Increasing demand for digital insurance products and online distribution is expected to shift $ 280 billion of existing insurance revenue by 2025, according to a report published Thursday by Accenture PLC.
The total global insurance industry's gross premium is expected to grow from $ 6.1 trillion in early 2020 to $ 7.5 trillion by the end of 2025 – a compound annual growth rate of 3.5%.
Of the $ 1.4 trillion in industry expected growth over the next five years, about 15%, or $ 200 billion, comes from new risks, products and services, the report said.
To compete for these $ 200 billion, insurance companies must develop new products in areas such as technology-enabled health and well-being, automobiles and homes; new services such as financial advice adapted to life and health; and new revenue streams from areas such as revenue generation, Accenture said.
When customers replace insurance with data-driven offerings, $ 1
At the same time, $ 140 billion in revenue from traditional insurance distribution could be transferred by insurance companies offering digital distribution experiences, as customers purchase insurance on digital channels and third-party platforms, according to the report.
"The recent acceleration to digital channels threatens the renewal of certain traditional premiums and changes the future revenue landscape for insurance companies," said Kenneth Saldanha, who heads Accenture's global insurance industry group, in a statement.
“Insurers that go from traditional to technology-led offerings that are better integrated with customer data are better positioned to lead; others risk losing revenue to digital first competitors and new entrants, he says.