Insurers are increasingly looking beyond traditional risk transfer as new technology gives carriers a greater ability to identify hazards earlier and help policyholders prevent losses, according to senior leaders at Lloyd’s and The Hartford.
The shift is being driven by growing catastrophe exposure, widening protection gaps and advances in data analytics, artificial intelligence and environmental monitoring. However, insurers are also becoming more selective about which technologies they adopt, with commercial value depending on whether a solution can improve outcomes and fit into established workflows.
Matt Scott (pictured on the left), The Hartford’s head of property and casualty innovation and risk services, said risk mitigation represents one of the clearest opportunities for insurers to deliver additional value to customers.
“Today we have technologies, data sources and analytics where we can identify risks earlier, provide insights sooner and work with them to prevent or reduce losses before they occur,” Scott said. “That's a better outcome for our customers.”
Businesses are increasingly looking for insurance partners that can help them strengthen resilience, he added, making prevention a more meaningful part of the carrier-policyholder relationship.
That approach is particularly relevant as insurers confront complex and interconnected risks including wildfire, flood, cyberattacks and infrastructure deterioration. New technologies are giving underwriters access to more detailed, localized and potentially real-time information, supplementing the broader view traditionally provided by catastrophe models.
Dawn Miller (pictured on the right), CEO of Lloyd’s Americas and chief commercial officer at Lloyd’s, said the growing use of more granular information should not be viewed as a rejection of established catastrophe modeling.
“I do not believe it's a shift away from catastrophe modelling, but a recognition that insurers – in the face of an increasingly complex risk environment – need more granular insights alongside traditional models,” Miller said.
Many technology companies are concentrating on resilience and helping customers understand and reduce losses before they occur, rather than focusing solely on predicting the severity of a potential event. This is particularly relevant in the US, said Miller where “the frequency and severity of natural catastrophes are driving demand for more actionable, real-time insights at a local level.”
“Greater insight equals more impactful outcomes to address protection gaps,” she added.
The ongoing challenge for insurers is distinguishing genuinely useful innovation from technology that appears promising but proves difficult to deploy commercially. Scott said The Hartford assesses insurtech solutions according to whether they produce measurable improvements in loss prevention, safety and resilience. Structured pilots allow the insurer to test products in real-world settings before considering wider implementation.
“Just as important, the technology must fit into the workflows of customers, brokers and carriers,” Scott said. “Innovation only creates value when it's practical enough to be adopted at scale.”
That focus on integration is becoming increasingly important as insurers test AI across claims, underwriting, delegated authority oversight and operational functions. While the technology may accelerate processes and improve accuracy, it must still address an identifiable business problem and work within existing systems.
The Hartford’s collaboration with Lloyd’s Lab has reinforced the importance of combining insurance knowledge with specialist technology expertise, Scott said.
The Hartford has supported Lloyd’s Lab through Syndicate 1221 since 2020, providing 11 mentors to 15 accelerator teams. The program brings startups together with underwriters, brokers and other market participants to test whether proposed solutions can address practical insurance challenges.
Lloyd’s Lab has also built substantial links with the US technology sector. Forty-seven US startups have participated in its accelerator program, collectively raising more than $600 million to tackle exposures including hurricanes, wildfires, cyber threats and AI-related risks.
Miller said startups across the latest cohort are developing tools to assess flood exposure, monitor infrastructure deterioration and identify environmental hazards. Cyber-focused companies are helping insurers detect vulnerabilities earlier, while others are developing tools intended to make complex placements more efficient.
However, moving from a successful pilot or presentation to broad market adoption remains a significant hurdle. “For many of these companies, the challenge will shift to scaling adoption,” Miller said. “Several are already gaining commercial traction, and the next step is helping those solutions become embedded more widely across the market.”
That will require continued collaboration between technology companies, insurers, brokers, capacity providers and investors. It will also require startups to demonstrate that their products can deliver consistent results beyond a controlled pilot environment.
“Ultimately, innovation only creates impact when it is tested against real market needs and adopted at scale,” Miller said.
