The number of insurance-related patents filed worldwide increased from 657 in 2016 to 917 in 2017 – a year-on-year increase of 40%.
London-headquartered law firm RPC, which compiled the statistics, said insurers’ drive to adopt new technologies was responsible for the increased annual patent filings that have jumped by 116% since 2013, when 435 were filed.
Paul Joseph, a partner at RPC said: “The rising number of insurtech patents shows just how important technology now is to insurers in increasing efficiency, delivering a better user experience and developing brand new products.”
The most frequent filers of insurance-related patents last year included US providers Allstate Insurance and State Farm, which filed 35 and 34 insurance patents respectively.
Hartford Fire Insurance Company came third with 26 insurtech patents in 2017. Ping An Insurance of China was fourth with 23 insurtech patents, while Swiss Re’s 12 patents ranked it fifth.
Other active filers of insurtech patents outside of traditional insurers include Alibaba, the Chinese e-commerce giant, which filed eight patents last year.
Pricing and telematics
A total of 22% (199) of insurance patents filed in 2017 related to pricing, as businesses looked for new ways to make pricing premiums and determining risk more accurate and efficient.
Telematics, where technology monitors driver behaviour, with data used to create risk-based products in the motor insurance sector, was a key area of focus.
Some 78 telematics-related patents were filed in 2017, up from 56 the previous year, a 40% rise.
RPC noted the industry is embracing artificial intelligence (AI), too, with patents related to machine learning increasing to 100 in 2017, up from 73 the previous year – and a jump of 37%.
Peer to peer-related (P2P) insurance patents also increased to 62 in 2017 from 52 in 2016.
P2P insurance is where a group of individual policyholders can pool their premiums together to insure against a risk, typically via an online marketplace, helping to cut costs by reducing overheads and inefficiencies.
RPC said insurers and brokers have significant opportunities to carve out competitive advantage through technology as the shift to automated processing has been slower in some parts of the insurance industry, than in many other areas of financial services.
RPC’s Joseph said whether insurers are engaging in proprietary R&D or collaborating with smaller players, protecting intellectual property (IP) rights by securing patents is also essential to secure first mover advantage and stay ahead of the competition.
The trends highlighted in RPC’s insurtech patent data come after research published by Willis Towers Watson (WTW) in September said the number of insurtech financing transactions reached a record high in Q2 2018.
However, WTW said total investment in the space fell by 20% compared to the previous quarter.
WTW attributed the funding decrease to a lack of "high dollar" transactions in the quarter.