A Shifting Insurance Market Requires Shifting Priorities in 2024

InsurTech partnerships will continue to bridge the technology gap, enhancing risk assessment accuracy, streamlining operations, and customizing experiences for both insureds and distribution partners.

(Image credit: Hassan Pasha/Unsplash.)

With the first month of 2024 already drawing to a close, the insurance industry finds itself facing immense challenges in volatile market conditions. In a bid to prepare for these conditions, we can expect to see a shift in carrier behaviors, with a renewed focus on claims management, increased investment in risk mitigation, and renewed focus on partnerships to deliver more value to their customers.

Elevating Claims Management

Claims management will take center stage for insurers and MGAs in the year ahead as we battle an increasingly aggressive plaintiff’s bar. The status quo isn’t serving insurance providers or their customers, and carriers will seek out new ways to resolve claims in the quickest and most cost-effective way. Using traditional claims processes can take years to resolve, creating stress and financial uncertainty for both carriers and especially small businesses who don’t have the resources and experience to defend themselves.

Using industry data to predict claim patterns is no longer a competitive strategy for carriers. We can expect to see a greater investment in technology infrastructure to support insureds and reduce costs, especially in a turbulent market. An efficient claims management procedure unlocks faster claim processing, reducing spend per claim and ultimately leading to stronger customer retention.

Data and automation will play an even more crucial role in claims management in the year ahead, including stronger analytics and more efficient operations. When incorporating data into the claims process, carriers should consider standardizing their data sets and consolidating existing sources. This will help build an organized, scalable system that supports evolving analytics and automation. It’s also important to factor in data quality, so it’s best to build in regular data validation exercises.

Investing in Risk Mitigation

Amid an increase in claims frequency, carriers will invest more heavily in risk mitigation to help insureds prevent incidents from happening in the first place. Prevention is key, and carriers should provide their customers with the tools and support they need to build better, stronger workplaces. Beyond EPL insurance, carriers should be prepared to help insureds diagnose existing risks and provide assistance mitigating any findings. Comprehensive risk assessments have benefits for both insureds and carriers, helping businesses understand and address existing exposures—lowering both risk and cost of coverage.

Carriers can offer other resources to help insureds reduce risk, like providing a review of HR best practices and offering claims prevention training. With employment laws continuing to change rapidly, carriers will need to equip small businesses with the resources they need to stay informed and ensure compliance. This enables business leaders to focus on their operations rather than trying to keep up with an evolving regulatory landscape.

If a claim does arise, carriers will need to be prepared to help insureds through the claims process by providing legal consultations and claims handling guidance. This helps ‌insureds stay educated throughout the process and supports them as they navigate toward a resolution.

Rebuilding trust through partnerships

These shifting priorities demand investment, but most insurers currently don’t have the capabilities, urgency, or commitment to refactor their systems and processes to put the customer first. To help close the tech gap, we expect to see more partnerships between established carriers and external tech and data MGAs.

Traditional insurance carriers often grapple with several common shortcomings when it comes to technology, including reliance on legacy systems and limited data utilization. InsurTechs can play a pivotal role in narrowing the technology gap for traditional carriers, helping to leverage advanced data in meaningful ways like more precise risk assessments, improved pricing models, and automated operations. These advancements increase operational efficiency and reduce costs for carriers and insured alike.

All of these characteristics create a better product and experience, including for distribution partners. And while it may require more training and support on the front end to train distribution partners to effectively utilize new solutions like APIs and online portals, having an InsurTech partner will better equip carriers to customize experiences and address the unique workflows of their distribution partners.

We can also expect to see more carriers leveraging artificial intelligence (AI) and advanced data analytics to provide distribution partners with predictive insights into customer behavior, underwriting decisions, and market trends.

Conclusion

The combined pressures of tricky external conditions and increased demand for speedier claims management and more efficient risk mitigation, compounded with the need to better utilize tech, will lead to a crucial inflection point in 2024, especially for ‌carriers that have previously been hesitant or wary of InsurTechs. InsurTech partnerships will continue to bridge the technology gap, enhancing risk assessment accuracy, streamlining operations, and customizing experiences for both insureds and distribution partners.

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Mike Levins //

Mike Levins is Head of Insurance at Counterpart. Mike previously was the Head of Broker Relations and US MGA Operations at Hiscox. Levins oversaw the Midwest region with ~20 underwriters offering 13 different product lines, the primary lines being management liability, professional liability, and cyber/technology. Prior to Hiscox, Mike was Head of Sales at CNA, where he guided underwriting teams to produce over $6BN in sales.

Counterpart pairs trusted insurance experts with market-leading AI and robust data to enable small businesses to do more with less risk. Counterpart’s management and professional liability insurance products are available through over 1,000 of the most respected brokers in the country. Its proprietary underwriting systems are complemented by advanced claims management and risk mitigation services that help its customers proactively reduce risk and grow with confidence. For more information, visit yourcounterpart.com.

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