14 technology trends in the insurance industry to keep an eye on in 2023

Nov 7, 2023 by Oksana Platonova


In brief

  • In this deep dive into insurance industry trends, we learn how, as customers increasingly expect seamless digital experiences, insurers must turn to technology solutions for operational efficiency and resilience
  • The insurance industry in 2023 faces new challenges, including rising inflation, supply chain impacts, and extreme weather conditions, necessitating further digital transformation
  • Key trends include artificial intelligence (AI) for automation and personalization, Internet of Things (IoT) for data-driven decision-making, and collaborations with insurtechs for innovative insurance products



Digital transformation in insurance is no longer an option. Customers are expecting seamless omnichannel journeys and frictionless digital experiences. Insurtechs leverage innovation to beat their incumbent counterparts in operational efficiency, service speed and resilience. Regulators demand sophisticated fraud detection, risk analysis and reporting.

This is where technology comes in. In 2023, tech solutions become irreplaceable in optimizing costs, driving customer engagement, improving operational efficiency and competing with insurtech challengers.

We at Luxoft are no strangers to helping insurers leverage cutting-edge insurance technologies to achieve those and other goals. Today, let’s break down the 14 insurance tech trends that, based on our industry expertise, are defining 2023 and beyond.


Insurance 2023 market overview


In 2023, the insurance industry players continue to grapple with an increasingly risky and uncertain macroeconomic and geopolitical climate.

Inflation is on the rise across the globe, chipping away at consumers’ purchasing power. The impact of the pandemic on supply chains and consumer behavior lingers, making digital transformation in insurance a must for continued survival.

According to the International Association of Insurance Supervisors’ (IAIS) mid-year report, solvency ratios, insurance liquidity ratio, and return on assets all showed a slight decline in 2022. However, the recent failures in the banking sector didn’t have a significant impact on the insurers.



The year 2023 is also marked by extreme weather conditions. In the United States, they prompted insurance companies to stop offering coverage for homeowners in areas prone to natural disasters, hike up the premiums and struggle to pay out on their claims.

As extreme weather conditions become the new normal, this calls for a reinvention of what P&C insurance is.



Several opportunities in life and retirement insurance present themselves in these uncertain times. The lack of faith in the availability of social benefits and a growing awareness of personal risk can increase demand for the industry’s services. As customer expectations shift to digital-first services, insurers can also leverage this trend.


Artificial intelligence


Artificial intelligence (AI) and its technological offspring, machine learning and deep learning, are often touted as game-changing insurance technologies. And there is a good reason for it: AI tools can power automation across the whole customer journey and enhance it with personalization at scale.

A rise in connected device data volume makes AI irreplaceable for insurers seeking to turn it into a valuable asset to power highly personalized digital experiences. But that’s not all. AI can also:

  • Speed up insurance purchases while minimizing human involvement. For example, using customer data, AI algorithms can create a risk profile within seconds
  • Allow customers to customize their insurance as they see fit. With underwriting automated by AI, customers can scale their coverage up and down whenever they want
  • Accelerate claim processing. AI powers optical character recognition and computer vision, which allows for automated processing of scanned or photographed documents. Data from connected devices can also be submitted to AI tools for processing


Predictive analytics


Predictive analytics is an AI-powered technology that essentially finds patterns in vast pools of data to predict which scenarios are most likely to occur.

Although it’s another application of AI, it deserves its own place on the list of insurance digital transformation trends due to its impact on:

  • Underwriting and pricing. Predictive analytics improves risk assessment accuracy while also speeding up the process and handling a myriad of macroeconomic, market and individual indicators
  • Fraud detection. According to the Coalition Against Insurance Fraud, insurance fraud costs US consumers around $300 billion a year. As an insurance claims technology, predictive analytics can help detect fraudulent claims with little to no manual labor
  • Insurance framework. Combined with IoT device data, predictive analytics is the technology behind signaling when preventive maintenance is appropriate
  • Customer retention. Predictive analytics can detect which customers are more likely to cancel or lower their coverage and what offerings can help retain them


Large language models (LLMs)


With the advances in large language models (e.g., ChatGPT), AI-powered chatbots have grown more sophisticated. In insurance, these advances represent several opportunities:

  • Streamlining insurance policy and contract writing
  • Automating data entry and analysis
  • Providing customer service and support for common inquiries around the clock
  • Offering guidance on how to minimize risks
  • Verifying validity, completeness and accuracy of claims

The insurance group Zurich is already experimenting with ChatGPT in claim processing and modeling. However, it remains to be seen whether this is one of the insurance technology trends that is here to stay.

Only 27% of US adults trust search results generated by AI, for instance, as LLMs are prone to hallucinations. And while self-service customer support, of which chatbots are an example, reduce calls by 12%, the phone remains the preferred channel for reporting a claim for almost three-fourths of consumers.




Insurtechs are tech-driven companies that offer innovative, digital-first insurance products and solutions. While they represent substantial competition for incumbent insurers, they also deliver innovations that drive the industry forward and redefine insurance.

Insurtechs address consumer pain points that incumbents struggle to address. And it attracts investment: McKinsey estimates insurtech funding to reach between $8 billion and $9 billion.

However, one of the key insurtech trends is the increased collaboration between tech-driven and incumbent insurers.

McKinsey estimates that two-thirds of insurtech companies focus on cooperation instead of competition with their incumbent counterparts. In some cases, it’s done through acquisitions (case in point: Prudential’s acquisition of Assurance IQ). In others, it’s fostered via open data ecosystems.


Low-code and no-code


As insurtechs pose more and more serious competition to incumbents, traditional insurers have to shed the shackles of legacy systems and reinvent their digital offerings.

Such initiatives used to mean either kicking off a lengthy custom development project or purchasing a SaaS product; there was no third option. Now, however, there is. Low-code and no-code tools allow for creating a custom application without a significant investment of time and resources into development.

The rising use of low-code and no-code application platforms is another one of the insurance tech trends that are happening in other industries, too. It’s expected to triple by 2025, with Gartner predicting that 70% of new applications will be created using such platforms.

Low-code and no-code application platforms are alluring as their use can improve operational efficiency, especially at smaller organizations that don’t typically have resources for custom development. They can also help sunset legacy systems without having to increase headcount.


Internet of Things (IoT)


The Internet of Things (IoT) — interconnected objects with sensors that collect and transmit various data — is on the rise. The number of IoT devices is expected to reach over 29 billion by 2030. In the consumer industry, the number of IoT devices is set to triple within the same period.

As one of the insurance digital transformation trends, IoT can benefit the insurance industry in several major ways:

  • In the home insurance sector, tracking how well the customer maintains their accommodation helps insurers determine the associated risks and, therefore, adjust premiums
  • In health and life insurance, companies use data from wearables, hearables, and other Internet of Medical Things devices to dynamically assess which customers are more likely to seek medical services

However, IoT technology also comes with several major risks that must be addressed before introducing it into insurance operations. These risks revolve around data security (IoT devices are hackable), data privacy and customer concerns regarding sharing personal data.




Telematics programs are a form of usage-based insurance products. These products use real-time data from connected devices to continuously update the insurance plan and tailor it to the individual behavior of every customer.

For example, in car insurance, GPS, cellular, and connected device data can help monitor driving speed, distance, acceleration, and other driving behavior parameters to continuously update pricing. Insurers can also offer pay-as-you-drive insurance. The demand for this product emerged thanks to the pandemic, lockdowns and remote work.

Telematics bring several benefits for insurers, including:

  • Improving underwriting and risk assessment. Instead of relying on demographic data, insurers can now base their decisions on behavioral data. For example, this data can include driving speed, time and common routes for car insurance
  • Automating the first notice of loss (FNOL). Instead of the customer filling out and sending the FNOL form, the insurer can be automatically notified about the accident as soon as a sensor detects an incident
  • Replacing “detect and repair” with “predict and prevent”. With AI and IoT data combined, insurers can enable predictive maintenance for their customers, essentially reducing claim volume

According to Allied Market Research, the global insurance telematics market is expected to show a CAGR of 19.5% between 2021 and 2030. The pandemic is the main driver of growth for the market; although high inflation can also contribute to the demand for lower premiums.


Cloud adoption


Most insurers have yet to move most of their operations to the cloud. One McKinsey survey showed that 81% of business leaders had under 25% of their environments running in the cloud. Over half of them planned to move more than 50% of their environment to the cloud by 2025.



Migrating to the cloud is one of the insurance technology trends that are no longer an option: It’s imperative. Adopting AI-powered, IoT-enabled, or data analytics and advanced analytics solutions is impossible without highly scalable, nearly limitless cloud computing resources.

A move to the cloud allows insurers to:

  • Deliver highly personalized omnichannel digital experiences
  • Accelerate the time-to-market for new insurance products
  • Create innovative digital products and generate new revenue streams
  • Reduce IT spending costs and mitigate cybersecurity risks

With all of that, it’s no wonder why McKinsey estimates the EBITDA impact of cloud migration to reach between $70 billion and $110 billion by 2030 in the insurance sector alone.


Embedded insurance


Embedded insurance means meeting potential customers where they are when they make another purchase to offer them a relevant insurance product. Travel insurance offered when booking plane tickets or injury insurance offered with ski passes are just a couple of examples of embedded insurance.

The concept itself is familiar. But according to one estimate, 40% of insurance will be embedded in the next 10-20 years.

The reason behind such rapid growth is that today, online purchases are the de facto standard of shopping as consumer behavior changed during the pandemic. Consumer demand is also shifting toward embedded insurance specifically. For instance, 70% of global consumers are interested in bank-embedded insurance.

Embedding an insurance product into the checkout process isn’t as difficult to execute as it used to be. Insurers no longer need employees to propose insurance to every customer in person; their partners just need to add a section to the checkout page.


Proactive risk management


Proactive risk management refers to actively identifying and preventing risks rather than minimizing their damage once they occur, as in reactive risk management. While it requires an organization's mindset change, it’s also impossible without the right insurance technologies in place.

Those technologies include:

  • AI-powered automation for manual tasks like data reconciliation and regulatory reporting
  • Advanced data analytics for comprehensive and accurate risk modeling
  • Real-time key risk indicator tracking for early warnings about potential risks for the C-level management
  • Regular stress testing of the internal protocols and systems

Proactive risk management is vital for insurers for two reasons. The first one is regulatory compliance, as the regulations become increasingly demanding. The second one is developing a value proposition for its clients beyond base-level compliance.


Omnichannel customer experience


The demand for seamless omnichannel experiences is on the rise across all industries. When it comes to customer support, for example, 73% of consumers want to be able to pick up right where they left off when they switch channels.

This is not one of the new insurance technology trends, however. Back in 2020, Capgemini already reported that over half of consumers use three or more channels to communicate with their insurance carriers, and McKinsey wrote that “customers demand multi-access”.

Unlike in retail, however, insurance customers continue to expect at least some interaction with human employees during their customer journey. For instance, 72% of consumers reported a claim by phone in 2022, and less than 10% of customers took out a policy online.

To deliver consistent omnichannel customer experiences, insurers can opt for one of three routes:

  • Digitizing the existing agent channels: Agents remain at the forefront of distribution, with sales processes and touchpoints getting digitized
  • Fully integrating agent and digital channels: Both play an equal part in the customer journey as insurers switch to omnichannel product offerings
  • Enhancing digital channels with human components: Digital channels are at the forefront of distribution, with agents playing a supporting advisory and sales role




Application programming interfaces (APIs) are the underlying technology of open insurance ecosystems. Such ecosystems are accessible to insurers’ partnership networks: Other insurers, financial services companies, insurtechs and non-insurance third parties.

APIs allow for sharing data securely and easily. This, in turn, allows insurers to:

  • Easily integrate insurance products into third-party checkout processes for embedded insurance
  • Add a third-party chatbot, checkout, or other functionality to their existing web or mobile application
  • Automatically pull and update data from a research company or another third-party source using a data aggregation API
  • Collect data from Internet-of-Things sensors, smartphones, wearables and other devices
  • Share their data as a product with their partners, generating a new revenue stream




Drones are finding applications beyond filming weddings and other events. In insurance, they are becoming a powerful aid in conducting inspections for P&C claims. That’s all because using drones allows inspectors to:

  • Cover more ground faster, speeding up the process
  • Get a closer look at the damage in otherwise inaccessible or difficult-to-access areas (e.g., roof inspections)
  • Capture more data regarding the damage, leading to better decision-making
  • Do more with fewer resources by reducing the number of field adjusters needed for each inspection

All of this allows insurers to effectively cut inspection costs and length and more accurately assess the damage. Adding drones to the inspection toolkit also helps organizations detect fraud more accurately and ensure employee safety.


e-signature technology


As over two-thirds of insurance policyholders say they’re ready to handle their claims fully online, insurers need to digitize the signing process to meet this demand. But that’s not all: e-signatures are also vital for digitizing the contract signing as a part of policy purchase.

The technology helps insurers mitigate the risk of fraud by verifying the signatory's identity and, therefore, the signed document's integrity. For customers, the ability to sign a document electronically saves them time, reduces friction and makes the whole journey more convenient.

e-signatures are already recognized by the European Union, along with the United States, Japan, and other countries. However, multi-jurisdictional compliance can be challenging for global insurers as regulations vary globally.


Ready to leverage insurance tech trends?


In a digital-first world, how well insurers leverage technology to enhance customer experiences, streamline workflows, and optimize efficiency and costs can make or break their competitive edge. Drop us a line to discuss how Luxoft can help you seize the opportunities that insurance technologies present.



Oksana Platonova , Insurance Industry Lead, Luxoft

Oksana Platonova author linkedin

Insurance Industry Lead, Luxoft

Oksana has more than 15 years’ experience in financial services technology, having built and managed teams for multiple clients and projects. She is now the global leader for Luxoft’s Insurance business, bringing Luxoft’s extensive technology expertise to help modernize the industry. In 2021 Oksana received a diploma in Organizational Leadership from the Saïd Business School at the University of Oxford.