According to Precedence Research, the global insurtech market size has been calculated at USD 36.05 billion in 2025 and is forecasted to reach over USD 600 billion by 2034, accelerating at a compound annual growth rate of 37.10% from 2025 to 2034. This article provides the basics of insurtech and highlights some real-world applications.

 

In some quarters, insurance is considered a necessary evil. Be it health, life or vehicle insurance to name a few, they can be costly to secure and maintain, but can become invaluable when a crisis occurs. As life becomes increasingly fraught with uncertainty – be it climate or weather-related, politics or wars –

 Insurtech, a fusion of “insurance” and “technology,” is transforming the global insurance landscape by leveraging cutting-edge digital solutions. Unlike traditional insurance models, which rely on paperwork, human intermediaries, and legacy systems, insurtech introduces automation, data analytics, and artificial intelligence (AI) to streamline processes, enhance customer experiences, and reduce costs.

Insurtech is still relatively new worldwide and more so in the Caribbean region. This article should serve as a primer on Insurtech by outlining the differences between traditional insurance, the technologies driving this transformation, the services offered, and some real-world examples of Insurtech in developing countries.

 

Traditional insurance vs. insurtech

Traditional insurance has long been characterised by cumbersome processes, lengthy claim settlements, and rigid policies. The primary distinctions between traditional insurance and insurtech include:

  1. Claims processing. Traditional claims processing is time-consuming, involving extensive paperwork. By leveraging technologies, such as AI and blockchain technology, insurtech accelerates claims settlements by deploying automated and efficient digital processes.
  2. Customer experience. Traditional insurers tend to provide one-size-fits-all policies that could not be customised to the needs of their clients. They also rely heavily on agents and manual underwriting, which has perpetuated the rigid approach to the policies that could be secured. On the other hand, insurtech companies offer seamless digital interfaces, personalised and accessible services with greater scope to customise them to clients’ needs.
  3. Accessibility. Traditional insurers require in-person visits or phone calls for policy management, which to some degree may have been informed by know-your-customer policies which have become increasingly prevalent in the financial services sector. Insurtech platforms allow users to purchase, modify, and claim policies through mobile apps and websites.
  4. Pricing and risk assessment. Conventional insurance firms use broad categories to determine premiums, which again may be due to the policy constraints and the inherent challenges in managing different permutations on policy offerings. However, since insurtech employs data-driven, AI-powered risk assessments, it can offer dynamic, real-time pricing models.

 

Key technologies powering insurtech

Insurtech leverages various digital technologies and innovations to enhance service efficiency and customer satisfaction. Core technologies that are being deployed include the following:

  • AI and machine learning (ML). AI-driven chatbots and ML algorithms analyse vast data sets to improve risk assessment, fraud detection, and claims processing.
  • Big data and predictive analytics. By analysing vast datasets, such as those covering customer behaviour, health records, market trends and even historical insurance and risk data, and using AI and other predictive platforms, Insurtech firms can create personalised policies, detect fraudulent claims whilst also managing risk.
  • Blockchain technology. As an immutable ledger, blockchain technology can be used to ensures transparency and security in policy issuance, claims verification, and fraud prevention by providing a decentralised and tamper-proof record of all actions and transactions made.
  • Internet of Things (IoT). Smart devices, such as telematics in vehicles and wearable health monitors, provide real-time data that help insurers adjust pricing and offer proactive risk management by automating the data collection process, limiting reliance on human and the chances of human error.
  • Cloud Computing. Cloud computing facilitates scalable access to storage and computing power, as well as real-time access to insurance data and analysis, which can result in more efficient and cost-effective services.

 

Examples of insurtech services and coverage

These days, insurtech companies are offering a broad range of insurance products tailored to modern consumer needs. They include:

  • On-demand insurance, which allows customers to purchase short-term policies for specific needs, such as travel, rental cars, or gadgets.
  • Usage-based insurance (UBI), which is particularly common in vehicle insurance, where the model calculates premiums based on driving habits monitored via telematics.
  • Peer-to-peer (P2P) insurance, where groups of policyholders pool their premiums to cover claims collectively, resulting in reduced costs and increased trust.
  • Microinsurance, which is generally aimed at low-income populations and offers affordable coverage for health, agriculture, and life insurance.
  • Embedded insurance, which integrates insurance coverage into the purchase of other goods and services. A popular example is flight insurance, which can be included when purchasing airline tickets.

 

Insurtech is making inroads in developing countries

Insurtech is playing a crucial role in increasing insurance penetration in developing nations, where traditional models often fail to reach underserved populations. Noteworthy examples include the following:

  • Bima is amobile-based microinsurance platform that offers affordable health and life insurance to low-income individuals across 11 countries in Africa, Asia, and Latin America. It partners with telecom companies and insurance companies to provide life, health and accident insurance coverage, among others, via mobile phone.
  • Pula is a Kenyan-based Insurtech firm that provides agricultural insurance and digital products to help smallholder farmers endure yield risks and improve their farming practices. It uses data analytics and satellite imaging to provide farmers with insurance against climate risks, ensuring financial stability in case of droughts or floods.
  • Coverfox boasts of being the largest insurtech platform in India, which serves as an online aggregator that simplifies insurance comparison, purchase, and claims processing, making insurance more accessible to India’s vast population.

 

Conclusion

Without a doubt, insurtech is revolutionising the insurance industry by making it more accessible, efficient, and cost-effective. By leveraging AI, blockchain, IoT, and big data, insurtech firms are overcoming the limitations of traditional insurance models, particularly in developing economies. As digital penetration continues to rise, insurtech will play an even more crucial role in enhancing financial inclusion and providing customised insurance solutions worldwide.

 

 

Image credit:  Gerd Altmann (Pixabay)