New SMA Blog by Heather Turner, Lead Research Analyst, Strategy Meets Action —
Commercial lines insurers have endured their fair share of ups and downs since COVID-19 was declared a global pandemic over two years ago. And through the course of 2022, geopolitical conflicts and inflation have rocked economies, leading to further uncertainty about the stability of markets worldwide. Undoubtedly, insurers are planning for expected and unexpected events that may disrupt their businesses in the new year, but are these plans shifting how insurers approach innovative transformational technologies?
For years, SMA has been tracking insurers’ plans and progress in transformational technologies in commercial lines and is revealing new insights in the recently published report, Transformational Technologies in P&C Commercial Lines: Insurers’ Progress in 2022 and Future Predictions. The report examines thirteen transformational technologies and their impact now and in the future. What is evident is that investments in digital, artificial intelligence, and connected world technologies remain top priorities for insurers, but data shows they are being strategic about how they accelerate certain technologies forward.
One example of a technology that has high activity around it moving into 2023 is machine learning (ML). Eight in ten commercial lines insurers are investing in ML today, mainly via predictive models, and insurers increasingly recognize its foundational support of other AI technologies and applications. In fact, at this pace, ML is expected to become embedded in nearly every aspect of the insurance business in the near future. Computer vision is on a similar trajectory of becoming a revolutionary technology and is slowly gaining traction within commercial lines. Although some insurers have progressed with computer vision in the past few years, most remain in the beginning planning stages. But given how valuable aerial imagery is for claims and underwriting, solutions based on computer vision are expected to become standard and mandatory within the commercial property segment.
Insurers are also keeping a pulse on technologies that may be further out on their strategic planning horizon but have potential long-term implications. For example, autonomous vehicles (AV) have the capability to transform many aspects of our lives, and tests are already underway in controlled, campus-like environments. And there are vehicles on the roadways with various levels of autonomous features. However, insurers’ activity in AV today is very low – only 18% have plans moving into 2023 – but it is still critical for commercial lines to fully understand the nuances of these vehicles and the risks they may present.
Although some insurers are practicing moderation in their activity and investment in some technologies, it would be imprudent to hold back plans and risk falling behind peers. The rapidly advancing technological environment and the dramatic changes wrought by the seemingly never-ending pandemic indicate that transformational technologies demand constant monitoring. Insurers must continually renew and review strategies to prioritize and address business problems and new opportunities.
For more information on commercial lines insurers’ plans for transformational technologies, see SMA’s recently published research report: Transformational Technologies in P&C Commercial Lines: Insurers’ Progress in 2022 and Future Predictions. Watch for a companion report on personal lines that will be released in the near term.
About The Author
As the Lead Research Analyst at SMA, Heather Turner supports SMA’s advisory and consulting engagements through rich written content, quantitative and qualitative primary research, market and technology trend analysis, and the management of SMA IP materials. Prior to SMA, Heather was managing editor of the NU Property & Casualty Group at ALM, which includes the insurance industry publications PropertyCasualty360.com and NU P&C and Claims magazines. She started her career as a journalist reporting on the property & casualty insurance industry at Insurance Business America and its sister publications in Canada and the UK.
Heather is a graduate of Florida State University, where she earned her bachelor’s degree in Editing, Writing, and Media.
About SMA, a ReSource Pro company
Strategy Meets Action is an industry-leading strategic advisory firm delivering strategic insights, consulting services, and published research to carriers, solution providers, and InsurTech startups. The firm provides insights and guidance on business strategy, digital transformation, core systems and customer experience. Learn more about SMA at www.strategymeetsaction.com.
SOURCE: Strategy Meets Action (SMA)