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25 March 2022

3 things I learnt from Insurtech Insights Europe

Two days, 4,000 people, a variety of panels and roundtables, and a whole host of innovative ideas – Insurtech Insights Europe certainly had a lot of lessons for everyone. Read on to find out about our co-founder Matt Scott's top picks from the conference.

1. The future of underwriting is (not all about) AI

As well as taking in all the conference had to offer, I also had the honour of hosting a series of roundtables on the future of underwriting.

These sessions created a wealth of different conversations, but a consistent element across all of them was the idea of AI, as well as machine learning and even deep learning, and the benefits these can bring to the insurance marketplace.

Technologies such as these obviously have had, and will continue to have, a big impact on the insurance industry.

To date, a lot of the benefits of these technologies have been realised in the personal lines market, with some at the roundtables saying it has been used to grab the “low-hanging fruit” and make life easier for those straightforward or vanilla risks that underwriters have never had difficulty pricing.

For some, this has created the issue of making certain risks almost uninsurable in today’s market as insurers continue to focus too hard on algorithms and technology-led underwriting decisions.

This is, of course, a concern for the industry, but helpfully many in our discussions saw the future of AI extending into commercial lines and the more complex risks that make up the more interesting end of the market.

One of the primary benefits of AI is automation and taking unstructured data and making useful sense of it without the need for staff manually scanning documents to find the information they need.

Insurance DataLab knows a thing or two about this after trawling through thousands of regulatory returns and company accounts to extract the data for our platform – freeing up our subscribers to do the interesting stuff by taking the legwork out of these tasks.

Not only does this cut time and reduce costs, but a by-product of this is increased job satisfaction for existing workforces in an area that has traditionally struggled to attract new talent.

This can help increase staff loyalty and retention, and also lead to improved innovation.

And it is here that the roundtables saw the real benefit of AI – creating a work culture that is primed for innovation and attracting the best talent the market has to offer.

So while AI will undoubtedly have a big part to play in the future of the insurance industry, underwriters will continue to be a decisive factor in the success (or otherwise) of an insurance company. Technology just gives them the tools to make better and faster decisions.

2. MGAs are the key to a more flexible future

Panel sessions are a key part of any conference, and one that particularly caught my eye was the final one – Where next for the MGA in modern insurance distribution.

The panel had a stellar line-up and raised some really interesting points on the benefits MGAs bring to the table in the modern insurance market.

Chief among these was the idea of flexibility.

Unencumbered by legacy systems and decades worth of red tape, MGAs can be much more nimble than the traditional insurers that take up so much of the market.

This allows them to create innovative products aimed at specific niches, or to use technology to create automated solutions that take the mass market by storm.

The panel was questioned as to why, once they’ve experienced the products brought to market by an MGA, insurers don’t just go out and do it themselves, cutting out the middleman.

Munich Re’s John Pyall said it was all to do with specialisms – insurers know what they are good at, and MGAs know what they are good at. The best stick to those roles and continue to work in partnership to create value that is greater than the sum of the parts.

Of course, there have been many an MGA to make a successful move from purely underwriting a policy to also retaining the risk on their balance sheet as a full-stack insurer. And that will continue.

The real challenge comes from the amount of capital needed to make this move, and many MGAs will see the partnership route as a faster and more effective route to achieving scale in a challenging marketplace. At least in the early days post-launch.

What is certain is that MGAs will continue to be a mainstay of insurance and insurers will continue to make the most of the opportunities that come from partnering with these young and entrepreneurial businesses.

3. Innovation is ripe

There were some fantastic innovations on display at the conference, not least on the Tech Showcase Stage where one of our partners took to the stage in the form of Paul Harvey from Adiona.

Paul spoke brilliantly on how Adiona are placing the customer at the heart of what they are doing with their soon-to-launch telematics business with a difference, and I can’t wait to see how they do as they start to write new business.

Away from the stages there were some interesting conversations to have too, and I had close to 30 meetings across the two days of the conference (sorry if I didn’t find the time to meet you).

I particularly enjoyed hearing about Kita – a new business with the aim of insuring carbon removal solutions.

Not only is this an incredibly innovative idea – the first of its kind – but it is also a tool that can add great scale to the selling of carbon units, something that to date has lacked tailored insurance products for their key risks, namely under-delivery on pre-paid contracts.

Such solutions are key to the future of our planet, and the fact that insurance is at the heart of these new initiatives is a fantastic achievement for our industry.

This also shows just how innovative the industry continues to be, creating new products and new solutions for risks that I didn’t even know existed.

Who knows what new innovations we might see next year? I for one can’t wait to find out.

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