PUBLISHER: IDC | PRODUCT CODE: 1370154
PUBLISHER: IDC | PRODUCT CODE: 1370154
IDC FutureScape: Worldwide Insurance 2024 Predictions
This IDC FutureScape presents the top 10 insurance industry predictions for 2024. Each prediction is shaped by a shared set of key drivers, serving as a planning tool for technology leaders and their line-of-business (LOB) counterparts in their IT strategic planning efforts. The 2024 edition of the IDC FutureScape for insurance underscores the vital need for insurers to embrace an ambidextrous approach. This approach is crucial for striking a balance between mitigating risks and exploring new opportunities to ensure survival and prosperity in the face of uncertainties. It has become imperative to shatter the industry's silos and organizational boundaries by strategically adopting digital technologies. These technologies are instrumental in unlocking the sector's full societal impact. For the next five years, insurers are at a critical juncture where they must pioneer digital-first strategies. This pioneering effort involves leveraging emerging technologies such as trusted data exchange platforms, telehealth solutions, "climatech" innovations, and digital twins, as well as the significant advancement of large language models (LLMs) and multimodal generative AI models such as DALL-E. "In an era defined by uncertainty, where a multitude of challenges and opportunities coexist, digital maturity is no longer a choice - it is the essential foundation of the modern competitive arena. Insurers must master the art of balancing digital innovation with risk mitigation to enhance their digital capabilities," said Davide Palanza, research manager at IDC Financial Insights. "As insurance leaders grapple with the imperative of deriving tangible value from their digital endeavors, the future belongs to those that embrace emerging technologies with sharp business insight and foresight. What's at stake isn't merely survival; it's about leading the charge in reshaping the future of the insurance sector."
IDC FutureScape Figure
Executive Summary
IDC FutureScape Predictions
- Summary of External Drivers
- Predictions: Impact on Technology Buyers
- Prediction 1: By 2024, 33% of insurers will increase investments in external app development services, positively impacting digital monetization models and increasing the share of digital revenues by 15%.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 2: By 2024, embedded payments in P&C insurance will cut operational costs by 25% and streamline payments collection and reconciliation for policy bounding, renewals, and claims settlement.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 3: By 2025, insurtech market consolidation drives outcome-based pricing adoption by 60% of tier 1 and 50% of tier 2 global insurers, enhancing value-driven partnerships and efficiency.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 4: By 2025, bridging the silver economy protection gap will lead 60% of worldwide health insurers to collaborate with telehealth providers, offering wider access to personalized and preventative care.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 5: By 2026, as public cloud is given priority for modernizing agent-producer relationship systems, 35% of insurers will adopt sovereign solutions to foster regulatory compliance.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 6: By 2027, due to AI regulations, 60% of AI algorithms adopted by insurers along the policyholder value chain will leverage synthetic data, to ensure system fairness and regulatory compliance.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 7: By 2027, climate risk modeling tools will enable reinsurers to improve NatCat risk exposure estimation accuracy by 50%, resulting in a reduction of NatCat loss ratio via risk-adjusted pricing.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 8: By 2027, GenAI-based advisor enablement tools will lead to a 15% spike in distribution sales volume and a 20% boost in sales ROI by delivering personalized and empathetic engagement at scale.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 9: By 2028, 60% of auto insurers will spend 30% more on trusted data exchange technologies, to become preferred partners of OEMs bundling insurance, increasing auto coverage revenues and IP monetization.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 10: By 2029, 80% of auto insurers adopting claims process digital twins will prioritize accident recreation underlying capabilities to reduce 40% of casualty claims adjustment expenses and fraud losses.
- Associated Drivers
- IT Impact
- Business Impact
- Guidance
- Prediction 1: By 2024, 33% of insurers will increase investments in external app development services, positively impacting digital monetization models and increasing the share of digital revenues by 15%.
Advice for Technology Buyers
External Drivers: Detail
- AI Everywhere - Generative AI Takes the Spotlight
- Economic Uncertainty - IT Malaise and Market Volatility
- Cybersecurity and Risk - Building Resilience Against Multiplying Threats
- The Digital Business Imperative - Competitiveness and Outcomes
- Everything as a Service Intensifies - Transforming Models to Drive Change
- Dynamic Work and Skills Requirements - New Work Mode Era
- Shifting Tech Regulatory Landscape - Navigating Risk and Opportunity
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