting it was the new edition of the Insurtech Investment Index 2023 presented, conceived by IIA and developed byFintech & Insurtech Observatory of the Polytechnic of Milanwhich monitors the progress of investments and the degree of innovation of the insurance sector in Italy.
In 2023 the level of digitalisation of the Italian market will increase again, obtaining a positive score of 20/30, a clear improvement compared to 14/30 last year. Mainly driving the growth are two factors: the significant increase in the development of companies’ internal projects and partnerships between the latter and insurtech startups. In fact, they are counted 108 internal projects (compared to 55 in 2022, with an increase of 96%) for a value of 44.8 million euros (compared to 23.7 million euros in 2022, with an increase of 89%). Furthermore, 45 partnerships with insurtech projects were created (compared to 25 in 2022, an increase of 80%).
“2023 was a year of recovery for Italian Insurtech. Firstly it is the number of insurance companies investing in insurtech startups has increased considerably; However, the most relevant evidence is that the main players in the sector have significantly increased investments in internal innovative projects and intensified partnerships with emerging insurtech startups.” He declares Filippo Renga, Director of the Fintech & Insurtech Observatory of the Polytechnic of Milan. “Particular attention must obviously be paid to Artificial Intelligence: in fact, 91% of insurance companies believe that AI and, more generally, technologies for data collection and analysis will play a crucial role in revolutionizing the insurtech market over the next decade.”
According to estimates by Italian Insurtech Association 2024 will mark a record year for insurtech investments by the market. By the end of the year they will be invested in solutions Artificial Intelligence around 50 million euros, which could reach 90 million by 2025 and 140 million in 2026. The investments made to date in AI have mainly been in the area of operation & data management and in the digitalisation and creation of products.
In the An increase in investments in sales and marketing components is expected in 2024where AI will be used mainly to educate consumers and intermediaries, this will result in the sale of beneficial policies and an increase in insurance penetration in Italy, a country still heavily under-insured.
“What emerged in today’s meeting is that projects for the development of solutions based on Artificial Intelligence are now on the tables of all the main insurance companies. Let us remember that in Italy the sectors that invest the most in AI are Telco and the Insurance one. We are witnessing an epochal challenge to ground the services they will have a huge impact on the business model of many insurance players“. He has declared Simone Ranucci Brandimarte President of IIA. “As the data collected by colleagues at the Polytechnic show, insurance companies are trying to develop internal projects to increase their competitiveness. The main challenge concerns, in our opinion, not only the value of investments, of which we expect a strong increase, but finding those competent profiles who will have the arduous task of developing these services”.
According to the annual Skills Report, created by the Italian Insurtech Association, the search for digital skills in the insurance sector has reached record figures. According to the latest survey, in the three-year period 2023/2025 the inclusion of 25,000 new profiles with advanced technological skills is expected. Specifically, figures such as: data manager, cloud architect, data analytics, warehousing & business intelligent, project & program management. According to the forecast of the 2024 Skills Report, by June there will be 15,000 figures sought by insurance players and who will be employed in the development of projects relating to AI.
According to the Italian Insurtech Association, the recipe for finding skills will be to develop further partnerships, not only with universities, but primarily with insurtech startups and “young” technology companies that can bring useful and already trained figures to the sector and its development.
Finally, in the research of IIA and the Fintech & Insurtech Observatory of the Polytechnic of Milan some predictions emerge for 2024: from the “type of operation” side we will see an ever-increasing growth in the development of internal projects in the insurtech sector (67%); on the technological side we will see an ever-increasing use of technological solutions that will revolutionize the development of the market, among these 91% Data Acquisition & Analysis (AI, Big Data, IoT) and 64% Communication & Sales (Chatbots, Rebo- advisors, Social Media, Video Platform).