Issue #41 | 29 March 2024
Stay in the know on the stories shaping the future of insurance, with the weekly lowdown brought to you by Genasys.
This week in The Lowdown:?forecasts for insured losses doubled amid climate crisis; data trends driving innovation in the insurance industry; accelerating AI innovation and advanced analytics in insurance; and regions leading Insurtech innovation.
Forecasts for insured losses doubled amid climate crisis??
Swiss Re Institute’s latest projections indicate a potential doubling of insured losses over the next decade, driven by escalating temperatures and increasingly severe weather events, Insurance Business reports.
In 2023, natural catastrophes, including a major earthquake in Turkey and Syria, led to insured losses of $108 billion, continuing a trend of annual increases observed since 1994. The disparity between global insured losses from natural disasters and economic growth highlights the urgent need for mitigation and adaptation efforts, particularly in the face of climate change-induced storms and floods.
Data trends driving innovation in the insurance industry
As data quality and technology continue to advance, the insurance industry is witnessing a significant shift in innovation fuelled by more robust data sets and sophisticated analytics, Nationwide reports.
Insurers are recognising the pivotal role of data in understanding customer needs, enhancing operational efficiency and reducing costs. Leveraging third-party data sets alongside proprietary data sources enables insurers to gain deeper insights, leading to more efficient risk assessment and quicker decision-making. The integration of artificial intelligence (AI) also amplifies the power of data by enabling insurers to evaluate vast amounts of information swiftly, enhancing productivity and personalising customer interactions.
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Accelerating AI innovation and advanced analytics in insurance
A recent report by McKinsey highlighted a significant gap in data and analytics maturity among insurers in Europe, the Middle East and Africa (EMEA), despite the potential €1.2 trillion value in analytics for the sector, Claims Media reports.
While a few insurers have seen notable profit increases by adopting artificial intelligence (AI) and advanced analytics, most are yet to capitalise on these opportunities, despite the additional competition from non-traditional players leveraging AI to offer insurance products directly to consumers. Although EMEA insurers recognise the urgency to accelerate their capabilities, there remains a considerable disparity between intention and action, with only a fraction utilising automated analytics for decision-making.
Regions leading Insurtech innovation
Insurtech innovation is flourishing globally, driven by a convergence of factors such as regulatory support, advanced technology capabilities, access to capital and entrepreneurial culture, The Fintech Times reports.
Silicon Valley in the US stands out with its concentration of tech talent and venture capital networks, fostering innovation and experimentation despite regulatory challenges. Europe, particularly London, benefits from historical significance in insurance and a supportive regulatory landscape, while Asia-Pacific are witnessing significant growth driven by rapid technological adoption and regulatory openness in China and Singapore with its strategic location and regulatory sandbox approach. Latin America emerges as a major hub for Insurtech, propelled by widespread access to mobile devices and initiatives like open insurance, driven by the Covid-19 pandemic.
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