Thousands of insurance professionals have converged on Nevada this week for ITC Vegas, with the massive insurance innovation event arriving at a potentially seismic inflection point for the industry.
Leading executives who spoke to Insurance Business America sent a resounding message about the future: from the rise of parametric products in small commercial distribution to the role of telematics data in assessing risk, embracing transformation is no longer optional, and the companies willing to invest and innovate will be those who flourish in the coming years.
Henry Maley, senior vice president of sales at Mid-America Catastrophe Services, told IBA he’s seeing a significant transformation occur on the claims side – namely, in how files are produced, inspected, and closed.
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“Probably the biggest issue in the claims sector is producing a file with fewer touches,” he said. Drones are increasingly being used to fill that gap, as the industry grapples with both a retiring workforce and surging demand after catastrophe events.
“The accuracy of the drones has increased 100%,” Maley said. “[Before] they were not very accurate. Their images were pixelated, so it caused a lot of problems. Plus, compliance was a big issue. Security, secrecy. A lot of people didn’t like drones flying around their house.”
But that resistance has largely been eroded over the past 18 months, he said, with state insurance commissioners increasingly accepting drone inspections as standard practice.
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On the broader evolution of Insurtech, meanwhile, he said there’s a shift at play from the hype cycles of recent years – meaning industry expectations are now firmly in line with what the tech can actually deliver.
“I think probably five years ago with insurtech, a lot of the innovative people overpromised a product,” he said. “And now [the industry is] starting to promise a product – and there’s more focus on delivering what they say.”
Peter Settel, president and chief executive officer of insurance distribution platform Bold Penguin, told IBA he views parametric insurance as one of the next huge trends set to impact the industry.
“Parametric has already established itself as really important in larger-scale, society-level issues – agriculture protection gap, climate volatility, political volatility,” he said. “We’re looking at downscaling that into distribution, into small commercial.”
Read more: Parametric insurance: everything risk managers need to know
Without broad awareness of parametric among small business owners and their agents, leading with it as a standalone sales conversation might seem a difficult ask. But embedded within a primary commercial sale, using platform intelligence to isolate risk by geography and condition and surface a parametric offer without additional questions, is another story.
“When you downscale a complex product like parametric for the small commercial market, it’s important to have positioning accuracy because there isn’t a broad awareness yet,” he said.
“But if you can use technology and distribution to position it where it makes the most sense, now the agent or whoever is thinking about it has context, and it’ll make it easier for them to think about that.”
He sees parametric insurance evolving into something more integrated: what he describes as a hybrid protection stack in which primary carriers recognize the value of parametric alongside traditional products, potentially through multi-product bundling, coverage offsets, or credits for customers carrying both.
“You have to be in the water before the wave crests in order to ride it,” he said. “I think parametric is a good bet to take.”
William Powers (pictured, top middle), co-founder and chief executive officer at Cambridge Mobile Telematics (CMT), said a single word would define the future of his sector: data.
For CMT, that means expanding beyond automotive telematics into what Powers describes as a world of mobility – drawing signal from phones, IoT devices, two-wheelers, and government infrastructure data points.
“You want to gain as much signal as possible on anything that’s moving, and then you use that for various business cases to build out what your offering is,” he said during a panel appearance alongside Shark Tank investor Daymond John (pictured, top left).
Powers is in no doubt about the impact artificial intelligence (AI) will continue to exert on the insurance industry. “What you might have needed 12 people to do before, you can do with six,” he said. “And then those open headcounts go to supporting the top AI talent.”
