The insurance industry continues to be a hotbed of innovation, with activity driven by growing demand for digitalization and personalization. With the growing importance of technologies such as telematics, machine learning, big data, deep learning, and data science, insurers are overcoming demographic challenges, low penetration rates, cybercrimes and fraudulent claims. In the last three years alone, there have been over 11,000 patents filed and granted in the insurance industry, according to GlobalData’s report on Innovation in Insurance: Insurance pricing automation. Buy the report here.
However, not all innovations are equal and nor do they follow a constant upward trend. Instead, their evolution takes the form of an S-shaped curve that reflects their typical lifecycle from early emergence to accelerating adoption, before finally stabilising and reaching maturity.
Identifying where a particular innovation is on this journey, especially those that are in the emerging and accelerating stages, is essential for understanding their current level of adoption and the likely future trajectory and impact they will have.
90 innovations will shape the insurance industry
According to GlobalData’s Technology Foresights, which plots the S-curve for the insurance industry using innovation intensity models built on over 65,000 patents, there are 90 innovation areas that will shape the future of the industry.
Within the emerging innovation stage, property maintenance sensor networks and automated data annotation are disruptive technologies that are in the early stages of application and should be tracked closely. Fall detection sensing alarms, vehicle motion estimation, and building design risk analysis are some of the accelerating innovation areas, where adoption has been steadily increasing. Among maturing innovation areas are trip metering-based insurance and real-time fault monitoring systems, which are now well established in the industry.
Innovation S-curve for the insurance industry
Insurance pricing automation is a key innovation area in insurance
An insurance pricing model determines the amount a customer pays in premiums, which determines the insurer's revenue and profitability. Insurance pricing automation results in tailored products and lower prices, as well as more versatile and customized insurance services, such as premiums that automatically adjust in accordance with client health and accidents, as well as on-demand pay-as-you-go insurance. AI-based technology also simplifies customer interactions with insurance providers, which increases the likelihood that more people will buy insurance.
GlobalData’s analysis also uncovers the companies at the forefront of each innovation area and assesses the potential reach and impact of their patenting activity across different applications and geographies. According to GlobalData, there are 160+ companies, spanning technology vendors, established insurance companies, and up-and-coming start-ups engaged in the development and application of insurance pricing automation.
Key players in insurance pricing automation – a disruptive innovation in the insurance industry
‘Application diversity’ measures the number of different applications identified for each relevant patent and broadly splits companies into either ‘niche’ or ‘diversified’ innovators.
‘Geographic reach’ refers to the number of different countries each relevant patent is registered in and reflects the breadth of geographic application intended, ranging from ‘global’ to ‘local’.
Patent volumes related to insurance pricing automation
|Company||Total patents (2010 - 2022)||Premium intelligence on the world's largest companies|
|State Farm Mutual Automobile Insurance||235||Unlock Company Profile|
|SoftBank Group||182||Unlock Company Profile|
|Ping An Insurance (Group) Company of China||163||Unlock Company Profile|
|Memjet Technology||159||Unlock Company Profile|
|Hartford Financial Services Group||99||Unlock Company Profile|
|Rpx||90||Unlock Company Profile|
|Allstate||84||Unlock Company Profile|
|American Express||82||Unlock Company Profile|
|CME Group||80||Unlock Company Profile|
|USAA||76||Unlock Company Profile|
|PayPal Holdings||68||Unlock Company Profile|
|Bank of America||58||Unlock Company Profile|
|Toronto-Dominion Bank||56||Unlock Company Profile|
|Expanse Bioinformatics||52||Unlock Company Profile|
|Swiss Reinsurance||48||Unlock Company Profile|
|Visa||43||Unlock Company Profile|
|Taikang Insurance Group||40||Unlock Company Profile|
|Experian||37||Unlock Company Profile|
|Prudential Financial||37||Unlock Company Profile|
|Swiss Re Asia Pacific||34||Unlock Company Profile|
|Accenture||32||Unlock Company Profile|
|Ant Group||31||Unlock Company Profile|
|Moody's||31||Unlock Company Profile|
|Discovery||30||Unlock Company Profile|
|Island Intellectual Property||29||Unlock Company Profile|
|Equifax||28||Unlock Company Profile|
|JPMorgan Chase||28||Unlock Company Profile|
|SAP||27||Unlock Company Profile|
|Intuit||26||Unlock Company Profile|
|Discovery Holdings||26||Unlock Company Profile|
|Goldman Sachs Group||25||Unlock Company Profile|
|International Business Machines||24||Unlock Company Profile|
|CoreLogic||24||Unlock Company Profile|
|Cognizant Technology Solutions||24||Unlock Company Profile|
|Virtu Financial||24||Unlock Company Profile|
|China Investment||23||Unlock Company Profile|
|Addepar||21||Unlock Company Profile|
|Guidewire Software||20||Unlock Company Profile|
|Aon||20||Unlock Company Profile|
|Clearlake Capital Group||20||Unlock Company Profile|
|Alera Group||19||Unlock Company Profile|
|UnitedHealth Group||18||Unlock Company Profile|
|Marsh & McLennan Companies||18||Unlock Company Profile|
|LyondellBasell Industries||17||Unlock Company Profile|
|NEC||17||Unlock Company Profile|
|Uber Technologies||17||Unlock Company Profile|
|DXC Technology||16||Unlock Company Profile|
|Mastercard||16||Unlock Company Profile|
|Ameriprise Financial||15||Unlock Company Profile|
|Sumitomo Mitsui Financial Group||15||Unlock Company Profile|
Source: GlobalData Patent Analytics
State Farm Mutual Automobile Insurance is a leading patent filer in insurance pricing automation systems. Their solution involves using a mobile device to provide data to a remote computer, enabling automatic motor insurance pricing. The method includes collecting vehicle operation data through a mobile device while the device is in use in an operating vehicle and transmitting the collected data. This data is then received by a remote computer or server, stored in a database, and used by a rating engine to calculate the cost of a vehicle insurance policy, based on the gathered data, which helps to provide personalized insurance coverage to customers. Some other key patent filers in insurance pricing automation are SoftBank Group, Ping An Insurance, Memjet Technology, Hartford Financial Services Group and Rpx.
In terms of application diversity, Expanse Bioinformatics leads the pack, with Memjet Technology and State Farm Mutual Automobile Insurance in the second and third positions, respectively. By means of geographic reach, Discovery holds the top position, followed by NEC and Swiss Re.
To further understand the key themes and technologies disrupting the insurance industry, access GlobalData’s latest thematic research report on Insurance.