The P/C industry has historically been resilient, but 2024’s combination of financial uncertainty and operational stresses poses a real test for carriers.  

The following are some of the top trends Datos Insights sees heavily impacting the P/C space in 2024: 

• The AI revolution begins. 2024 could be a breakthrough year for enterprise AI adoption across insurance. Leaders who recognize the enormous potential of AI will move swiftly to build organizational readiness and gain a competitive edge. They may redefine industry standards around speed, efficiency, and customer delight. 
• Insurers hop on the data train or get left behind. Artificial intelligence and machine learning are enabling insurers to utilize data and analytics in new ways to improve business operations, provide better customer experiences, lower costs, and increase fraud detection. 
• CAT’s out of the bag: Insurers rethink in age of catastrophes. As catastrophic events become more prominent, insurers will use technology to transform catastrophe preparation and response. 
• Reinsurance challenges put pressure on profitability. Though the reinsurance market is continuing to harden, insurers that are advancing underwriting capabilities and book management can minimize market turbulence impacts and move toward profitability. 
• Policyholders are priced out of protection. The impacts of rising insurance rates causing financial strain on insurance companies will require short-term compromise and long-term solutions to avoid larger economic consequences. 

Insurers will need to rethink their business models, harness technology, and focus relentlessly on delivery and cost efficiency in order to maintain profitability and relevance. The multiple headwinds buffeting the industry could separate the nimble, forward-looking companies from the stagnant and outdated. 

To hear about the rest of the top 10 trends that Datos Insights foresees impacting the P/C market in 2024, please register for our webinar on January 10: Top 10 Trends in P/C Insurance, 2024: Generative AI Emerges as Insurers Adapt to Changing Markets in a Changing World. If you are unable to attend, read about these areas of the industry in our report Top 10 Trends in Property/Casualty, 2024.

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The Core Systems Ecosystem

Core systems play a crucial role in insurers’ overall technology footprints. What has changed is that, especially with the explosion of insuretech offerings, many new point solutions have been developed that are helping to extend core systems with interesting new capabilities. We call this web of solutions the core ecosystem. This ecosystem is disrupting how core system solution providers think about their offerings and is providing them with more varied integration choices as well as access to a plethora of different types of data.

Some of the core ecosystem solutions, such as bill review or payments, can be provided by horizontal players, albeit those with an understanding of insurance. At the same time, core insurance business services remain heavily oriented toward insurance-specific providers. Even seemingly general solutions can often be launched more quickly and successfully if they are purpose-built for insurance (e.g., texting capabilities with insurance workflows already built in).

As a result, instead of technology companies entering the space trying to solve an insurance problem, Aite-Novarica Group is now seeing more insurance executives at these companies trying to solve problems that they personally lived through.

APIs

The role of APIs has changed as discussions around them have moved from the strict domain of IT into the rest of the business—right up to the boardroom—as part of company strategies. Many insurers are now getting serious about their APIs, which are often a tangle of siloed legacy connections built with no centralized control. They are moving away from SOAP and, in some cases, even REST APIs toward evolving standards like AsyncAPI, GraphQL, and gRPC.

Based on carrier conversations with Aite-Novarica Group principals and analysts, the accumulation of API-related technical debt means 2023 is going be the year many insurers look at updating and standardizing their APIs to take advantage of newer technologies and approaches to business.

Security is going to be a significant driver for addressing API technical debt as well. In fact, Aite-Novarica Group’s Cybersecurity practice has addressed API security in its own Top 10 Trends report and webinar.

AI and Automation

2022 saw a lot of proofs of concept around AI-enabled automation, especially for underwriting and claims, but many of these did not end up getting implemented. Insurers learned a lot from these proofs of concept, however, and in 2023, Aite-Novarica Group expects these technologies will transition from “emerging” to something a bit more proven.

The most common success stories today center around ingesting and parsing data from submission documents, claims correspondence, and medical bills. Aite-Novarica Group expects further development in automated inspections and claims triage using aerial and mobile imagery and image recognition, along with advanced fraud detection with better self-improving, AI-enabled predictive models.

As some of Aite-Novarica Group’s other Top 10 Trends point out, the speed of business will continue to accelerate in 2023 and innovation will become fundamental for insurers to keep pace with the rate of change. To view the Insurance practice’s property/casualty top 10 trends webinar, click here. Clients can also read our full, detailed report here.

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Normally, in a difficult environment, insurers would be tightening their belts, yet in 2023, Aite-Novarica Group anticipates many insurers taking a different approach by increasing investment in IT and implementing new technologies to improve operational efficiencies, increase revenue, and enhance customer experience.

Here are some of the top trends Aite-Novarica Group sees dominating the property/casualty space in 2023:

• The new insurance core ecosystem will expand. Insurers often identify point solutions with use cases across their organization but lack the resources necessary to integrate with so many in parallel. Core system technology providers are expanding their “hubs” or “marketplaces” for preintegrated and certified third-party applications that add value to an insurer’s solution and allow them to compete in today’s market.
• Speed of business will continue to accelerate despite a recession. Competitive pressures on insurers mean that slowing down on strategic IT delivery is not an option, and insurers will be expected to find expense reduction while continuing to accelerate the pace of technology delivery.
• Transformation will move beyond core systems. As many insurers’ core modernization projects conclude, transformational efforts are shifting to the next round of business capabilities to be optimized and revolutionized. Ongoing revenue and expense pressures, coupled with talent shortages, are pushing insurers to look for operational efficiency gains across the enterprise.
• Innovation will shift from hobby to competitive advantage. The pandemic and other evolving changes such as climate risk, supply chain disruption, and volatile global economies have pushed insurers to embrace innovation. New technologies will become a crucial element of an insurer’s ability to stay ahead of future disruption and changing market conditions.
• There is a growing AI conundrum. As insurers expand their adoption of AI, they need to contend with forthcoming regulations and address potential model bias. Insurers may begin to implement AI risk management programs to monitor and understand decisions made by AI models and ensure fairness and transparency.

To learn about the rest of the top 10 trends Aite-Novarica Group foresees impacting the property/casualty market in 2023, please read our report Top 10 Trends in Property/Casualty, 2023: Turning Disruption into Opportunities or reach out to me at mconlon@datos-insights.com. You can also watch the recording of our February 9th webinar, where we explored each of these trends in detail. Click here to access the recording.

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Be Willing to Take Risks

Our panelists mentioned their willingness to take on high-profile projects as being one of the best things that prepared them for their CEO roles. Taking on high-profile projects can help you gain visibility within your organization, which can open you up to future opportunities. Our panelists credited these projects with allowing them to learn more about the different business functions of their organizations and how those units work together.

When discussing their experiences, our panelists stressed the importance of taking risks when choosing projects. The key to this is to make sure that the risk is calculated when taking on a new project. One panelist noted that you should “be patient enough to learn, but impatient enough to take risks.”

Find Key Opportunities

Our panelists advised not focusing on looking for opportunities that are promotional, but taking on new opportunities that will teach you new skills or help you grow. Even taking new roles or opportunities that are lateral moves can help you gain critical skills that will benefit you in the future. One panelist described how her experience taking on new roles taught her how to ask good questions and rely on the expertise of her team, which helped prepare her for future opportunities.

Learn the Business

According to our panelists, learning how the business side of your organization works and, in particular, how your organization makes money is key to being a valuable contributor. Gaining an understanding of the various functional areas within your organization—and taking on roles within those areas—can prepare you for management roles that encompass a variety of business units. Our panelists also noted that people in IT roles can have great success because the nature of their work is to understand business needs and develop solutions that work for the company.

Cultivate a Network of Mentors

All three of our panelists credited part of their success to having a network of mentors. The mentorship relationships they found to be most effective were ones that grew organically and allowed them to ask questions in a nonjudgmental environment. If possible, our panelists recommended that you should seek out mentors from both within and outside of your organization to give you more perspectives as you navigate your career.

The next virtual meeting of the Aite-Novarica Women’s Network, “Perspectives From Developing Leaders,” will take place on October 26, 2022, led by Aite-Novarica Group Senior Principal Deb Zawisza. More information is available at https://aite-novarica.com/womens-network.

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We kicked off the meeting with a discussion of time management systems. Using one or more time management systems, such as Franklin Covey or Pomodoro, can help you stay focused on high-priority tasks where you deliver unique value. The Franklin Covey system was life-changing for me during the early years of my career, and I still use the principles of list management and prioritization every day.

We then discussed the sage advice offered by Greg McCowan in his bestseller “Essentialism”: understand that it’s okay to say no; schedule time each day to think, analyze, and plan; and do the hardest task first each day.

We wrapped up the presentation portion of the meeting with a few tips and tricks on meeting and email management to optimize the time you spend on each.

Keep Work and Home Separate… But Not Too Separate

Though panelists emphasized the importance of not letting work and family time spill over into each other, practical time management involves some convergence between work and home schedules. One panelist shared that she keeps separate paper to-do lists for work and home, but often puts personal appointments on her work calendar to remind her of “hard stop” times and help avoid the temptation to work later into the evening.

Another panelist shared that one technique you can use to avoid constantly checking emails at home and increase your focus in the workplace is a “VIP list.” Create a list of 5-6 people whose communications you’ll want to know about immediately and toggle your smartphone’s settings so that only their notifications will pop up straightaway. You can check other emails and texts as you have time, comfortable in the knowledge that a message from your daughter, spouse, or boss won’t be silenced.

Learn to Let Go by Trusting Others

At some point, many women will find that there is simply not enough time in the day to balance everything they need to do. Some women get used to just doing everything themselves. One of our panelists shared a story about noticing she was always the family reunion planner despite having the busiest career among her six siblings. When she shared this observation with her mother, her mother reminded her of the maxim, “If you want to get something done, give it to a busy person.” If you’re swamped by excess responsibilities, evaluate whether a task is a good use of your time specifically, or whether it can be delegated to your colleague, babysitter, or family member.

Especially if you’re in a senior role, there are likely smart and capable people in your workplace who are searching for opportunities you have the power to provide. Make it a win-win situation by entrusting them with a task you typically do yourself. You may have to invest more time helping them to begin with, but in the long run you can save a lot of time while simultaneously cultivating work relationships.

Maintaining Control When Things Don’t Go as Planned

No matter how good you are at time management, sometimes unexpected events will crop up; it’s impossible to exert complete control over your day. Overmanaging your schedule can be problematic, too—causing undue stress with micromanagement. Don’t beat yourself up if you don’t follow your system perfectly due to dealing with something unforeseen. If you’ve prioritized thoughtfully and effectively, even if there hasn’t been enough time to get everything done, ultimately you can feel good about having done the best you can.

During the meeting, we reviewed the information gathered from the pre-meeting survey. From this we were able to see that many of us have challenges and frustrations with getting the most out of our time. But several Network members found that applying some of these best practices and staying focused on what we do well really can help us be most effective and impactful to everyone.

The next Virtual Meeting of the Aite-Novarica Women’s Network will take place on March 30, 2022 on the topic of “Talent Strategies for the Evolving World.” Speakers will include Aite-Novarica Senior Principal Carey Geaglone. More information is available at https://aite-novarica.com/womens-network.

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