Cynthia Ezekwe
The insurance industry is set to experience significant breakthroughs in InsurTech in the latter half of 2024. Emerging technologies such as AI, machine learning, and large language models are already altering the landscape, transforming key aspects like risk assessment, underwriting, and customer experiences. In parallel, insurers are becoming increasingly mindful of Environmental, Social and Governance (ESG) factors, recognising the crucial role these considerations play in shaping their business strategies for a more sustainable and successful future.
Speaking about the InsurTech trends for the second half of 2024, Melanie Hayes, chief operating officer and co-founder of KYND, a cyber risk management company, asserted that InsurTech companies have the opportunity to drive innovation and operational excellence through the implementation of machine learning-powered technologies. These tools, she pointed out, provide consolidated insights from large volumes of diverse data, enabling insurers to make better-informed decisions, enhance efficiency, and offer more tailored services to their customers.
“InsurTech companies have the opportunity to help drive innovation and operational excellence for the sector with the help of machine learning-powered technologies that enable consolidated insights from large volumes of varied data such as policy information, insurance claims data, historical exposure data and cyber accumulation risk among many others,’’ she stated.
In his assessment of the InsurTech trends for the second half of 2024, Peter Ohnemus, CEO and president of dacadoo, a Zurich-based technology company, pointed out that AI technologies can significantly enhance the overall product experience and lifestyle navigation for consumers.
According to Ohnemus, as services become more data-driven and personalised, AI enables insurers to provide more tailored products and services that cater to the unique needs and preferences of each individual customer, driving greater customer satisfaction and engagement.
Ohnemus highlighted that AI is a game-changer for insurers, not only boosting operational efficiency but also serving as a key driver for meeting the evolving needs and expectations of customers. In a market where personalisation is becoming increasingly important, Ohnemus emphasised that leveraging AI to deliver seamless and personalised interactions is crucial for insurers to differentiate themselves and maintain a competitive edge.
Mike Scott, sales manager at Novidea, a data-driven insurance platform, highlighted that AI has long been a topic of significant interest in the insurance and insurTech sectors. While the concept of AI is not novel, insurers are still exploring the most effective ways to integrate this technology into their operations to improve customer service, streamline processes, and gain more value from their data.
“The core use of widely available Generative AI (Gen AI) technologies such as ChatGPT have helped companies improve their customer experience (real-time assistance through chatbots, responding to complaints/queries etc), however, it is expected that InsurTechs will begin providing the market (if not doing so already) with new ways to deploy AI tech assist in the underwriting process to evaluate risk profiles more effectively and alert the market to potential risks that may not have been captured previously,” Scott added.
While recognising the immense potential of AI in insurance operations, David Howland, chief marketing officer at Earnix, a provider of intelligent insurance and banking operations, underscored the critical importance of responsible machine learning practices as AI becomes increasingly ubiquitous in the sector.
Howland highlighted that, while AI-based models have the potential to revolutionise insurance operations, insurers must ensure that their focus on AI-driven accuracy does not come at the cost of accountability and transparency. He stressed the importance of finding a delicate balance between the two, to ensure that the industry’s adoption of AI is ethical, fair, and reliable for all stakeholders involved.
According to Ashleigh Gwilliam, director of insurance industry growth at FullCircl, a customer lifecycle intelligence platform, ESG considerations are becoming increasingly central to the insurance industry.
Gwilliam highlighted that the integration of ESG principles into insurance operations can significantly enhance a company’s reputation, drive sustainable growth, and address the rising expectations of various stakeholders.
“Research finds that CEOs believe ESG should be integral to company processes and receive higher levels of compensation when adapting them into their strategy, but investors still see environmental and social programmes as ‘nice to have’ and are less likely to invest in businesses that have them in place, due to an expectation of increased costs,’’ he noted.
Paul Richmond, head of customer success at Novidea, anticipates an increase in the integration of ESG data into existing InsurTech offerings. He highlighted the multifaceted nature of risk, pointing out that the ESG aspect is a relatively recent addition to risk analysis within the insurance sector.
Richmond noted further that insurers have an opportunity to gain a competitive edge by harnessing ESG data and analytics to understand the impacts of climate volatility on their customers and markets.
To this end, industry experts urged InsurTech firms to stay agile and adapt to the evolving industry dynamics, suggesting that they embrace AI, prioritise customer experience, and integrate ESG considerations into their business models to remain competitive.
