ArticleOpinion

The biggest insurance industry trends for 2024

Anna Burge
Anna Burge20-Sep-2023

As we rapidly approach 2024, the commercial insurance landscape is set to undergo some significant changes. In this blog, we'll explore five key trends that we think will shape the commercial insurance industry in the upcoming year.

The biggest insurance industry trends 2024

This article is part of our annual trends series, following on from 2023’s most important trends.

Technology is not only shaping our world but is also significantly impacting our industry - and as we approach 2024, the commercial insurance landscape is set to undergo some significant changes.

The industry continues to evolve, driven by transformative technologies like generative AI that have the potential to benefit the entire insurance ecosystem from carriers to brokers and policyholders.

Increased adoption of machine learning in insurance

With the rapid growth of Large Language Models, the capabilities for data-driven decision making are becoming increasingly sophisticated by the day.

Our recent GPT pilot scheme explored some of the ways generative AI can be used for commercial insurance decision making, and global companies like Zurich are beginning to trial concepts too.

In 2024, AI and machine learning will rapidly become cornerstones in the commercial insurance industry. Insurers are already leveraging AI for algorithmic underwriting, risk assessment, claims processing, and customer service. These advancements will make processes more efficient, providing valuable insights and ultimately lowering costs for both insurers and policyholders.

Data-driven decision making

In a similar vein, the integration of advanced data analytics into commercial insurance should expand significantly in 2024. Through real-time data analysis, insurers can more precisely evaluate risks and personalise policies, thereby optimising pricing strategies and enhancing customer experience.

Insurers are gathering and analysing ever-larger sets of complex data, such as weather patterns, social demographics, and even behavioural data from IoT devices. This information allows for a multi-dimensional approach to assessing risks and policy pricing.

We are seeing an increase in interest from insurers and carriers looking to expand and structure their data for better decision making, and we believe this trend will continue into 2024.

ESG becoming more regulated

In 2023 we predicted that ESG would become a mandatory step in any insurer's due diligence. As environmental concerns continue to gain prominence, insurers are likely to incorporate sustainability factors into their risk assessments in 2024.

The Insurance Insider reported that Lloyd’s has even begun to ‘develop a solution that will quantify greenhouse gas (GHG) emissions across managing agents’ underwriting and investment portfolios.’

Depending on the specifics of these new regulations, London Market insurers that take proactive steps towards sustainability may find themselves benefiting from lower premiums, while those failing to meet environmental standards could face higher costs and regulatory challenges.

Better broking tech with Blueprint Two

A pivotal trend in 2024 will be the advancements of broker technology, driven in part by the Lloyd’s Blueprint Two agenda which aims to introduce the new ‘MRCv3’ in mid-2024. The initiative aims to deliver more efficient, digital-first trading by standardising data exchange and workflows.

This is a significant step towards greater operational efficiency and interoperability within the commercial insurance market. BP2 is mandatory for all brokers operating within the market, so expect to see a lot of brokers making big technological changes throughout the year.

Insurers shifting to advisory roles

We foresee a subtle yet significant transformation in the role of insurers, as manual tasks that once consumed considerable time and resources increasingly give way to automated processes. Processes like data entry, claims processing, and routine customer service are becoming increasingly automated, and we predict insurers will find themselves with the bandwidth to focus on more value-added activities.

This shift opens up opportunities for insurers to assume more advisory roles. Instead of merely being the facilitators of financial coverage, insurers can leverage their expertise to guide businesses through complex risk landscapes.

In fact, as clients are beginning to seek more tailored insurance solutions that cater to their unique needs and risk profiles, insurers may start to offer more customised policies. These offer more than just tailored coverage; they also provide an opportunity to engage in a more consultative way.

The customisation process often involves a thorough risk assessment, enabling insurers to offer value-added services such as risk management advice and preventive measures.

What’s next?

Keeping an eye on these trends will be essential for insurance companies and brokers looking to stay competitive and deliver value to their clients. As experts in technology solutions for the insurance industry, we understand the importance of staying ahead of the curve and are committed to helping our clients navigate these exciting changes.

If you’d like to speak to us about your upcoming technology plans, get in touch.

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