InsurTech - Digitalization in Insurance

Blockchain in insurance

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Digitalization of insurance companies

2024

Global Digital Insurance Market Hits $15.56 Billion in a Year

In 2024, costs in the global digital technology market in insurance (Insurtech) amounted to $15.56 billion. Almost half of this amount fell on the North American region. Such data are provided in the Fortune Business Insights review published on April 22, 2025.

InsurTech involves combining classic insurance and modern technology. These can be machine learning and artificial intelligence tools, cybersecurity developments, big data analytics, blockchain, cloud computing, the Internet of Things, etc. Digital technology serves to automate a variety of processes, such as underwriting, claims management, and customer service, in order to improve operational efficiency and reduce costs for insurers.

One of the main drivers of the market is AI. Such algorithms are able to analyze the behavior and profile of customers to determine their needs. Using habits and preferences data, AI predicts the likelihood of insurance claims and offers personalized insurance schemes. This helps companies avoid underestimating or revaluing risks, which improves pricing accuracy and profitability. In addition, AI systems analyze information about demand and market trends, which helps in optimizing insurance services. AI predicts the effectiveness of various distribution channels, allowing you to build the best sales schemes in a particular industry. AI tools automate routine tasks, improving the accuracy of damage assessment and minimizing human error. AI is able to detect signs of fraud in a timely manner and prevent unreasonable payments. Artificial intelligence is also used to predict future trends and possible changes, whereby insurance companies can make more informed decisions. Overall, insurers are increasingly relying on AI, data analytics and automation to deliver more personalized and efficient services.

Fortune Business Insights points to the development of built-in insurance: this model assumes that insurance is offered as part of or along with another product or service. The transition continues to a comprehensive digital platform with a focus on fully automated processes - from issuing policies to processing claims. This eliminates paperwork, reduces administrative costs and accelerates service delivery.

The authors of the study segment the market into AI and machine learning, blockchain, the Internet of Things, big data and analytics, cloud computing, robotic process automation, etc. In 2024, the first of these sectors provided the largest share of revenue - 24%, or $3.73 billion. Geographically, North America dominates, accounting for $7.41 billion. Globally, the following are named major players:

• NTT Data;
• Hexaview Technologies;
• InsureMO;
• Damco Group;
• DXC Technology;
• Insurance Technology Services;
• Majesco;
• Oscar Insurance;
• Quantemplate;
• Shift Technology;
• Wipro Limited;
• ZhongAn Insurance;
• Acko General Insurance;
• Metromile;
• Alan;
• Luko;
• Benevolent;
• Evari;
• Brolly;
• Vouch Insurance.

Fortune Business Insights estimates that going forward, the Compound Percentage CAGR in the InsurTech market will be around 26%. As a result, by 2032, spending worldwide could rise to $96.1 billion.^[1]

10 trends in insurance digitalization

Digitalization plays an important role in the field of insurance. The integration of artificial intelligence, blockchain, the Internet of Things (IoT) and advanced data analytics helps solve complex problems as well as improve the quality of customer service. The Scribble Data review, citing PwC data, which TAdviser got acquainted with in mid-November 2024, identified 10 key trends in InsurTech (information technology and digitalization in insurance).

1. Built-in insurance

It is about integrating insurance directly into products or services. This model goes beyond the traditional point-of-sale insurance offering. In fact, insurance becomes an integral part of the purchase process for the client, and not a separate transaction. This approach improves customer experience. In addition, more accurate risk coverage is provided: since insurance is built into the product, it can be tailored to specific situations. For example, when a customer purchases a new smartphone, insurance may be included in the price against damage to the device when dropped.

10 trends in insurance digitalization

2. Software Interfaces () API and Digital Ecosystems

Such platforms provide uninterrupted data exchange and cooperation between insurers, technology companies and other service providers, which allows you to create comprehensive and more personalized insurance solutions. Implementing a cloud-based architecture, APIs, or microservices provides insurers with flexibility and agility.

3. Self-Service Portals

Research suggests that the number of people wanting to change their insurer due to the lack of a convenient client portal has risen sharply. In response, the vast majority of insurers offer policy management capabilities through special services, and custom insurance applications become one of the main channels of interaction with customers. These self-service platforms are becoming increasingly complex, offering features such as customized dashboards, electronic signatures, and integrated knowledge bases.

4. Advanced process automation and virtualization

Digital twins are revolutionizing risk assessment and claims management in the insurance sector. Such virtual copies of real-world environments provide insurers with a comprehensive view of assets, enabling them to predict future challenges and develop effective response plans. In claims management, digital doppelgangers provide an opportunity to conduct more accurate and cost-effective assessments, helping insurers inspect damage without being physically present at the scene.

5. AI for predictive analytics and underwriting

AI and machine learning algorithms allow insurers to analyze vast amounts of data from a variety of sources, including wearables and social media, to create more accurate risk profiles. As a result, companies can predict the likelihood of claims, identify fraud schemes, and even anticipate customer needs.

6. Improvements in cybersecurity risk assessment

The digital transformation of enterprises in all sectors has significantly increased their vulnerability to cyber threats: on the one hand, this creates problems, on the other, opportunities for the insurance industry. In such a situation, insurers are developing increasingly sophisticated cybersecurity risk assessment tools, using AI and machine learning to identify vulnerabilities, predict potential threats and develop scenarios to minimize damage. These advanced tools go beyond traditional risk assessment methods, analyzing patterns in customer data and claim history to detect potentially fraudulent activities with the highest accuracy.

7. Robotic Process Automation (RPA)

We are talking about the use of intelligent software to carry out resource-intensive and repetitive tasks, which usually take up a lot of time for people. Bots can enter data, process transactions, and service routine customer requests much faster and with fewer errors than regular employees.

8. Voice Insurance Management Technologies

It is expected that such funds will significantly improve the quality of customer service. Users will be able to access and modify their policies using voice commands, reducing the need for complex online navigation or phone calls. Voice systems will allow you to quickly report claims and receive immediate responses to insurance requests.

9. Low code/no-code technologies

These tools help organizations build and implement applications without extensive programming knowledge. As a result, insurers can receive significant savings in the development and maintenance of software platforms.

10. Drones and robotic insurance technology

Drones are increasingly being used to carry out aerial surveys of properties, forming detailed images and gathering information for more accurate risk assessments. After natural disasters or accidents, drones can quickly survey damaged objects, providing insurers with comprehensive visual data. The use of drones and robotic systems improves security, reduces costs and ensures more efficient detection of fraud.^[2]

How much do Russian insurance companies spend on digitalization

Russian insurance companies spend up to 10% of the total collected premiums on digitalization. This became known in mid-September 2024. In absolute terms, this amounts to up to ₽230 billion annually. The main expenses are aimed at the development of electronic services, ensuring information security and the import substitution process.

According to data collected by analysts from Expert RA and the Reksoft technology group, the Russian insurance market is largely focused on introducing advanced IT solutions, which allows companies to successfully compete in the market and retain customers.

Russian insurance companies spend on digitalization

According to Kommersant, the study, which covered 50% of the market, showed that on average companies spend from 5% to 10% of their premiums on IT infrastructure. Amid high competition, insurers are actively investing in mobile applications, artificial intelligence and voice assistants, as well as predictive systems. According to Konstantin Smirnov, Commercial Director of the Department of Analytical Solutions at KORUS Consulting, about 30% of companies consider the creation and development of ecosystems to be the most important area for improving their efficiency.

A lot of attention is paid to information security - this industry stores significant amounts of personal data of customers, which makes protection against leaks and cyber attacks a priority for insurers. The main IT budget expenditures include the purchase of equipment, remuneration of internal developers and support for corporate information systems. Under the conditions of sanctions pressure and the need for import substitution, companies are forced to increase the cost of developing their own solutions and increasing the staff of IT specialists.

In addition, the cost of digitalization of insurance companies increases annually. According to AlfaStrakhovanie, in 2024 the growth of IT costs amounted to about 10-15%, and this trend is expected to continue. Market participants predict an increase in IT budgets by 10-20% in the coming years, which is associated with the need to maintain and develop already implemented IT systems.^[3]

NSIS will launch a system for identifying the facts of double insurance

JSC "National Insurance Information System" (NSIS, operator of AIS Insurance) will launch a system for identifying the facts of double insurance carried out for the purpose of fraud. This was announced on June 4, 2024 by the head of the company Nikolai Galushin. Read more here.

How digitalization is taking place in Russia in the settlement of insurance claims

In April 2024, Rosgosstrakh spoke about the peculiarities of digitalization in the settlement of insurance events, as well as the difficulties faced by insurance companies in the implementation of such projects.

According to Arman Gasparyan, head of the Rosgosstrakh IC Loss Settlement block, insurance companies need to solve three main problems as part of the digital transformation of their business:

Rosgosstrakh spoke about the peculiarities of digitalization in the settlement of insurance cases

• Improving the quality of decision-making, as digital technology allows you to more accurately determine the amount of insurance coverage to be paid and helps avoid disputes with customers, as well as identify fraudsters through scoring models;
• Optimizing internal costs by automating, reducing errors, and using electronic document management
• development of client experience. According to a McKinsey study, the potential for increased customer satisfaction (so-called CSI or Customer Satisfaction Index index; it shows the degree of customer satisfaction with the company) when introducing digital technologies in insurance can be up to 20%.

Gasparyan notes that Rosgosstrakh recorded a 25% increase in the CSI indicator in 2023 in the settlement of insurance claims, which was largely facilitated by the use of information technologies. According to the top manager, almost a third of insurance claims on Casco will be settled completely along the digital path in Rosgosstrakh. However, at different stages of this process, the level of digitalization may differ significantly for a number of reasons.

Arman Gasparyan says that effective digitalization tools in resolving losses are the Internet of Things, preventive information mechanisms, integration with external databases, the creation of predictive event models based on Big Data analysis and the formation of a client path depending on the client's digital profile.

Gasparyan notes that digitalization is possible at 90-100% of the stages of settlement of insurance claims, but there are some restrictions related to the level of technology development. for example, for the initial stage - filing an application for an insurance event - the quality of the mobile Internet and the age of the client can be a problem. In the case of the most difficult stage for digitalization - inspection of a damaged vehicle - the limiting factors will be hidden damage and weather conditions (lighting, street dirt, etc.).

The complexity of digitalization of the stage of recognizing an event as an insured event, according to the representative of Rosgosstrakh, may be due to the fact that checking an event requires a huge number of options to be included in the algorithm, and integration with a large number of external resources (for example, traffic police bases, BKI, FSSP, etc.). In addition, the need to control the avoidance of fraudulent schemes forces the insurer to limit the limit of payments in a digital settlement to a certain amount, Gasparyan continues.

He associated the difficulties of digitalization of the stage of calculating the cost of repair with the quality of self-inspection and the level of development of artificial intelligence that recognizes damage and documents on photography. Finally, for digital recording to the auto maintenance and repair control station, the main limitation is the involvement of partners in the process. It is easiest to digitalize the last stage - the formation of an insurance act and the implementation of an insurance payment, added a top manager of Rosgosstrakh.

2023

The volume of the global AI technology market in insurance for the year increased by a quarter

At the end of 2023, the costs in the global market for artificial intelligence technologies in insurance reached $5.87 billion. This is about a quarter more compared to 2022, when expenses in this area were estimated at $4.74 billion. Such data are given in the Market Research Future study, the results of which were published at the end of November 2024.

The report said the sector in question was experiencing significant growth driven by increasing demand for effective risk management and personalized customer experience. Integrating AI technologies into insurance processes helps companies streamline operations, reduce costs, and expand decision-making capabilities.

Another market driver is the constant increase in the volume of information generated. AI-based solutions can analyze vast amounts of data, including insights into human behavior and medical records, allowing personalized insurance plans to be offered. This approach not only increases customer satisfaction, but also promotes brand loyalty, which is crucial in the competitive insurance sector. In addition, advances in machine learning and predictive analytics help insurers better assess risks and prevent fraud.

AI algorithms also allow organizations to automate claims processing. Usually such operations are time-consuming; in addition, human error may occur. By integrating AI technologies, insurers can optimize these processes by significantly reducing resource costs and increasing overall operational efficiency. Automated systems can quickly evaluate applications as well as make decisions with minimal human intervention. As a result, customer service is accelerated. However, the introduction of AI into underwriting processes allows insurers to analyze a variety of data sets, providing a more complete understanding of the risks.

In 2023, North America became the leader in the global AI technology market in insurance with an estimate of $2.35 billion. This is followed by Europe with costs of $1.5 billion, and the Asia-Pacific region closes the top three with an indicator of $1 billion. South America contributed $0.5 billion, and the Middle East and Africa contributed a little more than $0.5 billion. The key players in the industry in question are:

• Next Insurance;
• Shift Technology;
• Tractable;
• Zebra Technologies;
• Pathmatics;
• Accenture;
• Microsoft;
• Amazon;
• Lemonade;
• IBM;
• Clearcover;
• Salesforce;
• Cognizant;
• Metromile;
• Google.

Among the main applications of AI in insurance, the authors of the study highlight fraud detection, underwriting, claim processing and risk assessment. The first of these areas in 2023 accounted for $1.88 billion: the need to minimize losses stimulates investment in AI solutions that can quickly analyze patterns and detect anomalies associated with fraudulent actions. Underwriting brought in $1.57 billion, processing claims - about $1.77 billion. Another $0.65 billion amounted to revenue in the direction of risk assessment.

In 2024, expenses on the global AI technology market in insurance are estimated at $7.26 billion. Market Research Future experts predict that in the future the CAGR (average annual growth rate in complex percentages) will be 23.77%. As a result, by 2032, costs on a global scale could rise to almost $40 billion.^[4]

Insurance companies in Russia obliged to introduce new software to switch to new reporting standards

As of the end of 2023, less than half of Russian insurers were able to develop or purchase software necessary to maintain calculations and accounting under IFRS 17. The introduction of the new reporting standard is accompanied by a number of difficulties, as stated in a study by the B1 group of companies, the results of which were published on December 14, 2023.

The survey involved more than 25 companies specializing in various types of insurance, organizations that are part of large banking groups, and independent market participants. It is said that the transition to IFRS 17 requires the introduction of new software. However, by the date under consideration in Russia there are problems with obtaining the necessary software, high prices for it, as well as the lack of interest of market participants.

About a third (34%) of insurance companies reported that in the current situation they could not decide on the choice of settlement and accounting solutions. Another problem is the need to allocate a significant budget for the project for the implementation of IFRS 17 - this was also indicated by every third respondent. At the same time, 53% of respondents estimated the budget for the implementation of the new standard over 60 million rubles.

It is said that by the end of 2023 in large insurance organizations with fees of more than 50 billion rubles, the average percentage of completion of work on the transition to IFRS 17 exceeds 50%. In companies with fees of less than 15 billion rubles, the figure is less than half.

An analysis of foreign experience in the transition to IFRS 17 shows that a year before the date of the first application of the standard, the bulk of companies were in the active phase of implementing IT solutions. Exactly a year remains until the date of the first application of the standard on the Russian market - January 1, 2025. Thus, the companies do not have much time to complete projects to switch to IFRS 17 and IFRS 9, - said Tatyana Samsonova, partner of the B1 group of companies.[5]

Developed digital platform "Агростраховка.рф" for farmers

Agroholding "Delivery by Sea" on July 21, 2023 presented the Агростраховка.рф platform for farmers with the support of the Ministry of Agriculture. The program allows you to insure a large list of crops and perennial plantings. Moreover, it will contribute to the development of framework relations between farmers and large buyers of their products. Read more here.

2022: A robot for automatic settlement of insurance claims began to be used in Russia

In Russia, a software robot for automatic settlement of claims in the field of insurance began to be used. We are talking about the development of "Innoseti," which was launched on the flagship platform of the company "Tsunami." This became known at the end of August 2022. Read more here.

2021

40% of insurance companies are present on 10 or more marketplaces

The SDI360 Digital Audit Agency and the Выберу.ру financial marketplace have studied how actively insurance companies use marketplaces for sales and what products they place there. The results are presented in a study of the digital maturity of the insurance market SDI360 with the support of the general partner of the digital integrator D'Terra. This was announced on September 19, 2022 by the Выберу.ру company.

At the end of 2021, the volume of online sales of insurance companies on marketplaces increased by 50%. The main reason for the growth is the overflow of the audience to online platforms. About a third of consumers on the market are ready to change the insurance company and look for more profitable offers on the Internet. When choosing an insurance policy on the marketplace, the savings can be several thousand rubles.

The digital maturity study evaluated the presence of insurance companies on 11 of the largest marketplaces and online aggregators. They are used by 26 companies out of 30. 12 are presented at 10 or more sites. 8 insurers use all marketplaces: SOGAZ, Rosgosstrakh, VSK, Renaissance Insurance, Consent, Tinkoff Insurance, MAKS and Zetta Insurance.

Most products on marketplaces are placed by Renaissance Insurance, AlfaStrakhovanie and Zetta Strakhovanie. OSAGO is the leader in the number of placements: 108 products in total at B2C sites, 131 at B2B.

B2C-platforms

B2B-platforms

The leaders of the overall rating of digital maturity are:
1st place - "Ingosstrakh" (295 points, of which 100 in the online sales category).
2nd place - VSK (270 points, 110 of them in the online sales category).
3rd place - AlfaStrakhovanie (260 points, 90 of them in the online sales category).

The rating was formed from 30 non-life segment insurance companies. It was estimated that there was an opportunity to purchase the company's product on the marketplace or leave an application for registration there at the time of the study (from July 15 to July 30, 2022). B2C-Marketplaces ("Выберу.ру," Sberbank marketplace), B2B resources (Polis.online, Pampadu, "PKASKO," Inssmart) and complex B2C/B2B platforms ("Compare," "Банки.ру," Mafin, Cherehapa, "Financial Services") were chosen as insurance online platforms.

Among the key reasons for the growth in sales on insurance marketplaces and aggregators is the increase in the number of users: both direct customers and agents. Platforms are actively promoting not only their own brands, but also the very idea of ​ ​ online comparison and choice of insurance products in one place. Search engines prefer sites with a large range of products. Agents began to use online services more often, since it is convenient from the point of view of automation of manual processes and provides additional opportunities, - said Grigory Burdenko, General Director of the financial marketplace "Выберу.ру."

Online sales are one of the three key blocks in our methodology for assessing the level of digital maturity. In addition to the representation of insurance companies on marketplaces, we assessed the possibilities of choosing products on the insurance company's website, the quality of the online questionnaire, as well as payment and delivery services. The results of our rating show that leaders really sell more online than outsiders, "added Aleksei Romanov, managing partner of the SDI360 Digital Audit Agency.

Experts from Vinci Agency (Vinci Digital Agency), Ashmanov and Partners, Sidorin Lab, Salo and Medialogia also took part in the study of the digital maturity of SDI360 insurance companies.

Insurance payments for risks associated with ransomware viruses in the world increased by 4 times

According to Cybercrime magazine, the global damage programs extortioners from the end of 2021 will reach $20 billion, while back in 2015 this figure was $325 million. The amount Attacks viruses of money added to enterprises in the world occurs every 11 seconds. The pandemic played an important role in this, coronavirus which provoked a sharp increase in the use of online services. This became known on November 23, 2021.

Everyone who could went remote operation, to and behind this is the use of home networks, the connection of other devices to workers - to computers the risks of cyber attacks have grown. Many say that 2020 and 2021 will be remembered not only because of the pandemic in the system, health care but also the cyber risk pandemic, a digital pandemic associated mainly with ransomware viruses, - said the head insurance financial of the risk department. AIG JSC Igor Chichkan

According to him, over the past year and a half, average insurance payments for risks associated with ransomware viruses in the world have increased 4 times, and the number of Internet attacks is growing from quarter to quarter. All this led to a surge in demand for insurance.

There is a huge imbalance in the global cyber risk insurance market: both demand and losses are growing. This negatively affects the appetites of insurers, - commented Chichkan, - Insurance capacities have dropped sharply, and premiums have increased in order to somehow compensate for the difference between fees and payments. Globally, cyber risk insurance for many companies over the past two years is likely to be unprofitable.

In some cases, tariffs rise by 50% or more. In addition, insurers around the world began to exclude risks associated with ransomware viruses from contracts, as well as switch to co-insurance conditions, when the client himself pays half of the loss.

Those customers who have just thought about cyber risk insurance are faced with a lack of supply from insurers, a small amount of coverage and high tariffs, - said the head of the financial risk insurance department of AIG JSC.

The underwriting system began to play a critical role for insurance companies. There is now a growing demand worldwide for new and innovative ways to assess and manage cyber risks, according to AIG's global director of underwriting Lex Baugh. Specifically, Baugh expects AIG and underwriters to rely more "on externally acquired data that will provide insights into cybersecurity systems and potential customer vulnerabilities."

These are two different universes, parallel worlds, - said Igor Chichkan. In America, cyber insurance appeared 25 years ago and evolved. Right now, personal cyber risk insurance is gaining momentum there. It is wider than bank insurance and covers the risks of personal data leakage, the failure of a home computer, the Internet and smart devices as a result of attacks.

The main driver of the growth of cyber insurance in Russia is contractual obligations. For companies working with foreign contractors, having a policy is often a prerequisite. Companies purchase insurance limits that are required under the contract, as a rule, these are amounts in the amount of $1 million to $10 million.

Russian customers have not yet matured the internal need for cyber risk insurance. The lack of budgets for this, together with limited limits and the growth of insurers' premiums, do not contribute to the development of this market segment. Many of our customers argue in the spirit of "we will spend better on IT security than on buying an insurance policy. I think that even in a situation of high costs for IT security, it is worth providing for a certain budget for cyber risk insurance, since in the event of an unfavorable development of the situation, it will help mitigate the consequences, the expert summed up.

Most insurers favor traditional communication channels

On January 18, 2021, TWIN presented a study of the most common communication channels in Russian insurance companies.

The Russian insurance companies prefer traditional calls and rarely use messengers them to communicate with customers.

Analysts of the TWIN dialogue platform studied the communication channels used by 9 Russian insurance companies (IC). Experts found out what methods of communication are available to customers on the websites of service providers, and also assessed the waiting time for the operator's response and the convenience of services. The study included platforms that offer a service for issuing an electronic auto insurance policy (e-OSAGO).

Most companies (89%) provide the client with the opportunity to independently contact the insurance service by phone - the call center number is indicated on the website. Only 67% uses the phone number "8-800" for this - it allows the client to make incoming calls for free, regardless of the region of residence and the operator's tariff. Also, all SCs included in the study offer an interactive voice menu (IVR) option that simplifies call routing in the call center.

At the same time, only 22% of companies provide customers with a short extension for communication - most do not have such an option.

TWIN experts also found out how much time it takes on average for a client to wait for an operator to answer during a call. The best result was demonstrated by Zetta Insurance, which took only 37 seconds to process the request. Overall, the average waiting time for a response in insurance companies was 2.1 minutes. The record maximum while waiting for the operator's response was 9 minutes 12 seconds - it took Renaissance Insurance so long to connect the client with the operator.

The study also found that most insurance companies prefer traditional communication channels - other options are less common. Thus, 55% of the UK processes customer requests in the messenger, Facebook 45% - in, and Vkontakte 22% of companies use for communication. social network Schoolmates

Messengers as a communication channel with customers are used even less often: 11% offers a communication option in Telegram, and none of the nine companies provides a contact number for communication in Viber and WhatsApp. At the same time, according to statistics, the most popular messengers in Russia in terms of the number of installations and active users are just WhatsApp and Viber. Communications in instant messengers and social networks on the insurance company's website are also rare - so far none of the nine UK has connected such an option.

The TWIN study points to the conservative approach of Russian insurance companies to communications with customers - most still use traditional channels and do not experiment with other formats. At the same time, the demand for mobile telephony in Russia is steadily decreasing - people are increasingly preferring instant messengers both for making calls and for exchanging messages.

2020:90% of large insurance companies prefer a call to a customer as the main way to communicate

SDI analytical consulting agency on December 7, 2020 provided a report on the results of a study of the level of digital maturity among the leaders of the Russian insurance market. In 2020, 90% of companies still use mobile communications as the main way to communicate with the client, despite the increase in the activity of the Internet audience, according to the report.

2020 allowed global business to change its approach to implementing marketing strategies. Active communication with the client through digital channels has become not only a panacea in the crisis period, but also opened access to online sales for those whose business processes are associated only with offline activities. Nevertheless, the results of the study show that despite the general growth of the audience on the Internet and, as a result, the growth of online transactions (1.7 trillion rubles), interaction with the consumer on the network is not a priority for insurance companies.

"The overall level of digital maturity of Russian insurers remains quite low, in our opinion, this is due not only to small investments in the development of digital interaction with the consumer, but also to difficulties in resolving losses online. Most companies still offer customers to come to the office in person, this limits the possibilities for scaling the business, "says Alexander Kuksa, co-founder of SDI.

Only 10% of representatives of the Russian market have high digital activity - these are large federal companies. According to experts, regional players from the SME segment cannot yet compete in this indicator with market leaders. The representation of insurance companies on the Internet remains limited, and the online presence is 99% reduced to sales of OSAGO or VZR (insurance of persons traveling abroad). Other products are sold through other channels: for example, through partners, including banks, car dealerships, brokers and agents. In turn, sales of insurance companies by their own channels do not exceed 10-15%.

The study also found that approximately 90% of companies in 2020 still prefer to interact with the target audience through phone calls and only 11% provide an opportunity for the client to contact via chat messenger. According to experts, since the beginning of the pandemic, only 6% of companies have opened a courier delivery service for insurance products.

"Russia's Internet audience is 79% of the country's population. Without adapting services for mobile devices, companies cannot fully interact with their customers now and will not be able to in the near future. Kuksa noted. "Insurance companies do not want to turn into impersonal backoffice food factories, so growing the share of direct sales is a strategic goal for many large players, which means that online activity is expected to grow, because this is the easiest and cheapest way to be close to the client."

In 2020, Ingosstrakh, Consent and Renaissance Insurance became the leaders in the SDI360 ° rating.

2019: The level of digitalization in more than 30% is estimated by 37% of insurance companies

Insurance companies in Russia are quite optimistic about the level of their digitalization. Thus, the level of digitalization of its activities is estimated at more than 30% by 37% of insurance companies in Russia.

This was announced in June 2019 by the head of the Department of Insurance and Economics of the Social Sphere of the Financial University under the Government of the Russian Federation Alexander Tsyganov at the second all-Russian scientific and practical conference "The first results and drivers of the further development of digitalization of the insurance market in the Russian Federation"^[6].

As Alexander Tsyganov told with reference to the research data of the Department of Insurance and Economics of the Social Sphere of the Financial University under the Government of the Russian Federation, almost all insurance companies today use the technology of "internetisation of business processes" (93% of respondents). Half of insurers claim to use big data technology (57%) and new manufacturing technologies (47%). Wireless technology uses 40% and artificial intelligence technologies of 30% of insurers.

Other new digital technologies listed in the program of the Government of the Russian Federation "Digital Economy," including blockchain technology, according to Alexander Tsyganov, are practically not used by insurers.

"Insurers who took part in the survey are quite optimistic about the level of digitalization of their activities (the ratio of business processes using new digital technologies to the total number of business processes). Thus, the level of digitalization of its activities over 30% is estimated by 37% of respondent insurers. At the same time, another 37% of insurers believe that their level of digitalization is in the range of 5-20%, "said Alexander Tsyganov.

As Alexander Tsyganov noted, a high share of online sales of insurance services, especially in the OSAGO segment, as well as the professional affiliation of the majority of representatives of insurers filling out questionnaires to IT departments, could have influenced the high assessment of the level of digitalization of their own activities.

Half of insurance companies as the main reasons for the low level of development of digitalization of insurance activities, according to Alexander Tsyganov, indicate the high cost of new digital technologies (50%); lack of demand for digitized insurance programs (47%); insufficient adaptation of digital technologies for insurance services (47%).

2018: CIO Ingosstrakh on TAdviser SummIT - about IT priorities in the insurance industry

At the TAdviser SummIT conference held on May 30, 2018 and bringing together a total of more than 600 participants, an open interview was held with Alexei Klepikov, Vice President for IT at Ingosstrakh. Answering questions from TAdviser editor-in-chief Alexander Levashov, he highlighted his vision of trends in digitalization, IT priorities in insurance and spoke about a number of projects in Ingosstrakh itself.

According to Klepikov, at present we can talk about three main trends in the field of digitalization:

• entry of technologies into the clouds, including the emergence of fully autonomous cloud DBMS that work without human participation, in particular Oracle 18c - a representative of a new generation of systems;
• artificial intelligence is a topic directly related to the first trend, since a person does not administer an autonomous DBMS, in addition - speech analytics, chat bots;
• using Agile methodologies on a large scale, it doesn't matter which ones - SCRUM, Kanban, etc.

Speaking about the latter, Alexey Klepikov noted that in Ingosstrakh itself, the use of Agile methodologies began in 2016. However, in 2018, after analyzing the results of the work, it became clear that the implementation of a more comprehensive approach was needed, and in April the implementation and use of the SAFe (Scaled Agile Framework) methodology began, which solves the problems of Agile scaling.

There will be a large increase in online sales of insurance products, partner programs, work with aggregators, and there will be new types of insurance - for example, drone owners, insurance of IT assets, - said the representative of Ingosstrakh, speaking about the impact of trends directly on the insurance industry.

Answering a question about IT priorities, Alexey Klepikov noted that there are business tasks and there are IT tasks that should support the business. Among the IT priorities for his company, he identified three main ones. The first is to create the fastest, most scalable IT infrastructure. And cloud technologies in this context provide great opportunities, in particular, when deploying test environments.

Online sales through digital channels, without the participation of agents, for Ingosstrakh today account for "a couple of percent," Klepikov said. Reaching new levels of digital business is very important for the company, he stressed, so in 2017 Ingosstrakh's website and mobile application were completely redesigned, and a new CASCO online insurance product was created without a visit to the office, when a remote inspection of the facility is carried out using a special mobile application IngoMobile.

The second important priority of the company's development is the full involvement of IT specialists in the processes of the business customer, which involves proactive proposals from the IT business. And in this context, the third priority is the creation of cross-functional teams for the purpose of implementing projects in order to eliminate situations of misunderstanding of business and IT.

During the interview, the topic of using outsourcing services was raised. The representative of Ingosstrakh stated that as of the end of May, the company has more than 340 IT specialists, and that a successful business requires the right adaptable combination of outsourcing and insourcing. This will ensure optimal time to market.

In conclusion, Alexey Klepikov focused on the fact that insurance is greatly transformed in the future, but, despite all the innovations, agency and partner networks "will never disappear."

The TAdviser SummIT conference was held in Moscow on May 30, 2018 and attracted more than 600 participants. The main topics of the event were to increase the efficiency of business and the state using digital technologies. Representatives of large customer companies and the public sector presented the best practices for using IT in their organizations, and IT solution providers presented their new developments. Within the framework of the plenary part and five thematic sections, more than 60 reports and public discussions were heard. The event was held in 5 halls of Digital October.

2017

Information security in banks and insurance companies (TAdviser and VMware study)

The company VMware presented in December 2017 the results of a study of the largest financial institutions conducted in conjunction with the TAdviser think tank. According to the report, more than half (52%) of banks insurance companies Russia and the CIS increased the budget for information security in 2016-17 due to the growth cyber threats and activity of malware. ^[1]

Main article TAdviser and VMware study

Actuarial Modeling Systems

Actuarial modeling - building mathematical models to predict insurance risks and calculate tariffs. Calculating insurance rates is a key task of actuaries in insurance companies, and the accuracy of these calculations directly affects the marginality of the business and the market share of insurance companies. Increased competition in some types of insurance (for example, in the CASCO market) encourages actuaries to look for new ways to improve the accuracy of tariff calculations. After all, those organizations that are the first to start calculating tariffs individually for each of the clients will receive a tangible competitive advantage.

To solve this problem, the Guild of Actuaries analyzed the solutions and industry experience of analytical software vendors, as a result of which experts from SAS were invited as organizers of the workshop.

As part of the practical seminar, SAS experts demonstrated to actuaries how modern methods of machine learning and building predictive models differ from traditional ones, in which situation it is better to use this or that approach and how to use PO SAS to simulate tariffs using algorithms.

Then, SAS consultants, together with actuaries, step by step solved the task of predicting losses under CASCO. In the process of solving, special emphasis was placed not so much on the principles of the algorithms, but on the process of creating predictive models based on them. When comparing various modeling methods, experts in detail revealed how the analyst's qualifications, requirements for the quality and process of data preparation, and assumptions about the statistical properties of the data affect the accuracy of the results. The second part of the workshop was devoted to the current trend of the Russian financial market - the use of additional data from external sources for customers, since practice shows that both in banks and in insurance, data from external sources (such as social networks or data from mobile operators) significantly increase the accuracy of decision-making systems. The effect is especially noticeable in business processes, where the amount of internal information on the client is small. How you can include the interests and life events of policyholders from social networks in the modeling process was clearly shown in a specific example using SAS text analytics technologies.

Insurance market trends in Russia

• Consolidation - more than 65% of insurance volumes are accounted for by the 10 largest insurers
• Nationalization - an increase in state participation in the capital of insurers and the impact on processes (creation of the Russian National Reinsurance Company)
• Activity of the mega-regulator - Central Bank of the Russian Federation
  • Transition to a new RAS chart of accounts - to IFRS
  • Work has begun to convert the insurance reporting system to the XBRL standard

• The formation of a field for electronic insurance sales is the adoption of amendments to the Federal Law "On Insurance." In fact - the transition to a paperless insurance system.
  • In 2016, this "new" sales channel in AlfaInsurance amounted to 2.3% of total fees and its growth rate is 2 times higher than the growth rate of the company's fees as a whole. From the ^[2]

• Since 2016, due to changes in the 40FZ "On OSAGO," insurance companies have the opportunity to sell OSAGO policies electronically.
  • Since 01.01.2017, this opportunity has passed into the responsibility and despite the general unprofitability of this type of insurance, insurance companies have increased the volume of eOSAGO sales by several times - from 2.2 billion in 2016 to ~ 21 billion in 2017 (forecast)
  • At one time, OSAGO became a driver for the development of retail insurance in Russia, eOSAGO has a serious chance to become a driver for the transition of insurance to electronic form
  • The requirements of the Central Bank for the on-line availability of information systems of eOSAGO insurers are such that are not imposed on on-line banking and other public financial services.

IT priorities of insurance companies

• Further expansion of electronic sales channels for retail types of insurance (V2S)
• The main focus of the insurer's work is the Client
  • Development of value-based individual proposals for the client, including the fight against fraud
  • Accordingly - analysis of its needs, behavior in the market and in everyday life
  • Active development of "heavy" analytical systems working with both traditional data sources and "big data" sources
  • Machine Learning and Artificial Intelligence Systems

• Customer's Quality of Service is the second important focus
  • Prompt and qualitative settlement of losses,
  • Value Added Services
  • Insurance cycling=> you need to build the right communications with the customer (unobtrusive reminders, easy payment)

• Expanding the use of Internet of Things (IoT) elements
  • "Black boxes" of telematics in cars - sources of data on both the behavior of the driver and his condition in an accident and the organization of quick assistance
  • Use of gadgets in medicine, telemedicine in voluntary medical insurance

• Use of information of current and future state sources of information through SMEV and/or UIAS
• Optimization of internal costs in insurers - maximum conversion of internal communications "to digital" ("Digitalization," acceleration of changes)

• Transition from the traditional approach in the development of "customer-IT development-system" to "customer (aka developer) - IT quality control-system" (BI, BRMS)
• Wide integration of systems, both with external services (external data sources, including BD, partner and regulator systems), and internally - the transition to API technology for the development of their systems, microservices.
• Increased speed of change implementation - new approaches to internal development and change implementation (Agile, DevOps)

New challenges

• Insurers (like bankers) began to appear competitors in their OWN field, primarily in electronic sales
  • Aggregators are companies that help customers find the best insurance conditions ("customer focus" function).
  • Payment services - "introduced" to us as a payment partner and gradually become aggregators.
  • Telecoms - using their client base, they can and are already starting to act as aggregators, and their potential is very high.

• To paraphrase G. Gref (SberBank) "If earlier it was just a feeling that it was scary, and these guys really start eating our lunch, now the problem for large companies is clearly defined."
• The only thing that so far saves insurance companies is that they not only sell, but also compensate for losses. But this loneliness is temporary.
• Over the horizon:
  • driverless cars (what to do with car insurance?)
  • "smart homes" - a complete change in property insurance of individuals
  • cyber risk insurance - forever
  • blockchain - possible transition to pear2pear insurance or mutual insurance societies

2012: Accenture Study

According to the Accenture survey, 91% of insurance industry analysts believe that the use of technology is critical to the activities of insurance companies. At the same time, more than half of them rate the current level of technology used by insurers as' low'or' in need of improvement '. Today, there are eight main trends that will determine the development of IT in the insurance industry over the next five years.

1. Data platforms that provide seamless access to information. Already, insurers have to work with large amounts of data, and in the future these volumes will grow exponentially. Data can be distributed to different internal and external storage locations in all regions of the world. Insurance companies are faced with the task of maximizing the distribution of existing arrays, including through cloud technologies, if the security and confidentiality requirements allow. Providing widespread instant access to data from any type of device will significantly increase the efficiency of insurers.

For Russian insurers, this trend becomes relevant primarily in the context of building integrated information environments, within the framework of which interaction with partners (brokers, agents, STOA, LPU, AK, NAEB) and customers is carried out. The ability to effectively use information within such information ecosystems allows, on the one hand, to reduce the cost of operational interaction with partners, and on the other hand, to significantly increase the speed and quality of customer service.

2. Analytics tools to improve the efficiency of business processes and better understand customer needs. The customer knowledge provided by predictive analytics is especially important in the face of ever-changing customer preferences. Analytics significantly improves the effectiveness of marketing efforts, allowing you to offer the right products to the client at the right time, reducing the sales cycle and increasing cross-sales. Analytics tools facilitate the implementation of new products. Predictive and behavioral analytics allows you to predict what response a particular product will receive from customers. In the issue of settling losses, the use of analytics helps to diagnose cases of insurance fraud in a timely manner.

As around the world, in Russia there is a great need to use powerful analytical tools in insurance. The main complexity is the poor quality of the data in the source systems. It is not so common to see centralized, fully functional insurance systems that support online operations across the country. More often there are decentralized local installations associated with the periodic replication mechanism and having very ineffective protection against entering incorrect data. Another weak point of analytics in Russia is the lack of infrastructure services common to the entire insurance market, which make it possible to keep records and exchange key information on contracts, losses, etc. The creation of such services will make it possible to qualitatively increase the technological maturity of the market and provide an opportunity to optimize the costs of insurers.

3. Using cloud computing. Cloud computing in the insurance industry has not yet played the revolutionary role it has already played in other industries. The reason for this delay lies in the fact that insurers are often forced to use outdated IT systems that are not always easy to translate into clouds. However, the situation is gradually changing. Obviously, the most significant for insurers will be the use of cloud models of SaaS ('software as a service') and PaaS ('platform as a service'), which provide insurance companies with greater speed, flexibility and scalability, improve response and optimize processes, such as underwriting.

Cloud computing is not so common in the Russian insurance market. But it is clouds that can become the platform for creating the common infrastructure services mentioned above. For example, such services may be interesting in terms of preparing certain types of reporting. Today in Europe, difficult work is underway to form and implement Solvency II requirements and options are being considered in which a common platform will be created to calculate the set of indicators necessary to meet Solvency II requirements. Similar solutions may be interesting in the field of fraud prevention, as well as in terms of ensuring interaction between different market participants.

4. Use a service-oriented architecture instead of a server-oriented architecture. Overly costly and outdated systems are a major barrier to insurers building efficient business processes. To achieve their business goals, insurance companies will have to move from using a server-centric architecture to a service-centric architecture.

Today, the operations of Russian insurers are often supported by monolithic systems that combine the functions of configuring products, charging, accounting for contracts, accounting for receipts and payments, working with compensation payments, settling losses, reinsurance, as well as accounting and reporting. On the other hand, as the market evolves and there is a need for increasingly advanced functionality in individual areas, such as loss settlement and fee management, insurers will have the choice of developing this functionality within the existing monolithic system or buying separate specialized solutions and integrating them with the core system. To solve this problem, service-oriented architecture becomes an important factor.

5. Reflective IT security systems aimed at protecting the most vulnerable areas. The problem of protecting client data has always been in the spotlight of insurers, but now, due to tougher regulation and after a number of widely publicized scandals with data leaks, information protection has become one of the main priorities. As the volume of data grows, it becomes more and more difficult to ensure the proper level of security, and 100% data protection guarantees seem to be an unrealistic prospect. Under these conditions, it is more reasonable for insurance companies to take a selective approach to security, which allows for a differentiated level of protection for different datasets. To do this, insurers need to identify the most vulnerable areas and use technologies to ensure the security of processes, data and infrastructure. Companies are also advised to minimize the impact of the human factor, which is the main cause of leaks and security breaches.

As the application architectures of Russian insurers become more complex (the introduction of centralized systems, specialized applications and integration with partner systems), information security issues will become more and more relevant. Equally important will be aspects related to potential external threats, and problems associated with the possibility of data leakage due to malicious actions of employees of insurance companies themselves.

6. Risk-based approach to protecting sensitive data. As with security, it is almost impossible to guarantee 100% data privacy. However, any privacy violations can have serious consequences. Insurers need to identify the areas of greatest vulnerability and use a risk-oriented approach in working with customer data.

Data privacy issues began to take on special importance for Russian insurers with the adoption of Federal Law No. 152-FZ. Given Russia's accession to the WTO and the gradual tightening of requirements, including those related to working with personal data, Russian insurance companies will be forced to implement a set of measures (both infrastructure and organizational) aimed at protecting confidential data.

7. Social platforms as new opportunities for business analytics and channels of communication with customers. Consumers are increasingly willing to share their experiences with companies on social media. Insurers are taking advantage of this for their own purposes, actively expanding their presence on various social platforms, such as Facebook. The development of social media opens up potential opportunities to increase sales and improve the quality of customer service. Competent communication on social networks allows you to strengthen trust and establish direct contact between insurance companies and their clients.

Russian insurers are taking their first steps on social media. So far, it is difficult to judge the effectiveness of their presence on Facebook and other platforms. Today, this presence is usually limited to providing information. The market has not yet identified the most effective model for harnessing the potential of social media. However, given the rapidly growing popularity of social platforms and the increase in the amount of personal data voluntarily provided by users, interest in the use of social networks among insurers will increase.

8. Improving customer service through the use of mobile, video and gaming technologies. Business process design has always been designed for optimization and cost reduction. In the future, the main factor will be to ensure the best customer experience. Mobile technologies are the main area of ​ ​ development today. According to forecasts, by 2020 the number of mobile phones in the world will increase to 3 billion, and the number of transactions made using mobile devices - up to 450 billion. The proliferation of smartphones and tablets makes insurance companies think about how to use them in internal corporate interaction and in relations with customers. In addition, video and gaming technologies can be used in client service. Video technologies provide visibility, and through gaming applications you can inform customers about new products more efficiently than through advertising and other traditional communication channels.

Many Russian insurers already have mobile solutions that implement the functions of providing information about products, addresses of branches and settlement centers, loss notifications, etc. Obviously, the functionality and demand for these applications will only grow. Products that work on the pay as you drive principle and operate mobile technologies with support/may appear. GPSGLONASS If the GLONASS development program is implemented in full cars and an appropriate "black box" is installed without fail, insurers will be able to obtain a tremendous amount of information that can be used for more accurate charging, taking into account the nature of driving a car, as well as for more effective investigation of accidents and settlement of losses.

Each of the listed trends is important in itself, but in order to maximize the benefits of applying new technologies, insurers must develop an integrated approach. The role of IT managers, who have to develop a full-fledged strategy for responding to market changes, is especially important here. The use of the entire range of technologies will increase both the efficiency of insurance companies and the satisfaction of customers with their services.

Cyberinsurance

Main article: Cyber insurance

Telematic solutions in auto insurance

2021: Lada Granta sales start with telematics evaluating driving quality

On May 25, 2021, AvtoVAZ announced the start of sales of the Lada Granta car, equipped with the Lada Connect telematics platform, which will allow neat drivers to save on insurance. The corresponding smart insurance programs - UBI (Usage-based insurance, based on data on the actual use of the vehicle) were launched by Ingosstrakh, AlfaStrakhovanie, Consent, Rosgosstrakh and VSK. Read more here.

2015: Data from J'son & Partners Consulting

The auto insurance market is undergoing major changes. The traditional risk-based insurance model, where driver demographics such as gender, age, solvency, driving experience are taken into account, is supplanted by a new insurance model where risk is calculated based on each customer's individual driving style. This type of insurance is called "smart" insurance or "insurance based on actual use" (Usage-Based Insurance, UBI), which helps drivers reduce insurance premium costs, monitor the safety of their driving, and insurance companies more accurately and efficiently calculate the cost of an insurance premium, assessing risk with minimal errors, as well as reduce the number of accidents^[3]

"Smart" insurance helps drivers reduce the cost of insurance premiums, breaking the prevailing stereotypes about driving style, depending on socio-demographic characteristics. For insurance companies, a departure from the traditional model will make it possible to more accurately and efficiently calculate the cost of the insurance premium, assessing the risk with minimal errors.

Among the main benefits of smart insurance for insurance companies:

• Acquiring competitive advantages, increasing customer loyalty and service satisfaction;
• Improving operational efficiency;
• Minimizing insurance fraud

The main benefits of smart insurance for customers/buyers of the insurance policy:

• Economic benefit and increase of own security;
• Multifunctionality of telematic equipment.

From a technological point of view, one of the main elements of the smart car insurance system is the telematic module. This equipment collects data on driving style by measuring the speed of movement, angle and sharpness of maneuvers and other parameters. The information received is stored in the company database, on the basis of which the decision on the price of the insurance policy is made.

The entire range of existing telematics modules used for smart car insurance can be divided into the following types:

• devices connected to the diagnostic connector of the car (OBD-dongles);
• telematic modules embedded by the vehicle manufacturer (OEM-devices);
• windscreen vibration response modules;
• smartphones (some modern models smartphones in combination with specialized applications can be used as independent telematic modules);
• "black boxes" (this concept includes all types of telematic modules installed in a vehicle that do not belong to the above).

The largest share of devices in the segment of insurance telematics in the world belongs to OBD-dongles (in 2016, according to Ptolemus Consulting Group - 56%).

Global Smart Insurance Market

According to Berg Insight, in 2015 in Europe and North America there were 11.6 million smart insurance policies (5.3 million in Europe and 6.3 million in North America), in 2015-20. European and North American markets will reach 25.8 million and 42.1 million, respectively.

Smart Insurance Market Players

The value chain of the smart insurance policy covers several industries: insurance companies, suppliers of telematics equipment in the insurance sector, mobile operators, as well as car manufacturers.

Insurance companies interact with all parts of the value chain and are closest to the end consumer. They work closely with telematics equipment providers in the field of insurance both directly and through mobile operators.

Insurance companies

• In the world: Progressive, Allstate Corporation, Liberty Mutual idr.
• In Russia: Alfastrakhovanie, Ingosstrakh, Liberty Insurance, etc.

Telematics Service Providers (TSP)

• In Russia: 3S-Telematica, SpaceTeam, etc.

Technology Providers (TTP, Telematics Technology Provider)

• In the world: MetaSystem, Xirgo and Danlaw, etc.

Mobile operators

• In the world: Telefónica, Verizon, etc.
• In Russia: MTS, VimpelCom.

Car manufacturers

• In the world: BMW Group, Fiat, Citroen, Renault-Nissan-Mitsubishi, etc.

Russian smart insurance market

The growth of the Russian smart insurance market is characterized by a low pace, which is due to the unfavorable economic situation, which caused a decrease in the Russian auto insurance market in 2016 in both physical and value terms. In 2017, negative dynamics were overcome, but at the same time there was a decrease in the average insurance premium of auto insurance and the total volume of premiums.

Insurance market participants are forced to look for new ways to develop, optimize costs and increase profitability. A significant impetus to the smart insurance market can be given by the use of modernized ERA-GLONASS terminals and built-in solutions from automakers, as well as the active use of mobile applications replacing OBD-dongles, black boxes and other telematic devices.

In the future, 5 years, the penetration of "smart" policies in the aftermarket segment can reach 350 thousand (no more than 10% of the number of existing auto insurance policies), and due to the use of built-in telematics solutions based on ERA-GLONASS (including in the compulsory insurance segment) - 3.25 million.

Among the growth drivers of the smart insurance market:

• The possibility of providing additional services, for example, antitheft, E-Call, B-Call and other services with added value;
• The general global trend towards an increase in the number of introduced telematics solutions in auto insurance.

J'son & Partners Consulting considers the main barriers to the development of the smart insurance market in Russia:

• Waiver of any type of voluntary insurance due to a decrease in disposable income;
• Conservativeness of policyholders, distrust of insurance companies, concerns about data privacy.