The US Insurance Distribution Technology Market: Analysis By Function, By Application, By Technology Type, By End-User Size & Trends with Impact of COVID-19 and Forecast up to 2028

The US Insurance Distribution Technology Market: Analysis By Function, By Application, By Technology Type, By End-User Size & Trends with Impact of COVID-19 and Forecast up to 2028

The US insurance distribution market was valued at US$195.15 billion in 2022 and is expected to reach US$307.46 billion by 2028. On the other hand, the US insurance distribution technology market in 2022 was valued at US$17.61 billion. The market is projected to reach US$42.71 billion by 2028. Insurance distribution technology refers to the use of various technological tools, platforms, and solutions to enhance the process of selling and delivering insurance products to customers. This technology aims to improve efficiency, customer experience, and the overall distribution strategy within the insurance industry.

The US region offers strong growth potential to the insurance distribution technology market. Insurance technology firms have been showing significant growth in the areas of auto, homeownership, and cyber insurance. Such strong growth would stimulate traditional insurers to either acquire technology capabilities or partner with InsurTech companies. With an increasing demand for innovative products and services from millennials, such collaboration would become a critical imperative. Due to such collaborations, traditional insurers would benefit from faster results in establishing a tech culture. The US insurance distribution market is expected to grow at a CAGR of 7.87%. Whereas, the US insurance distribution technology market would grow at a CAGR of 15.91% during the forecast period of 2023-2028.

Market Segmentation Analysis:

By Application: The US insurance distribution market has been analyzed based on the following applications: Property and Casualty (P&C), Health, and Life. Property and casualty (P&C) held the highest share in the market. The US property and casualty (P&C) insurance distribution market is expected to witness significant growth in the forthcoming years due to the rising use of technology and analytics to align products and pricing with consumer preferences, increasing spending on advertising P&C products, and the growing popularity of SaaS solutions.

By Segment: The US insurance distribution market has been bifurcated based on the following segments: Retail and Commercial. Commercial is expected to be the fastest-growing segment in the forecasted period. The combination of human and digital talent has driven the growth of commercial insurance distribution in the US. Whether in the form of APIs, push notifications, portal interoperability, advanced visualizations of deal financials, and scalable/self-learning models, tech is a key catalyst for improvement. Organizations that adapt fastest to these evolving distribution models have experienced rapid growth and margin improvements in the past few years.

By Function: The report provides the bifurcation of the US insurance distribution technology market into three segments based on function: Insurance Carrier Spending on Commissions; Insurance Broker Spending on Technology (Broker IT); and Insurance Carrier Spending on Advertising. In 2022, the commission segment held the highest share of the insurance distribution technology market. The commission segment is expected to experience high growth. The rising penetration of digital and telesales models is expected to increase the share of the broker commission. It is also expected that the bulk of integrated distributors’ growth would come from the auto and individual health and Medicare markets as these both have a growing digital aspect. The US advertising insurance distribution technology market can be futher divided into five applications: Auto, Health, Life, Home, and SMB Commercial P&C. The US home advertising market is expected to grow significantly over the forecast period, owing to the rising development of back-end call centers in the home insurance markets, the growing use of connected devices to streamline processes, etc.

By Technology Type: On the basis of technology, the market has been segmented into six parts namely Cloud Computing, Artificial Intelligence, Block Chain, Big Data & Business Analytics, IoT, and Others. Cloud computing held the major share in the market. The growth is expected to increase as cloud computing is a valuable delivery model that insurers can use to facilitate or accelerate business transformation. Moreover, cloud computing has a huge impact on the insurance industry, with benefits for internal processes, new customer acquisition, and building policyholders’ loyalty.

By End-user: The report provides the segmentation of the US insurance distribution technology market based on eight end-user: BFSI, Automotive, Manufacturing, Transportation, Government, Healthcare, Retail, and Others. BFSI held the highest share in the market, whereas the healthcare segment is anticipated to grow at the highest CAGR during the forecasted period. The growth can be attributed to the widespread use of the platform and peer-to-peer business models and lower insurance premium rates leading to a rise in the number of policymakers.

The US Insurance Distribution Technology Market Dynamics:

Growth Drivers: One of the most important factors impacting insurance distribution technology market dynamics is the increasing use of mobile technology and applications. By using mobile app technology, the insurance distributors can now easily reach out to their tech-savvy customers. These apps are extremely useful and viewed as invaluable assets when it comes to claims. They are capable of capturing and transferring data quickly, making the process hassle-free and expediting the complete insurance-related claims process. Furthermore, the market has been growing over the past few years, due to factors such as soaring urban population, rising millennial population, rise in the use of internet to buy insurance products, integration of artificial intelligence (AI) with insurance, etc.

Challenges: However, the market has been confronted with some challenges specifically, security concerns, infrastructure bottlenecks, etc.

Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such as increasing use of social media as a distribution channel, rising personalization trend, growing adoption of telematics, rising penetration of cloud-based insurance technology services, escalating demand for digital self-service, collaboration with bigtechs, surging popularity of virtual insurance advisor, emergence of subscription models, growing adoption of connected insurance, increasing use of blockchain in insurance, rising popularity of gamification in insurance industry, etc. Telematics refers to devices that merge telecommunications and information technology. With the proliferation of smartphones in the US, telematics has become a convenient method of data collection, with the ability to analyze information and compare data of users, improving underwriting with greater accuracy and efficiency. Therefore, it is expected that the growing adoption of telematics would further provide significant opportunities to the IT sector by making insurance distribution more efficient, and better coordinated.

Impact Analysis of COVID-19 and Way Forward:

The US insurance distribution technology market growth was positively influenced by the COVID-19 pandemic. The COVID-19 pandemic is forcing almost all organizations to speed up their digital transformation priorities. In regards to the insurance distribution technology industry, the most significant change is the growing interest throughout the pandemic in digital products that are more dynamic. This change would lead to much greater levels of personalization and so change the customer experience and value proposition. In post- COVID era, insurers must explore technologies like virtual reality, augmented reality, and virtual-visit solutions for facilitating virtual sales and intermediary enablement.

Competitive Landscape:

The US insurance distribution technology market is fragmented in nature, owing to the presence of a large number of small businesses catering to the demands of life and non-life insurance sectors.

The key players of the US insurance distribution technology market are:

GoHealth, Inc.
Brown & Brown, Inc. (Coverhound)
Goosehead Insurance, Inc.
Porch Group, Inc.
Clover Health Investments, Corp.
MediaAlpha, Inc.
Oscar Health, Inc.
Lemonade Inc.
Hippo Holdings Inc. (Hippo Insurance Services)
Root Inc.

Some of the strategies among key players in the market for insurance distribution technology are partnerships, mergers, acquisitions, and collaborations. For Instance, Lemonade entered into an agreement in 2021 to acquire Metromile (the data science company focused on auto insurance). Whereas, GoHealth has invested in multiple sectors such as HRTech, Employer Insurance, Employee Health IT, and more. MediaAlpha is one of the largest digital aggregator companies in the market. Whereas, companies such as GoHealth, Goosehead, and Porch are integrated distributors. With the rising preference for technical improvements in the insurance sector, such as artificial intelligence, machine learning, and blockchain technology, the number of deals made has been steadily increasing over the last few years. Insurance distribution technology firm’s ability to promote insurance industry innovation by generating new products would aid insurance companies in meeting the changing needs of their customers. As a result, various insurance distribution technology companies are gaining traction by providing a new and diverse set of services.

The US Insurance Distribution Technology Market: Analysis By Function, By Application, By Technology Type, By End-User Size & Trends with Impact of COVID-19 and Forecast up to 2028 - Report Summary

Report Metrics	Details
Years Considered	2018-2028
Base Year	2022
Forecast Period	2023-2028
Page Count	152
Units Referenced	US $
Segments/Key Topics	By Application, By Segment, By Function, By Technology Type, By End-User
Regions Covered	The US
Key Companies Mentioned	GoHealth, Inc., Brown & Brown, Inc. (Coverhound), Goosehead Insurance, Inc., Porch Group, Inc., Clover Health Investments, Corp., MediaAlpha, Inc., Oscar Health, Inc., Lemonade Inc., Hippo Holdings Inc. (Hippo Insurance Services), and Root Inc.

Five FAQs about the Report

What is the size of this market?
The US insurance distribution market was valued at US$195.15 billion in 2022. On the other hand, the US insurance distribution technology market in 2022 was valued at US$17.61 billion.

What is the forecasted growth for this market?
The US insurance distribution market is expected to reach US$307.46 billion by 2028, at a CAGR of 7.87%. On the other hand, the US insurance distribution technology market is projected to reach US$42.71 billion by 2028, growing at a CAGR of 15.91% during the forecast period of 2023-2028.

What are key factors driving this market?
The US region offers strong growth potential to the insurance distribution technology market. Insurance technology firms have been showing significant growth in the areas of auto, homeownership, and cyber insurance. Such strong growth would stimulate traditional insurers to either acquire technology capabilities or partner with InsurTech companies. With an increasing demand for innovative products and services from millennials, such collaboration would become a critical imperative. Due to such collaborations, traditional insurers would benefit from faster results in establishing a tech culture.

How is this market segmented in this report?
In the report, the US insurance distribution market can be divided based on application (Property and Casualty (P&C), Health, and Life) and segment (Retail and Commercial). The US insurance distribution technology market can be segmented based on function (Commissions, Broker IT, and Advertising); technology type (Cloud Computing, Artificial Intelligence, Block Chain, Big Data & Business Analytics, IoT, and Others); and end-user (BFSI, Automotive, Manufacturing, Transportation, Government, Healthcare, Retail, and Others). The US advertising insurance distribution technology market can be further segmented based on application (Auto, Health, Life, Home, and SMB Commercial P&C).

What is the definition of this market in this report?
Insurance distribution technology refers to the use of various technological tools, platforms, and solutions to enhance the process of selling and delivering insurance products to customers. This technology aims to improve efficiency, customer experience, and the overall distribution strategy within the insurance industry.

What are the major influences driving the growth/decline of this market?
The insurance distribution technology market is expected to increase due to soaring urban population, rising millennial population, rise in the use of internet to buy insurance products, increasing use of mobile technology and applications (apps), integration of artificial intelligence (AI) with insurance, etc. Yet the market faces some challenges such as security concerns, infrastructure bottlenecks, etc. Moreover, the market growth would succeed due to various market trends like rising personalization trend, growing adoption of telematics, rising penetration of cloud-based insurance technology services, escalating demand for digital self-service, collaboration with BigTechs, surging popularity of virtual insurance advisor, emergence of subscription models, growing adoption of connected insurance, increasing use of blockchain in insurance, rising popularity of gamification in insurance industry, etc.