ICNZ Scholarship winner Toby Kelly reports on Insurtech Insights, USA

Insurtech Insights, held in June 2024 at the Javits Centre, New York, brought together leading insurers and insurance technology firms to understand key industry trends and innovations.

Of course, being the USA, everything is on an impressive scale with over 5,000 attendees, and seven different stages running non-stop for two days. On my first morning, I was listening to an Executive from State Farm explain how given regular customer churn, they need to sell over 10 million policies per month to grow the business. 

As we are also seeing in New Zealand, there are some big external trends facing the insurance industry, including new emerging technology, climate change, and the cost-of-living crisis.

It was great to hear how insurers and insurtech companies are approaching these challenges and start to understand how complex, but also interrelated, some of the solutions are. 

Generative-AI

The hype has certainly not stopped around Gen-AI and, as anticipated, it was the most popular topic across the conference. I heard from a range of technology vendors and insurers who had successfully partnered to deliver innovations. 

The most successful use cases were ones that augmented existing business processes. One impressive example was shared by motor insurtech, ClearCover. They launched a new GPT-powered chatbot that addressed 45% of ClearCover’s basic service queries, empowering their team to focus on higher value and/or more complex interactions.

In other areas like claims, GPT-powered analysis can now provide a first read of damage before introducing a human into the process flow, for example looking at satellite imagery to assess flood impacts. This enables faster claims processing for customers and can support information-gathering requirements for insurers' stakeholders, including their regulators.  

Climate and… affordability 

The United States had 28 CAT (billion dollar plus) losses in 2023, which was a new record for weather events. Insurers are increasing prices in the face of claims inflation and reinsurance increases while reconsidering exposures to riskier areas and pricing accordingly.

Customers in the United States are facing tricky choices with rising premiums and a tough economic environment, similar to New Zealand and Australia. This is resulting in some customers reducing their insurance protection. 

The solutions mentioned at Insurtech Insights included the need to provide customers with product flexibility to help reduce cost, but there is also a big move toward helping customers prepare for and minimise the impact of weather events. Over the long term, this should help insurers moderate price increases and build stronger relationships to retain loyal customers.

Education about the risks customers are facing is key in triggering these types of behavioural changes, and challenging existing perceptions of insurance. 

Better outcomes 

Beyond climate resilience, I was pleased to see a wide array of solutions that focused on improving customer outcomes. I heard from several providers who are focusing on smarter homes, with solutions like pipe leak detectors and better security systems, while offering slick digital experiences to give customers price discounts and better claims experiences.

One provider called Resideo now installs 15M devices annually demonstrating that there is a meaningful segment of digitally engaged customers who could benefit from insurance linkages.

These kinds of innovations are also helping insurers build deeper relationships with customers and differentiate from competitors, reducing churn and acquisition costs. Incentivising customer behaviour ultimately results in better outcomes for both parties, although they are not without challenges when it comes to implementation and trust. 

After two days of immersing myself in all that Insurtech Insights offered, it was clear that increasing amounts of data are becoming available to insurers, along with enhanced technology capabilities to analyse that data and price risk accordingly.

The challenge remains in building trusted relationships with customers to have access to a wider pool of data and have the internal capability to leverage it effectively. When that is achieved, there are great opportunities to create value propositions that reward and align insurers and their customers.

Thank you again to ANZIIF and ICNZ for the opportunity to attend Insurtech Insights.