The insurance industry continues to evolve rapidly as new technologies emerge and mature. Datos Insights’ recent report, Emerging Technology for Property/Casualty Insurers 2024, provides valuable insights into which emerging technologies property and casualty (P/C) insurers are adopting and piloting in 2024. The report is based on a survey of P/C insurer CIO members of the Datos Insights Insurance Technology Research Council conducted in Q2 2024, representing a broad cross-section of P/C insurers. Here are some of the key takeaways:
AI and Machine Learning Remain Top Priorities
Artificial intelligence (AI) and machine learning (ML) continue to be major focus areas for P/C insurers, especially larger carriers. The survey found that 47% of large P/C insurers have deployed ML capabilities, with another 21% currently piloting or planning to pilot ML. For midsize insurers, 26% have deployed ML, with 13% piloting. Use cases span underwriting, claims, and customer service.
Unstructured text analysis is another key AI application that insurance carriers are focused on, with 53% of large insurers and 13% of midsize insurers having deployed capabilities. An additional 26% of large and 30% of midsize insurers are piloting this technology. This allows insurers to rapidly ingest and analyze text from forms, applications, and other documents.
Generative AI Gaining Rapid Adoption
One of the most notable trends is the swift uptake of large language models (LLMs) and generative AI. Many insurers, especially larger ones, have already deployed or are piloting out-of-the-box commercial LLMs. The survey found that 42% of large P/C insurers have already deployed out-of-the-box commercial LLMs, with another 32% piloting or planning pilots.
There’s also significant interest in more targeted LLM applications trained on company-specific data. This swift uptake suggests that generative AI is quickly moving from experimental to practical business applications in the insurance industry.
Cloud Migration Continues
The shift to cloud technologies continues unabated. Cloud-native computing and cloud data platforms are seeing strong adoption rates across both large and midsize insurers. This trend reflects the industry’s recognition of the cloud’s potential to enhance scalability, improve data analytics capabilities, and drive operational efficiencies.
Emerging Technologies to Watch
Several emerging technologies are garnering increased attention from insurers, though adoption rates remain relatively low. These include AI-enabled robotic process automation (RPA) and process mining. While not yet mainstream, these technologies could represent the next wave of innovation in the industry. Interestingly, technologies like AR/VR, biometrics, and wearables are seeing relatively low adoption and interest from P/C insurers currently. This report suggests insurers are focusing investments on technologies with clearer ROI in the near-term.
Conclusion
The rapid pace of technological change presents both opportunities and challenges for P/C insurers of all sizes. While exciting new capabilities like generative AI are emerging, insurers must carefully evaluate where to invest their limited resources. The trends highlighted in this report suggest that the industry is focusing on technologies that can directly impact core operations, improve decision-making, and enhance customer experiences. This report provides a valuable snapshot of where the industry is focusing its innovation efforts in 2024 and beyond. For a summary of emerging technology trends in the life/annuity/benefits space, see the Datos Insights report Emerging Technology for Life/Annuity/Benefits Insurers 2024.
