’Insurers must attract a broader range of talent and make use of cutting-edge technology,’ says chief executive 

Prescriptive analytics is the largest megatrend (re)insurance opportunity amid increased demand for data-driven decision making, according to Aon’s latest research. 

In the broker’s new report, entitled Transformative Industry Trends: An Opportunity to Create New Reinsurance Markets, it highlighted that the form of business had the potential to exceed $100bn (£79bn) in gross written premium (GWP) by 2030.

According to Aon, prescriptive analytics can optimise insurers’ pricing and underwriting, streamline claims processes, help evaluate and model risks and detect fraud.

Sherif Zakhary, chief executive of Aon’s strategy and technology group, said: “We have the technology and ability to anticipate the future landscape and develop innovative products and solutions to enable stakeholders to fulfill their biggest needs, from accessing new forms of capital to navigating emerging volatility.

“These megatrends each equate to risk and opportunity for the global insurance industry and so as risk experts, we cannot afford to sit on the sidelines and wait for these trends to crystalise.”

AI market

Aon also revealed in the report that the artificial intelligence (AI) insurance market, which has been used as an indicator for the prescriptive analytics trend, could reach between $0.5trn (£0.39trn) and $2trn (£1.57trn) in revenue by 2030 at a 30-40% capital annual growth rate.

This is because growing demand for data-driven decision-making and the adoption of big data and AI technologies were driving market growth, according to the research.

However, Aon warned that the technology was still in initial stages of development.

“(Re)insurers are focusing on greater operational efficiencies rather than developing specialised insurance products to protect against associated risks,” the broker added.

Other opportunities 

Meanwhile, the metaverse, which is described as a 3D internet, has also been named as a key growth opportunity for insurers as it could potentially generate $20bn (£15.73bn) in GWP by 2030.

It has a few insurance products servicing it, with non-fungible token (NFT) insurance being the most prevalent.

“However, expected growth in digital economic activity will create opportunities for (re)insurers to cover virtual assets, cyber attacks and potentially even liability insurance in the Metaverse,” Aon said.

It also said that the intellectual property (IP) market presented an immediate opportunity for insurers, driven by a global economic shift from tangible to intangible assets.

The global intangible asset value was estimated at around $60trn (£47trn) in 2022.

However, Aon said few carriers currently participate in this market, which in turn left the door open for new entrants and the development of new products, including forms of IP business interruption cover.

Zakhary added: “In order to accelerate this innovation, insurers must attract a broader range of talent and make use of cutting-edge technology, including advanced analytics.”