In recent years, innovation in Insurtech has been driven by higher customer expectations for personal, efficient experiences, the rapid advancement in AI and the urgency at which risks like climate change and changes in cyberspace are threatening business productivity.
Here, Mark McIlquham, CEO of Acrisure UK, explores his outlook for innovation and what he deems to be the biggest forces changing the Insurtech landscape.
2024 was certainly ‘The Year of AI’, with Reuters[1] reporting that global computing firm Nvidia briefly dethroned Apple as the world’s most valuable company. This, coupled with a McKinsey survey[2] that reports 52% of organisations (with $500m or more in annual revenue) are establishing teams to drive generative AI adoption, suggests this momentum is not slowing down.
AI and Cyber Risk: A Double-Edged Sword
AI is being used for various functions in Insurtech, helping to streamline risk assessments, fraud detection and claims. Insurers have been using machine learning for some time to analyse large datasets, predict consumer patterns and generate quick and simple premium quotes – all to improve the customer experience. When this technology is combined with the expertise and ‘hands-on’ nature of Acrisure’s network of brokers, there isn’t really many limitations to what can be achieved for Insurtech.
At Acrisure, we are investing heavily in our Auris platform. Launched initially in 2020 by our US-based parent company, Auris is an AI-led platform helping us to build better products and boost productivity. We’re looking forward to bringing this market-leading technology to the UK.
AI advancement continues to be a double-edged sword however, with cybercriminals equally exploiting them to execute sophisticated attacks on all businesses and consumers. In fact, according to a 2024 report by the Department for Science, Innovation and Technology[3], more than half of UK businesses reported having experienced some form of cyber security breach in the last 12 months.
Cybersecurity will certainly be another driver in Insurtech innovation for the foreseeable. Insurers must adapt their technology to become more robust, developing specific coverage for AI-related cyber risks using innovative products from tech industries.
Because most industries will be impacted by the increased sophistication of cyber threats, we predict that there will be an increase in demand for insurance policies to adequately protect businesses and consumers. While having robust authentication protocols and regular firmware updates are imperatives to protecting data, additional measures like training, communication and insurance policies are also vital for hastening financial recovery and maintaining productivity.
Telematics Keeping Insurtech Customer-Centric
One area of insurance which has received a lot of attention in recent years has been the motor market, with premiums for fleets increasing by 21% over the last two years[4]. There are multiple reasons for this, including inflation, the increased threat of theft and an ageing road infrastructure causing more ‘wear and tear’. With this in mind, we predict that more insurers will employ usage-based telematics solutions to help bring down fleet premiums.
Because telematics can be used to help manage vehicle maintenance costs, it is thought to be having a direct impact on reducing insurance premiums on one in four fleets[5].
And it isn’t just the fleet managers who can benefit here – telematics can be used across a variety of sectors and consumers for risk management based on real-time data collection.
Sensors in smart homes, for example, can be used to predict the likelihood of fires, leaks/floods (due to extreme weather events) and theft which could be used to more accurately inform premium costs. While we are still some way from this technology becoming affordable to the average consumer, it’s certainly something we predict will become more popular for insurers to trial.
Fostering Collaboration to Better Innovate
Over the next year or so, we expect to see more company market insurers re-entering the Lloyd’s World Insurance Market, offering insurance customers unrivalled access to specialist policies underwritten by global experts. Acrisure has its own Lloyd’s syndicate, Flux, which fosters a collaborative underwriting model, allowing ideas to flow more freely within the industry.
As we continue to digitalise, collaboration will be pivotal for emerging Insurtech, and this is something we encourage at Acrisure UK. We are made up of 16 highly experienced British businesses, who all have their individual areas of expertise, but align with us on similar cultural values. Our people, employed across these businesses, are very eminent locally for their services, but also often champion community-led initiatives, charitable giving and dynamic workplace cultures. This, we believe, is a significant asset and will absolutely be key to us innovating in the future.
Acrisure is a global financial services company with leading platforms in insurance, reinsurance, payroll, benefits, cybersecurity and mortgage services. Cutting-edge technology
informs and connects clients with customised solutions. It has acquired 16 businesses in the U.K. since 2018, employing over 650 and generating over £100m in revenue. Globally, Acrisure operates across 21 countries, employing over 19,000 people worldwide.
[1] Shankar S & Randewich N, Reuters: https://www.reuters.com/technology/nvidia-overtakes-apple-worlds-most-valuable-company-2024-10-25/
[2] Hall B, McKinsey & Company: https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai
[3] Ell M et al, Department for Science, Innovation & Technology: https://www.gov.uk/government/statistics/cyber-security-breaches-survey-2024/cyber-security-breaches-survey-2024
[4] Roberts G, Fleet News: https://www.fleetnews.co.uk/news/taskforce-welcomed-as-fleets-report-premium-increases-of-up-to-50-video
[5] Araullo K, Insurance Business Magazine: https://www.insurancebusinessmag.com/us/news/auto-motor/telematics-use-grows-in-insurance-as-fleets-report-fewer-claims-crashes–sambasafety-511920.aspx#:~:text=Motor%20%26%20Fleet,-By%20Kenneth%20Araullo&text=Among%20commercial%20insurers%2C%2082%25%20now,increase%20from%2065%25%20in%202023.
