Looking back to look forward

Happy New Year! Larry David and all related posts suggest we have until the 7th of January to use that phrase. New Year, new things? Everyone has predictions for what will come about but I'm here to provide a summary and synthesis of what we've seen and what's ahead.

Seemingly, every consultant or system integrator along with carriers and creators all put together a 2024 Insurance prediction piece. I've read most, scanned them all, and sat through a couple of live events that definitely bested the written work. Kudos to Ema Roloff and Insurtech Insights for a well attended, festive, and insightful event, here's the replay.

AI, GenAI, inflation, hard market, interest rates, AI, and my favorite - loss avoidance. Yes, these topics are sure to continue to dominate our time and effort in the insurance industry but it will take a special effort to really differentiate your companies' efforts. The economy is probably going to be a challenge for many startups or struggling companies. My guess on spending looks challenging. Uncertainty creates hesitancy and startups thrive on speed and results which are tough to deliver if carrier partners are looking for solid results, not potential gambles. Interest rates may fall but consumers' stashes of cash have dwindled and everyone loves a bargain. Winners will find a way to deliver value at a lower cost, cue the AI champions and challenge the multi-year digital transformation. What can you do now that makes substantive impact?

Many companies have stuck their toe in the AI waters. Microsoft Azure and Google Cloud Services have delivered some great tools that accelerate these sandbox opportunities. Companies that have been working on AI for more than 12 months will prove the winners here. It's all about the data and knowing its limitations, which takes time to understand.

Here's the list of other predictions:

Deloitte

E&Y PDF link goes into more details

Insurance Journal

Forrester

Artificial.io

SimpleSolve

Majesco (home team bias)

Predicting the future is hard. Getting it right is harder. Running an insurance business is a little bit of both. Loss costs increasing is almost a certainty and there is not a lot of relief in the rate filings that have been approved, almost across the board. Many companies posted unsustainable combined ratios, so new rates are just putting a Band-Aid on a compound fracture for some lines and geographies.

A multitude of bad things requires a few really good things to overcome, because good is better than evil. True automation, improved customer experience, time and money saving AI enhancements, more focused lines of coverage, and better use of data can be the building blocks to industry improvement. Not to say that nothing new has been invented or needs to be, but let's use the things we've got to deliver value, monitor risks, and prevent claims to start turning the tide. Prior investments in analytics and pricing can payoff if we use the data from IoT devices for predictive maintenance or loss avoidance.

The only inevitable is change, so let's use the past to help guide our adaptation to the future. Always changing, always hustling. I'm not big on predictions because you can create challenges that don't exist but writing about it helps me start the solutioning process. Let's fix what we know with what we've learned from the past and create the future.

Majesco Deloitte Consulting 安永 SimpleSolve Inc. Forrester Insurance Journal Artificial Labs