Insurtech Insights USA 2024: Recap & Key Takeaways

This was my first time attending Insurtech Insights USA The Insurance Conference 2024.  With over 5,000 attendees and 120 sessions with speakers from insurtechs, brokers, carriers, and MGA’s, the event highlighted the industry’s readiness to embrace new tech and solve challenging problems. My colleague, Reid Colson, and I were there to meet with clients and industry partners and better understand what industry challenges (new and old), trends and strategies were driving the largest investments in technology solutions.  Here is my Insurtech Insights recap of key trends and takeaways:

Trends in Insurance

GenAI & AI Tech Dominated

• While the industry is often deemed a laggard in terms of innovation and tech adoption, insurers are adopting and investing heavily in GenAI (Generative AI).
• AI, and particularly GenAI, was mentioned in almost every conversation. Even in less technical themes, the topic found its way into the narrative.  However, it was clear that while prevalent, no one is an expert, and there is still a lot to figure out and validate.

Pent-up Demand & Capital

• There is $4 trillion in dry powder to invest in private equity (PE), and it is expected to grow further if interest rates drop. Increased M&A activity is anticipated due to pent-up demand and startups running low on cash. Expect tighter funding diligence and more strategic acquisitions by carriers for technology, talent, or products.

Climate

• A significant focus on technology is addressing climate change, ensuring insurance availability in high-impact areas. There is a need for better insurance solutions, especially where insurers may exit unprofitable markets.

Consumer

• Embedded insurance at the point of purchase continues to grow strongly. Parametric insurance was another hot topic and is expected to grow. Parametric insurance covers the probability of an event happening and pays when an event occurs, compared to paying on loss value.

3 Key Takeaways from Conversations & Sessions

GenAI Shaping Underwriting

• GenAI is revolutionizing underwriting by providing enhanced pricing metrics and improving decision-making through data summarization. However, the underwriter still plays a crucial role in reviewing AI outputs and maintaining oversight. AI makes underwriters more efficient by reducing administrative tasks.
• Getting AI ‘right’ involves 10% algorithm, 20% data, and 70% is the interaction of AI with people and processes. One trending topic is how to train new underwriters in an environment where more straightforward tasks are handled by AI. A proposed solution is using simulation AI based on past underwriting decisions for training.
• Underwriters must decide who handles pricing—AI, human, or a combination. Discussions also covered setting boundaries for AI’s role in underwriting. While computers were once thought to be infallible, AI’s potential for mistakes must be considered in operational frameworks.

Customer Experience & Engagement

• Prioritizing technology that enhances customer experience and drives net new business was the topic of multiple sessions, with a focus on building trust through improved customer touchpoints.
• Leveraging historical and customer data to drive personalized insurance solutions, which in turn, drives customer loyalty.
• Insurers need to continue to provide best-in-class digital capabilities. Disconnected insurance experiences and limitations of legacy systems were frequent topics of conversations on panels, further driving the need for an effective CX strategy.

Importance of Modernization & Data Quality to Drive Innovation

• One of my favorite sessions highlighted the need to embrace modern technology- both systems and processes- in order to integrate AI.
• Outdated and legacy systems and poor system integrations were one of the primary obstacles to digital transformation effectiveness.
• Poor data quality and governance will impede your ability to unlock potential with GenAI and other innovative tools and practices.

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