The world’s a hot mess – literally. We’re facing unprecedented weather patterns fueled by climate change, uncertainty stemming from financial volatility and worsening business results.
All while carriers struggle to determine which AI solutions (among thousands) to choose. It’s enough to make you want to shut the doors and windows and turn on the TV.
Speaking of TV …
Ted Lasso represents the finest television ever created; fight me! And in its honor, I’ll share my top 3 insurance Lasso-isms for the coming year.
Be a Ricky Bobby
“Who wants to go fast?” In Talladega Nights, Ricky Bobby raises his hand, hops in that sweet Laughing Clown Malt Liquor car and finishes third overall in his first race.
Our constant – and sometimes ridiculous – encounters with AI feel like the plot of a silly yet epic movie. However, there’s truth in the fiction. There’s opportunity in the madness.
According to a global survey of 2,000 IT decision makers by Blackberry, 75% of organizations are considering or implementing bans on ChatGPT.
You can’t win the race if you’re not in the car.
By one McKinsey estimate, generative AI tools can add $50 billion to $70 billion in value for insurers globally. So be a Ricky Bobby and get in the race. Raise your hand and say, “I want to go fast!”
Be a sloth
In periods of ludicrous change, “Go slow to go fast.” Sloths can move fast – and be efficient – when it matters most. Like when they poop.
That’s right, nature’s butt-of-everything apathy joke is a polished example of efficiency that only goes to the bathroom once a week. It really does beg the question of how something so slow has survived for 64 million years (insert insurance joke here).
Critics often describe the insurance industry as inefficient, myopic and slow. That’s OK – there are advantages to careful consideration, especially when it comes to any new technological innovations.
In the Deloitte 2024 Global Insurance Outlook, adapting technology to create a more customer-centric focus also includes embracing culture to “close the trust gap that has often undermined the industry’s credibility.”
Insurers will only have a handful of opportunities to meaningfully adopt AI. Trust is everything in the insurance business, and a rushed maladaptation can make a mess pretty fast.
Own your notoriously frustrating sluggishness and go fast when it counts.
Be a snowflake
Every snowflake is different, and each risk is unique. Segmentation only goes so far in matching risk to price.
Actually, behavior will win the day in pricing (or rate making) – the global telematics market is projected to reach $12.7 billion by 2030. The Insurance Journal reported on a recent study that found more than 70% of commercial auto insurers offer usage-based insurance products (UBI). Yet, adoption with agents and brokers falls between 10% and 15%.
We must close this gap.
The same publication cites a TransUnion report that shows a 33% increase in the number of consumers who are using telematics as a way to lower premiums and offset the real impacts of inflation.
But telematics is just the tip of the iceberg. Technological innovation should be in pursuit of the “good life.” For insurance, it’s not just about lower rates; it’s about using technology to transform the industry’s value proposition from indemnification to prevention.
As AI evolves, data consumption increases and model training accelerates. Behavioral analysis, in turn, can provide deep, individualized insights that translate to loss avoidance and reduction.
Here’s an entire podcast series on predicting and preventing losses from The Institutes.
Insurers and consumers no longer have to accept categorization in their insurance journey. We can demand more. Say no to segmentation and be unapologetically you!
The big finish
People need insurers now more than ever. Swiss Re reports the global protection gap has now reached $1.8 trillion, an all-time high, and 43% of risks are uninsured.
The unfortunate reality is our most vulnerable populations are being pushed fast and first into this chasm.
Insurance is a noble profession. We exist to protect what matters most in the direst times. We can all agree something has to change and it starts with us.
So, where do we start?
My advice is let’s look ahead, think different and work together: Lasso-isms and all.