Explore Our Platform

Insuring new technologies: is the industry really ready to evolve?

Back to News
Published on:5th December 2023
Social Share

At the recent Insurance Insider London Market Conference, we were struck by how many conversations felt like a repeat of those we were having last year. Themes of technology, DE&I and ESG have barely moved on in twelve months, but is this a reflection of the normal pace of change in an industry infamous for its (lack of) speed of innovation? Could we be doing more to move these conversations on? We had an excellent opportunity to do just that in our panel session, “Insuring New Technologies”. Send’s Head of Revenue, Lloyd Peters, was joined on stage by EDII’s Caroline Bedford and George Beattie from CFC, to debate the key role of new technologies in helping the industry to evolve, but perhaps more importantly, share some key advice on turning intention into action.

Embracing the AI-enabled workforce

There’s still much uncertainty around how technology, specifically artificial intelligence, will impact the insurance workforce of the future. George compared the march of AI to the Industrial Revolution, but this won’t be the sooty, noisy revolution of the working classes, it will be a silent revolution impacting white-collar workers first and foremost. George explained that this revolution comes in three broad phases:

  1. AI continues to be something of a novelty, helping workers to cut corners.
  2. It then starts to alleviate manual and tedious processes such as double-keying and data entry.
  3. It will finally start to completely replace some of the roles we see as being important.

This may sound scary, and Caroline agreed that what we’re about to go through will be “terrifying and thrilling in equal measure”, but one thing is clear, now is the time to get on board.

Looking at the types of innovation we’re seeing, and how it’s being applied, it’s clear that though roles within our industry will have to fundamentally change, they won’t completely go away.

This evolution of technology will demand a different set of skills than those we’re used to looking for today, but this presents an exciting opportunity to take insurance in new directions.

I before E, except after the revolution

The term ‘knowledge-based industry’ will have a different meaning in ten to twenty years according to George. Whereas now we value intelligence and data gathering and analysis skills, as AI evolves, machines will be able to do all that well. However, for the foreseeable future, what they cannot do is replicate those uniquely human characteristics and skills, the Emotional Quotient (EQ) that complements the IQ. The panel agreed that in the future essential and skills, like digital fluency and agility, putting customers at the heart of products, and design thinking will be the most valuable, therefore, nurturing sustainable skills in those areas will help businesses navigate change.

Lloyd agrees with these points but adds that in the case of underwriting, there will still be a huge role for skilled, knowledgeable professionals to interrogate the decisions that AI is making. Right now, artificial intelligence struggles with context, it will get better, but it won’t become perfect overnight. For those still concerned about how their roles fit alongside technology, there is plenty to be positive, even excited about. Lloyd suggests that as the inaccuracies in AI get harder to detect, experts with great subject matter knowledge and a technical inquisitive mind will be vital for interrogating AI results and spotting inaccuracies, “there’s a role to play for people who know the subject, it will be slightly different.”

From people to products

The industry is under pressure to develop and deploy new and innovative products to respond to emerging risks, and for Lloyd, technology enables insurers to live the philosophy that “you’re not going to get products right the first time.” The right technology can ensure that product development can be an iterative process, he continued:

“You need to get them [the product] out there, get feedback on how they survive in the wild, and continually evolve based on customer feedback and how the market perceives it.”

Customer feedback is crucial here, as George reminded the audience that though we love insurance, there is a danger that in the rush to get products out, we can be quick to launch products our customers don’t really care about.

“We do have to be ruthlessly pragmatic about why we’re selling new products, we have to assume the buyer doesn’t care and be really acute about connecting their exposure with a need for product.”

Without the right technology estate, Lloyd warns that companies could spend a significant amount of time building a new product in legacy estates at cost, which they are then unable to change or develop quickly in line with what customers really want.

When we’re looking at the role of technology in developing new products, Caroline argued that it’s crucial to think about the ultimate customer. In many cases, the technologies they’re using are outstripping ours. The risks they’re facing have already changed the way they run their business, but have we got a good enough understanding of this? “When we talk about the impact emerging technology is having on us as an industry, we have to recognise that we serve clients, and we need to ensure the products we’re creating fit their needs.”

Top takeaways – what’s next?

For those keen to stay ahead of the innovation curve, Lloyd urged insurers to find the right balance between proactivity, control, and patience. He likened innovation to a train journey made up of many stops, where you don’t know exactly where the next stop will take you. In this analogy firms can fall into one of three pitfalls:

  1. If you get on too quickly and don’t take due care and attention – you might come off the track entirely. You might not be trusted to get on the train again.
  2. If you put too much pressure and expectation on the first stage, you might be frustrated at the short a distance it’s taken you and get off the train at the first stop. Others who stayed on the train will keep moving ahead of you.
  3. If you wait until the route is clearly laid out before you board the train – your competitors will be many stops ahead of you. You might struggle to catch up.

It’s a long journey, but it’s important to be proactive, controlled and patient; over time the innovation ‘train’ will advance the industry a long way compared to where it is now.

Caroline, Lloyd and George agreed on the importance of collaboration. Though competition is good for the industry, we must be alive to the benefits of collaboration and knowledge sharing. Partnerships are important, particularly in the growing insurance ecosystem, Caroline warned, “don’t wait until you need a partnership, to look for a partnership”. Companies that can help bring the transformation process together will be increasingly in demand, build those partnerships now, and don’t be afraid to collaborate early on.

Innovation doesn’t have to take a big bang approach, and it doesn’t have to involve overhauling everything you’ve spent years building. Caroline urged businesses to look at where AI and technology may already exist within an organisation, and what experience exists, rather than starting from scratch. George agrees that there’s a balance to be met between an iterative innovation of core structures that support the business, and the big innovation projects.

Lloyd finished the session by calling on the industry to change its relationship with perceived ‘failures’. Setbacks are an inevitability when innovating, but rather than a negative, it brings opportunities to learn and evolve. If we can share those failures and subsequent learnings with each other, the whole industry can pull forward together and we can hopefully have different, more evolved conversations next year.

Looking for more information or to book a demo?

Book A Demo

Join Send's 'INFUSE' webinar community to connect, learn, and shape the future of insurance.

Find Out More