The wave of digitalization has spread across various sectors. Insurance companies has also been observed adopting digitalization at significant rate. The traditional model of insurance is drastically being transformed into modern approach known as insurtech. The word "insurtech," that combines the terms "insurance" and "technology," originated in light of the term "fintech." Moreover, the need for new approach has become necessary owing to the slow progress of insurance sector. Insurance coverage ownership rates have decreased by about 3% since 2021 and by approximately 12% during the previous ten years, globally. Hence, the importance for insurtech is growing.
Further, there has been recent trend still making its place in insurtech industry such as drones. Innovative hardware development is an additional aspect of insurtech. Drones have the potential to inspect a site for a claim or to assess property damage in areas where it would have been dangerous for individuals to walk through. Due to drones' growing dependence on high-definition video and photo quality, inspectors have the ability to place an important degree of reliance on screenshots and flight data that has been saved. However, there is still lot more innovation need to be made for the progress of insurtech. Owing to the growing advancement in technology the next wave of insurtech is expected to detrimental. The traditional insurance providers find it difficult to adopt with technology changes. Additionally, the risk of cyber security is also growing. However, the skilled insurer who are young are taking lead of the market. Also, over the past ten years, investment in insurtech firms have totaled about USD 15 billion, and in the initial three quarters of 2021, insurtech investment exceeded that of 2019 and 2020 altogether.[R1] Also, various initiatives has been launched to educate the insurers. Therefore, with the startup taking control this issue could be resolved. However, the issue of cyber security still remains the same. Though it is skilled personnel or unskilled the risk of cyber security will grow with the growing adoption of technology. This would highly disrupt the market. As a result, insurance companies have to take into account a broader ecosystem for cyber security, which includes partners from all points along the supply chain. Brokers, law firms, cyber security providers, experts in threat intelligence, IT forensics companies, and PR agencies, for instance, may fall under this category. Insurers may acquire market share in one of the biggest growth opportunities that exists in the global insurance market through creating these kinds of services and acting as the end-to-end glue that connects these partners and components. At the same time, by being an integral component of the initial reaction team, they have the opportunity to provide exceptional service for their clients in their time of need.
Government initiatives for cyber security in 2022 by different countries
Market Outlook for Cyber Security Insurance
The sector for cyber security insurance is estimated to earn the value of USD 90 Billion by the end of 2035 which was just about USD 14 Billion in the year 2022. This growth of the sector is at a rate of 27%.
This concept of insurtech is new for every insure. However, in this growing age of digitalization, the need for technology advancement in this field is also necessary even though it has few disadvantages or difficulties. Government and all other institutions are making collective efforts to this change in the insurance sector. Yet it would require a considerable time for its growth. Hence, during this process in the growth of insurtech the organization is expected to maintain its security in order to build trust of the clients. Maintaining the cyber security of the insurtech would generate the greater revenue which is unpredictable but the sector would grow is determined.