Innovate to Elevate with GenAI: InsurTech Insights 2024

Wow! Just wow!

InsurTech Insights 2024 demonstrated and highlighted what this industry can do when we bring together some of the brightest, forward-looking, and outside-the-box leaders, influencers, and thinkers for two days. In only their third year, with nearly 6,000 attendees, this was by far one of the most impactful industry conferences in years. InsurTech Insights brought together insurance leaders with technology leaders to discuss, debate, collaborate, and share how we collectively move forward in reshaping the industry. The unified focus on quality, not quantity, and keeping the sessions and exhibit hall together in the same space rather than spread out, created a hive of buzz, energy, and activity that continuously flowed and never stopped.

Part of the buzz is that the insurance industry is waking up to a realization that the operational models and technology foundations used for decades no longer meet the challenges and opportunities of today’s fast-changing world. The impact is being felt across all segments of the industry, with increased operational costs, fight for talent, rising customer expectations, profitability challenges, and intensifying risks. Add to this a dynamic and rapidly accelerating technology landscape, particularly with GenAI, poised for significant adoption and impact. The case is stronger than ever for changing how we do business using a technology foundation with modern capabilities to match modern risks.

Panel sessions and conversations highlighted the speed of business and technology change and the rapidly growing risk of not keeping pace with the essential changes needed for operational excellence, growth, and profitability. Agile transformation, optimization and innovation in insurance is not a future concept but a present-day necessity to remain competitive in the marketplace.

The two days of discussions were packed with insights.  The industry recognizes, more than ever, it needs a redo on transformation, with new operating models and technology that will adapt, innovate, and elevate the business as market shifts and change continue a relentless path forward. The new technology must be built on a next-gen architecture of native cloud, open APIs, microservices, headless and embedded analytics.

Here are some of the highlights:

It’s All About GenAI!

GenAI burst on the scene early in 2023 and is moving at a breakneck speed! And it was everywhere at the conference. But GenAI is misunderstood on what it is, how it is different than AI/ML models, and where it can bring real value to insurance! AI/ML is great for underwriting, fraud, and servicing models, which was discussed in numerous panels. But GenAI value is much greater because of its ability to drive operational efficiency and productivity across the enterprise.

There is lots of talk, but little real actionable value and use! However, this is where Majesco stood out from the buzz!

What was striking is that there was a lot of talk about GenAI, but very little has actually been incorporated and utilized in insurance solutions. Some talked about a point solution using GenAI, but how does that help an entire workflow or business process overall?

Here is where Majesco stood out. Our main stage panel discussion detailed what we are doing from a software platform perspective, what it takes to do it with our partner Microsoft from an infrastructure perspective, and how that aligns with customer expectations for partners. It is not for the faint of heart. It requires forward-thinking, plus an investment in a data and analytics framework, an infrastructure, business solutions, and talent.

Our panel, including Manish Shah, President, and Chief Product Officer at Majesco, Sandeep Mangaraj, Managing Director of Financial Services for Microsoft, and Robert Pick, EVP and CIO for TMNAS, emphasized how GenAI creates new expectations for infrastructure partners like Microsoft and platform solution partners like Majesco on the investment, the pace of adoption, and innovation. The panel agreed — GenAI is poised to exponentially expand technology’s capabilities on top of the previous three in aggregate: Internet, SaaS/Cloud, and Mobility — a massive gamechanger!

Consider the power and operational impact of GenAI — bringing 10-20 times productivity improvement in performing tasks or transactions. Look at an average day-to-day transaction. A particular process that uses 4-5 screens and maybe 30-40 clicks may currently take 10-15 minutes. GenAI can reduce this process to 30-60 seconds! Extend that across the operation and this will drive lower cost ratios and unit costs, boosting profitability and competitive pricing, improving quality and consistency and bending the learning curve of new and existing employees! We are on the cusp of a new level of productivity and operational efficiency that has not been seen in decades, allowing insurers to not only transform, but to optimize their business at the same time, something that has eluded most transformation programs.

If McKinsey is right, GenAI may leave a complicated imprint on the larger forces that help determine success or failure in the business – with core business software being a critical one. Built-in advantages for industry incumbents – both insurers and software companies – will change because of technology switching. Tech migration will increase because companies will quickly seek to leverage proven technologies to drive business optimization, lower costs, and competitive value.

Algorithmic Economy

I loved this concept as it reflected the power of AI and GenAI with NLP in rethinking the insurance industry. Both the continued rapid adoption of AI/ML models to better underwrite, identify fraud, create elevated customer experiences, and the adoption of GenAI to drive efficiencies and operational optimization, are poised to redefine insurance operations like we have never seen before!

The explosion of data and its use through AI/ML models is changing how we do business, what business we do, and providing better risk assessments and insights than ever before. Insurers accelerating their use of advanced data and analytics must have the right technology infrastructure and core solution platform partners – something Bob Pick discussed in our panel – to create real business value across the entire value chain to drive profitability, growth, lower cost ratios and improved combined ratios. 

But to be part of this new “algorithmic economy,” insurers must have a real data and analytics strategy with greater investments and priority than we have seen in the past. The days of incremental investment will no longer suffice because the pace of adoption and change is so great.

Transform and Optimize to Innovate

Transformation, optimization, and innovation were all key areas of discussion on so many panels during the event. It is something we have been discussing for many years. For too many insurers, it has been a continual quest, but one that has fallen short in achieving the business value and ROI promised, creating frustration and hesitation.

But that should not be a deterrent because the pace of market shifts, customer demographic changes, changing and emerging risks, and technology advancement and adoption make it a requirement to transform and optimize. The key reason is that the old legacy and even new legacy technology solutions (on-premise modern highly customized), and their legacy business models can only maintain the way we have done business. They are an unstable foundation, negatively impacting operational efficiencies, cost ratios, and profitability as well as constraining talent, and limiting access to data. They are barriers to the adoption of new technologies like GenAI.

The AM Best report published May 2, 2024, had a very telling financial assessment of insurers with highly correlated innovation assessment scores, noting they had significantly higher net premium written growth, lower expense ratios, and greater efficiencies. Furthermore, more non-innovators were overrepresented among downgrades. This follows the August 25, 2023, report that highlights that only around 5% of both P&C and L&AH insurers are either leaders or prominent – high innovation assessment scores – reflecting the industry imperative to transform, optimize and innovate. My podcast with AM Best’s Edin Imsirovic, just released, discusses these gaps and the imperative to close them. 

Leadership Diversity

The insurance industry is on the cusp of a massive change in employees and talent with a projection of nearly 50% to retire by 2030. This makes attracting, retaining, and developing the best talent a top priority for the industry. InsurTech Insights put this front and center at the conference.

For the first time that I can recall, we had a large array of keynotes and panels of women leaders who were on the main stage discussing leadership, creating change, and driving industry transformation and innovation across all aspects of the business. ITI for the US under the leadership of Megan Kuczynski, demonstrated real leadership by highlighting the importance and value of diversity needed with women leaders. They made it real and valuable. And so many of the women InsurTech leaders, founders, and influencers took time to get together, network and support each other in amazing ways. It was so inspiring.

The combination of retirements and loss of institutional knowledge will be a gamechanger for many insurers, requiring them to truly seek out a diversity of talent, including women, to move forward. The legacy business models, cultures, and lack of diverse talent of the past will not get them to where they need to be tomorrow or in the future.

Just like ITI led by example, each insurer needs to lead by example. Game on!

First Mover Status Advantage

The breakneck pace of change, particularly technology, is challenging the long-term strategies and plans of insurers, making many of those plans irrelevant or out-of-touch. As InsurTech has matured and advanced, we are now seeing the value of first-mover status.

Whether it is bringing new products to market, expanding to new niche markets, or leveraging new technology, there were so many examples of those who are taking advantage of first-mover status. Investment in next-gen technology, including native cloud solutions, rich API libraries, advanced data and analytics, including GenAI, telematics, and so much more, is crucially important to drive profitable growth and competitive market differentiation.

First movers respond by strengthening business fundamentals and foundations while meeting the challenges of a changing market. They are reallocating resources to change how business is done, developing new business models, replacing legacy core systems, expanding distribution channels, and developing new products.

First movers keep a constant sharp focus on both operations and strategy. They are forward-thinking leaders who identify the areas that intersect with the core business operational model and technology foundation that can drive optimization, growth, and long-term business innovation. They recognize that change, business model, and technology are never done, and that we must have continuous innovation. This is something Majesco has focused on – continuous innovation – to enable our customers to rapidly pivot, shift, and adapt to the changes and new technologies (like GenAI) quickly, helping them stay at the forefront of the industry.

Final Thoughts

InsurTech and all the buzz has been around since 2015 with lots of money flowing in for start-ups, insurers, MGAs, and technology companies – its infancy years. It was all about the sizzle, the growth at any cost, and the market splash for disruption and innovation. Existing companies joined the wave, investing in InsurTechs, investing in new technology, and rethinking their business and how it will work with InsurTech.

Today we see a different landscape for InsurTech. One that is continuing to learn and adapt from the last 8-9 years. One that is maturing.

There is still lots of money to invest in InsurTech, but it is now more focused and specific, expecting real business initiatives and real financial returns from investments. Gone are the days of growth at the expense of profitability. Gone are the days of technology hype without real substance.

Reality has taken hold.

We have awakened to the real business challenges and opportunities facing the industry. InsurTech is needed more than ever, but must be sustainable – operationally, financially, and technologically – because we know change is continuing at a relentless pace and we need InsurTech to be viable, reliable, and innovative for the long-term.

As I look back at Majesco’s InsurTech journey I am incredibly humbled, proud, and excited about what we have accomplished as a team and what is ahead. We embraced the InsurTech movement and have been at the forefront of innovation as one of the early adopters of Cloud in 2015 and now have over 90% of our customers in the Cloud – positioning them to adapt and take on new innovations and technology. We embraced a next-gen architecture of native cloud, APIs, microservices, and headless across our solutions.  We embraced the ecosystem of InsurTechs early with our Ecoexchange of partners that bring additional value, but with apps and integrations that are real. We have focused on investment with the acquisition of some of the best InsurTech’s including ClaimVantage, Utilant, Global IQX, and DRC, and accelerated their product innovation and growth. And now we are once again innovating with the industry’s most complete data and intelligence platform with access to all your data powered by embedded analytics, AI and GenAI.  Majesco’s entire solution portfolio for P&C and L&AH is embedded with the industry’s first GenAI assistant Majesco Copilot, bringing a new era of operational optimization and productivity to the industry across the entire value chain with a holistic approach.  

Majesco is excited for the next phase of InsurTech, keeping our focus on relentless innovation to help our customers and the industry bend the operational cost and learning curve, innovate new business models and products, expand distribution channels, create speed to market, capture market opportunities, and meet changing risk demands and customer expectations by creating a next-gen foundation of solutions across the value chain for the future of insurance.

There has never been a more exciting time to be in the insurance industry!