Insurance is the data driven industry comprises of structured and unstructured data. The company achieves cost savings and significant ROI using big data analytics. The market is majorly driven by the digitalization of the customer relationship management.
The market players are achieving additional premiums, better risk selection, increasing governance and improved customer experience by adopting cloud and mobile based technologies. The legacy applications are modernized through various distribution channels
Underwriting is a process that the insurance company adopts to assess the eligibility of the clients for the coverage. In this process, the insurers evaluate the risk and classify the clients into appropriate risk classes. The risk class composed of companies and individuals with similar characteristics
Over the past years, the technological, environmental, and operational changes have led to the development of various distribution channels for the industry. Traditional channels such as brokers and agents are incurring more operational costs for industry players. Thus, insurers have developed new alternate channels, such as online, call centers, the web, and mobile, to drive growth at a lower cost.
The rapid penetration of IoT among users has spurred several startups to develop apps for the insurance industry to collect real-time information. This advancement would eventually reduce the time of insurance claim and improve customer satisfaction. With the advent of IoT, insurers can analyze customer data and identify clients’ needs and risks. The increasing investment in R&D by startups to develop innovative apps and technologies is expected to modernize the industry. For instance, in April 2016, U.S.-based Trov launched an on-demand insurance for insuring individual items that enable people to choose the activation of the coverage.
Maritime logistics plays a major role in the development of the logistics and transportation industry. Over 90% of the world trade is carried out through maritime transport. The Integrated Technical Co-operation Program was established by International Maritime Organization (IMO) to meet the compliance of IMOs framework. The assistance includes building up institutional and human capabilities. The growth of the marine industry is driven by the rapid growth of the port development in the emerging countries. The reduction in the value of vessels has increased contribution from cargo underwriters owing to the reduction in deductibles and premium.
According to the American Trucking Association (ATA), there are over three billion truck drivers in the U.S. The introduction of self-driving trucks would reduce the number of truck drivers in the industry and add transportation mechanics to service the vehicle. In May 2015, Daimler Trucks North America was licensed to operate an autonomous commercial truck.
The well-established logistics infrastructure, large consumer base, and increasing manufacturing sector in the region are some factors accounting for the growth of the European market. Moreover, the rising adoption of digital insurance also positively influences the market growth.
The growth in the U.S. regional logistics insurance market is primarily driven by an increasing number of startups developing innovating applications, which is expected to drive the industry demand in the U.S. region. For instance, U.S.-based FitSense, a data analytics firm, is working with insurance companies to personalize the life and health insurance with wearable devices.
Several key manufacturers are increasingly undergoing mergers and acquisitions to expand their geographic presence and capture the growing market potential. For instance In 2016, UPS Capital (U.S.) acquired insured parcel business of G4S International Logistics (U.S.) to enhance the service offering to secure logistics segment.
The insurers are likely to target the Latin America owing to the rising transportation industry in the region. The evolution of risk based harmonization and capital with global solvency standards is likely to spur the market demand over the forecast period.
The insurers in the developed economies are increasingly invest in digital platforms to strengthen the relationship with the customers. The companies also offers personalized services and products to increase the customer expectations. However, multiple regulatory influencey on the insurance industry could impact the market growth.
In-depth report on global logistics insurance market by Grand View Research: