The key InsurTech trends to look out for in 2024
2024 marks a pivotal chapter in the dynamic world of InsurTech, where innovation and technology converge to redefine the insurance landscape. From AI-driven risk assessments to the emergence of Generative AI, this year is set to herald in a new era that will revolutionise how insurance firms operate. As digitalisation accelerates and customer expectations evolve, 2024 is set to see a disruption to traditional models, offering personalised solutions, streamlined processes, and enhanced customer experiences.
Speaking to a host of key industry players, FinTech Global uncovered what the companies at the heart of this burgeoning sector believe that the future will hold.
One such topic that seems to be ubiquitously considered as part of the future of the InsurTech landscape is that of AI and Machine Learning, as Efrat Marmur, VP of Marketing at Air Doctor explained. “In 2024, we can anticipate the significant impact of artificial intelligence (AI) and Machine Learning (ML) on the InsurTech landscape.
“Air Doctor is aware of the potential of these technologies in enhancing services. For example, our platform leverages AI technologies to assess travellers’ preferences and needs to provide tailored search results with recommended medical providers that meet their individual requirements.”
But what exactly is ML? Machine Learning stands as a subset of artificial intelligence (AI) and computer science. It revolves around leveraging data and algorithms to emulate the human learning process, continuously enhancing its precision over time.
It’s exactly this promise of greater precision that appeals to custom software development company Symfa. The firm, when discussing its views on the future of the InsurTech sector, opened up on the expected widespread adoption of AI and ML, explaining how it is certainly a part of their future.
Vitali Yurkevich, CEO of Symfa, highlighted the intended strategies for the company to gain a competitive edge, stating, “AI implementation for decision-making aligns with our customers’ pressing challenges.”
He noted that customers often express struggles within the hampered macroeconomic situation and fierce competition, particularly concerning underwriters’ efforts on less promising bids and resource-intensive yet slow-return products.
“What we’re going to work on during the next year, is to develop a predictive tool capable of analysing a vast array of insurance data, offering business hints for submissions profitability, pricing adjustments and specifying necessary formula changes. Additionally, it will recommend against taking up new clients (if those don’t meet specified margin indices) or discontinuing certain types of insurance if they prove to be low-margin or unprofitable,” he added.
Future battlegrounds for insurers
In the fast-paced realm of technological advancements, the insurance industry has been a witness to the meteoric rise of Generative AI (Gen AI) in 2023.
According to Scanbot SDK CEO Christoph Wagner, the potential for this technology is endless, particularly through the automation of processes. The solution could become a pivotal tool, reshaping the landscape for insurers, and offering a broad spectrum of applications. Its capacity to sift through data, create content, and forecast outcomes presents a transformative potential. Embracing this technology becomes a gateway for insurers to gain a competitive advantage, meeting evolving customer demands and industry trends.
Moreover, its automation capabilities extend to quote and policy generation, minimizing manual tasks involved in paperwork. AI-driven chatbots elevate customer support, delivering round-the-clock assistance and personalised communication. Leveraging customer data, Gen AI facilitates tailored policy recommendations, thereby optimizing upsell and cross-sell opportunities for insurers.
Wagner explained, “Advances in AI have the potential to revolutionise automation in the insurance industry. Many insurance processes, particularly claims management, are still labour-intensive and require manual document review. However, the evolving capabilities of AI and machine learning promise to automate these tasks – provided the input data is of high quality.
“The Scanbot SDK delivers just that: Our mobile document scanning solution provides insurers with a simple, reliable tool that produces the crisp, high-quality scans demanded by automated processing. As the entry point of automated workflows, scanning is an integral feature of modern insurance apps and websites. The technology thus not only streamlines existing processes but also lays the foundation for further AI advancements in the InsurTech industry.”
This viewpoint is echoed by customer experience (CX) automation firm Ushur, who concur that Generative AI will transform the future of the field. So much so, that the company described it as the “1,000lb gorilla in the room” for firms looking to best utilise new technology.
Henry Peter, Ushur CTO and co-founder said, “Early adopters of Gen AI capabilities will create an expectation amongst customers (businesses as well as end-consumers) for a certain level of responsiveness, personalisation and utility in every interaction serviced by an InsurTech provider.
“We foresee a shift in AI budgets away from ML modelling experiments for back-office use cases business units like underwriting, and towards AI projects that add responsiveness through conversational-based experiences.”
However, there are reasons to be cautious. History has shown with the emergence of new capabilities, the initial rush often lacks a thorough consideration of its true potential for business impact.
This is one thing that Jamie Wilson, Head of Pricing & Innovation at hyperexponential was keen to stress as we head into 2024. He said, “Historically when a new capability like Gen AI has emerged, people jump onto the bandwagon without taking the time to work out where it can have the greatest business impact. In 2024, we’ll see insurers realise that to unlock the awesome capabilities of these emerging technologies, they need a robust and integrated data strategy and corresponding technology ecosystem.”
The evolution of customer expectations
As we embark on the new year, the InsurTech sector seems to be on the precipice of a dramatic shift in relation to customer expectations. At the heart of this is a desire to depart from conventional practices, instead prioritising personalisation, and the implementation of bespoke products, underpinned by a fusion of data-driven insights and direct user feedback.
This pivot towards producing a customer-centric offering is at the epicentre of what Melanie Hayes, COO and co-founder of KYND, described as a “key driver of customer engagement in the digital era”. With descriptions such as this, it is clear to see why managing customer expectations is expected to be a pivotal determiner of success in this hyper-technological era.
Hayes said, “Hyper-personalisation has emerged as a key driver of customer engagement in the digital era, and in 2024, InsurTech firms are likely to continue prioritising hyper-personalisation strategies to meet rising customer expectations and deliver highly customised and relevant experiences to their clients. We expect this trend to particularly accelerate among cyber risk analytics providers for the insurance industry.
“As firm supporters of customer-centric innovation ourselves since the very outset, KYND’s proprietary technology has been built with insurers in mind to ensure we continually improve our data and services based on the evolving challenges and needs of our clients. This is precisely why, unlike many in the field of cyber risk analytics, we refrain from providing ratings on a company’s cyber risk. Instead, KYND helps underwriters make well-informed decisions by cutting out the noise and highlighting the risks which matter uniquely to them: those that lead to cyber incidents and subsequent claims and losses, reinforcing a customer-centric approach within the industry through tailor-made, data-driven risk insights,” she continued.
But why has this shift occurred, what is driving it? In the eyes of Scanbot SDK’s Wagner, the answer is simple, the introduction of the modern consumer, whose demands are higher, and more demanding than ever.
He explained, “Consumers want instant and flexible access to insurance services through digital channels such as an app or mobile website. The Scanbot SDK enriches the digital insurance experience by enabling processes such as fast and reliable ID and document scanning in insurance applications.”
This viewpoint was shared by Air Doctor’s Marmur, who added, “Customers expect InsurTech companies to offer personalised insurance products and services tailored to their individual needs. That’s why we’ve been developing our digital card innovation – to ensure Air Doctor’s solution is as accessible and as personalised as possible.
“It’s also important to keep in mind that customer expectations continue to evolve.
That’s why Air Doctor focuses on enhancing user experience through intuitive interfaces and proactive engagement. We leverage data analytics to anticipate customer needs so we can adapt accordingly and continue to provide seamless interactions,” she added.
But is the future of InsurTech green in 2024?
In today’s insurance landscape, Environmental, Social, and Governance (ESG) considerations have emerged as a central concern, that is no longer avoidable. That is why, according to many industry experts, the sector’s multi-faceted ‘green’ challenge is set to become even more important as we head into 2024.
Stan Skavronsky, Sales Executive at Symfa, gave his view on the future of these rising ethical considerations. He said, “ESG will continue to be a prominent topic for insurance in 2024, with climate and societal issues demanding more and more public attention. There are two main growth vectors I could distinguish in the ESG area for InsurTechs.
“The first one will affect the way insurance is done from the inside. Reputational risks already make insurers tilt away from climate-hostile businesses. We see some reduction in coverage for fossil-fuel companies (oil & gas, carbon). Those are non-legislative consequences, and we’re about to see a far greater effect if (or rather when) ESG regulations become ubiquitous.
“The second vector is more outward, public-oriented. InsurTechs will continue to focus on user- and society-friendly growth strategies, as unfavourable economic conditions will make a lot of policyholders reconsider their insurance budgets.
“Intelligent usage- and event-based models are set to prevent unnecessary expenses for users. On top of this, double coverage for carriers will consolidate their position among insureds and insurers alike.
“A perfect example of this is California-based firm Jumpstart, a parametric InsurTech utilising publicly available data on earthquakes to provide affordable event-based insurance. Low monthly fees, transparent eligibility criteria, and no need for loss adjusters make it an ideal ESG InsurTech player. More will follow this path, with larger carriers joining the game through partnerships or mergers,” he explained.
KYND’s Hayes agreed with the principle that ESG considerations will become even more paramount in 2024, claiming that ever-tightening regulations will be the catalyst for this increase in importance.
“Increasingly, regulatory frameworks are coming into place that demand higher levels of scrutiny, with a rapid uptake in mandatory disclosures. In light of this, integrating robust cyber risk management strategies into ESG oversight has never been more essential, and strengthening operational resilience for companies in the face of escalating cyber threats is becoming ever more a priority,” she explained.
Indeed, the feeling that ESG considerations will be at the forefront of the InsurTech sector is seemingly ubiquitous across the market. Scanbot SDK’s Wagner, and Air Doctor’s Marmur both take time to specifically touch upon their own company’s dedication towards the cause in 2024.
As the InsurTech sector charges into 2024, the landscape is poised for a seismic shift driven by groundbreaking advancements. Machine learning, coupled with the rise of Generation AI, is set to revolutionise risk assessment, claims processing, and customer interactions. Moreover, the ever-growing importance of ESG (Environmental, Social, and Governance) factors is steering the industry towards sustainability and ethical practices. As we venture forward, the real winners will be those who adeptly navigate this convergence of innovation and responsibility. The key lies in being nimble, and adaptable not only to the known changes but also to the unforeseen transformations that await on the horizon. Thriving in this dynamic sector hinges on a readiness to embrace these considerations and swiftly respond to future shifts that are yet to reveal themselves.
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