The Qorus Insurance Reinvent Forum in Lisbon was an eye-opener. Simon Cashmore, a long-time collaborator with the Qorus content team, was present. Here are his 10 key takeaways:
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1. Private equity firms look set to continue their buying spree and snap up more insurance brokers in Europe (after recent deals by the likes of KKR, Permira and Synova). Hungry pe firms are making offers of 30 times EBITDA for potential targets. How will carriers and independent brokers react? What happens when pe firms decide to flip their acquisitions and get out of the brokerage business? Further consolidation of the €1.4 trillion European market seems inevitable. Followed, most likely, by a slump in broker valuations when the bubble bursts.
2. C-suites at big insurers are getting impatient for returns on their innovation spending. Payback times are contracting sharply. Contributions to the company’s bottom line are now expected within two to three years. Obstacles to successful innovation continue to be corporate cultures that resist change and lack of clarity about the impact of regulations.
3. Everyone’s excited about GenAI but insurers are using it for customer retention – not client acquisition. Contact center support and document processing are the most common early use cases. Most insurers view current GenAI products as too unstable for greater exposure to customers. Future applications could include interactive assistants that advise clients on the on the cover they need when planning purchases, travel or life changes as well as intelligent communications agents that are sensitive a client’s specific contexts and needs.
4. Cybersecurity will become an increasing and relentless challenge. The power, ease of use and ubiquity of GenAI will force insurers to strengthen the security of their ID authentication processes and other customer touchpoints. Greater investment in AI-powered security and risk management solutions will be essential. The threat of rising cybercrime however does offer substantial business opportunities for insurers.
5. Social empathy and inclusion are emerging as driving forces for insurance innovation. Irish Life, for example, is using AI to take some of the pain out of life insurance claims. It’s CARA intelligent medical claims assistant has simplified the claims process and cut payout times from weeks to days. Similarly, Chubb is using its extensive global reach to establish partnerships that
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6. Open Insurance will trigger major changes in the insurance value chain as customer data becomes more accessible to licensed third parties. To thrive in an open data environment, insurers will need to further improve operational efficiency, through increased standardization and automation, while continuing to enhance the customer experience and drive up revenues. Underpinning this transition is likely to be shift from selling products to providing higher margin solutions.
7. Digital ecosystems are becoming vital platforms for the delivery of insurance innovations – particularly embedded offerings. Insurers, however, are at the early stages of mastering the technology and business partnerships that underpin such ecosystems. Early wins include the rollout of loyalty programs that stretch across multiple ecosystems.
8. Advances in AI and data analytics are enabling insurance providers to significantly improve customer segmentation, tailor and bundle product offerings, and drive up sales. Bancassurance providers such as Portugal’s Millennium bcp are reporting impressive insurance sales to their banking customers.
9. Insurers are underestimating the scale of the shakeup that’s going to rock the automotive insurance business with the rise of the mobility sector. EVs, subscription services, onboard digital technologies, and micro transport options will dramatically change the role of insurers and force them to secure a wide range of cross-sector partnerships.
10. Legacy - the subject that must not be named. Legacy IT, systems, processes and products continue to drive the bulk of insurance revenues and profits. Yet there was little mention during the forum of how insurers are using innovation to migrate from legacy to digital environments. Such challenges may well be the legacy that many C-suites leave to their successors.
11. Bonus bullet: Nothing beats personal contact. Post-Covid company travel restrictions and ESG sensitivities have dampened attendances at international industry conferences. The Reinvent Forum provided insurance executives with a valuable opportunity to make personal connections with their peers and to share ideas and insights about the future of their industry.
The biggest surprises? Numbers 2, 5 & 10.
Qorus next in-person event will take place in Dubai on 23-24 October 2024. Book your seat
