In response to rising reinsurance costs and persistent claims inflation, insurers are gearing up to redefine their business models in 2024, according to the Sollers Prediction Report.
Anticipating a second consecutive year of grappling with claims inflation, companies are set to boost operational efficiency through increased process automation. A key focal point for this transformation is the adoption of cloud-based solutions and advancements in data management.
Unpredictable weather patterns and heightened reliance on reinsurance are compounding financial pressures, with reinsurance costs remaining elevated.
To address these challenges, insurers are intensifying efforts in the implementation of cloud technology and bolstering data management capabilities.
The impending integration of Artificial Intelligence (AI) into the industry is driving a strategic emphasis on IT infrastructure investment.
Niels Zijderveld, Chief Sales Officer at Sollers Consulting, emphasises, “Artificial intelligence is about to fundamentally change the insurance business. But to utilise it, insurers need to invest in their IT infrastructure.”
Insurers are expected to focus on strategies that reduce claims costs, prioritising cost-efficient models through automated distribution and underwriting.
In the UK, insurers are anticipated to introduce more cost-effective insurance models, including embedded insurance. However, legislation on autonomous vehicles is seen as offering only a partial solution for insurers’ access to vehicle data, potentially leading to a reduction in motor insurance activities.
“The cloud will play a dominant role in IT projects to achieve a higher degree of automation,” remarks Aleksander Czarnołęski, Senior Consultant at Sollers. UK insurers are projected to migrate to the cloud to foster innovation, enabling the provision of cost-effective customer services.
The year 2024 will witness robust activities among Lloyd’s syndicates and London Market insurers as they embrace Blueprint II, with application programming interfaces playing a pivotal role.
The adaptation of data models and communications systems to meet the requirements of the Core Data Record set through Blueprint II is expected to be a central theme.
Jakub Wróblewski, UK London Market Lead, notes a growing trend towards integrated underwriting solutions that enhance efficiency in data processing. Underwriting Workbenches, facilitating the integration of diverse data sources, are expected to gain popularity.
As the industry braces for a year marked by regulatory and political influences, upcoming elections in the US and likely in the UK will shape the insurance landscape.
The EU is anticipated to expedite efforts in creating legal frameworks for data usage and AI, directly impacting the insurance sector.
The Sollers Prediction Report, drawing insights from discussions with insurance industry executives and professionals across 15 markets in Europe, America, and Asia-Pacific, provides a comprehensive outlook for the evolving landscape in 2024.
