Jim Garrity and I recently ventured to Las Vegas for the 2021 InsureTech Connect Conference to keep a finger on the pulse of the insurance industry. We’re obsessed with analyzing, understanding, and helping our clients adapt to the latest trends, technologies, and roadblocks. This was the perfect place to represent a hungry, technology consulting firm like SingleStone whose experts have the skills and experience to support an industry that’s rapidly adapting to today’s digital-first world. We immersed ourselves in discussions with industry leaders and returned with the knowledge and motivation to continue helping companies innovate and stay competitive in the age of information.
Here are our top takeaways from ITC2021
1. The specialty insurance market is open to startups and smaller players
Big players are slower to act with legacy tech and are busy modernizing and protecting their core processes. Capitalizing on market niches and capturing market share quickly is a strong move for smaller players looking for a way in.
Smaller players can win if they:
- Focus on one niche
- Bring a full-service solution for the price of insurance
- Innovate with new data sources to accurately underwrite.
Disclaimer: We acknowledge that there are major barriers to entry for startups and smaller groups with minimal capital, such as the cost of becoming a carrier, legal hurdles, regulatory hurdles, etc.
2. Data helps underwriters make better decisions
Midmarket specialty insurers are underwater with submission volume. As such, many submissions are deprioritized and get no response. Information that could impact future business decisions gets lost because underwriters lack the tools to capture the information from the submission queue. Data can help underwriters prioritize response, process more quickly, and identify the best fit with business lines or entities.
3. Winning in business is not holding the other guy down, it’s running your race better
Chubb CEO Evan Greenberg shared, “Insurance is the art and science of taking risks. Everything else has the pleasure of supporting that.” The role of a leader is to understand:
- What is the organization’s current-state and future-state?
- What can we learn from the market? Where are opportunities for innovation?
- How can I better understand and act on the ideas of my team?
The last bullet is something we embrace at SingleStone. At the end of last year, our CEO Jimmy Chou shared five ways we can embrace humanity in business. One of his suggestions was to tap into the collective wisdom of your team: "Innovation doesn’t happen because we wish for it. It also doesn’t happen in a vacuum. If we want our team to contribute their best ideas, we need to...provide the structure, skills, and tools to support our aspirations."
4. Delivering a great digital experience is not unique to the insurance industry
When creating a digital experience, insurers need to innovate for their customers. Abby Hosseini of Mercury Insurance shared that “it’s always the same three core personas: employees, producers (brokers & agents), or policyholders (the insured).” To discover what makes a great digital experience for each customer, insurers can follow the lead of other industries. Start by understanding the human and business motivations of the personas.
5. Make Big Data actionable for even bigger returns
Data – Insurance is a data-driven industry. In today’s hypercompetitive market, insurers are seeking ways to better manage and leverage data that has long been collected but remained untapped.
Analytics – Create new information from your data. Only with cloud-enabled data architectures can organizations harness the explosion of data and use innovative data science and AI solutions to drive business transformation. This is the stuff that changes businesses.
Big Data offers a sustainable competitive advantage and helps insurers stay relevant in a busy marketplace. Unlock your data’s full potential by illuminating what data matters and how to make these new data insights truly actionable.
6. P&C insurers receive next generation analytics from Data and the Cloud
When it really comes down to it, insurers are data and technology companies. Today’s big players need to level the playing field with newer entrants who are quickly moving the needle (see takeaway #1). They can do this by embracing the cloud and leaving their antiquated systems. A cloud-supported data architecture enables real-time, centralized access to all data sources, structured and unstructured, to drive better business decisions. Individuals and teams can focus on other areas and be more efficient without manually culling data for insights. Instead, it’s at their fingertips.
7. The death of the credit score, what comes next?
The credit score is problematic. While credit data has historically been a common predictor of insurance risk, utilization has posed many regulatory and consumer concerns. The tide is turning.
If insurers can’t price using the credit score, what should they replace it with? For starters, they can structure their unstructured data by segments, price, etc.; they can use dark data, or data they didn’t know existed; they can take advantage of AI & Machine Learning techniques to set premiums based on defined criteria.
8. Migrating to the Cloud will make you money
Here's why...
- Significant business value can be created from cloud-enabled analytics, automation, accelerated product development, and hyper scalability.
- The cloud helps companies optimize application and IT infrastructure costs. It also improves business resilience and cybersecurity and fosters the adoption of the latest digital technology behind the scenes. Migrating to the cloud is an early investment that yields long-term savings.
- Teams can derive insights from real-time data to make better decisions and capitalize on innovation strategies that stick.
9. Build, buy or partner: where strategy meets reality
In today’s competitive environment, disrupting the status quo through growth and innovation is necessary no matter your size or business plan. There’s no golden rule for crafting an effective approach to enhance your presence in the market—it takes exploration.
Explore different growth strategies like mergers and acquisitions, strategic partnerships versus organic growth, carrier research and development, insuretechs, and consultants. But don’t stop there. Explore factors that go into these decisions like revenue, business model alignment, branding, existing capabilities, domain expertise, cultural fit, risk appetite, and more. Exploring these strategies and factors will drive you towards the mission of your strategic roadmap.
Were you at ITC? Shoot us a message with your biggest takeaways.
Not at ITC but trying to stay competitive in the age of information? Connect with me or Jim Garrity at the link below to keep this conversation going!