The insurance industry continues to evolve rapidly as new technologies emerge and mature. Datos Insights’ recent report, Emerging Technology for Life/Annuity/Benefits Insurers 2024, provides valuable insights into which emerging technologies life/annuity/benefits (L/A/B) insurers are adopting and piloting in 2024. The report is based on a survey of L/A/B insurer CIO members of the Datos Insights Insurance Technology Research Council conducted in Q2 2024. Here are some of the key takeaways:
The AI Revolution Continues
Artificial Intelligence (AI) remains at the forefront of innovation in the L/A/B insurance sector. Traditional AI applications like machine learning, image recognition, and unstructured text analysis continue to see strong adoption rates. These technologies are being deployed across various functions, from underwriting to customer service, helping insurers make more informed decisions and streamline operations.
However, the highest pilot rates in the AI space are in generative AI, particularly large language models (LLMs). L/A/B insurers are eager to engage with this new technology, with many already deploying or piloting both out-of-the-box and customized LLM solutions. This enthusiasm suggests that generative AI is quickly transitioning from an experimental technology to a practical business tool with wide-ranging applications in the insurance industry.
Cloud Technologies: The New Normal
The cloud continues to be a critical component of insurers’ technology strategies. Cloud-native computing and cloud data platforms are seeing increased adoption as L/A/B insurers progress in their cloud migration journeys. These technologies are enabling insurers to scale their operations more efficiently, manage vast amounts of data more effectively, and deploy new capabilities faster than ever before.
Interestingly, the report highlights a growing interest in cloud access security brokers (CASBs) and zero-trust network access (ZTNA) solutions. This trend underscores the industry’s recognition of the need for robust security measures as more operations move to the cloud.
A Balanced Approach to Innovation
While L/A/B insurers are showing increased enthusiasm for emerging technologies, their approach is marked by a blend of innovation and pragmatism. Pilot rates are up from 2023 levels, but the most popular technologies―with the exception of LLMs― are established technologies like zero-trust network access (ZTNA) and low-code/no-code platforms whose applications are clear and whose value is well established.
These technologies, while still considered emerging, have clearer applications and more established value propositions in the insurance context. This suggests that L/A/B insurers are strategically balancing their desire for innovation with a need for practical, proven solutions that can deliver tangible benefits in the near term. It’s a reminder that in the race to digitally transform, insurers are keeping one eye on the future and one on the present, ensuring that their technology investments align closely with their immediate business needs and goals.
The Future of Customer Engagement: Chatbots and Wearables
Chatbots continue to be an area of focus for many insurers, with adoption rates steadily increasing. The emergence of more advanced AI and LLM technologies is likely to further enhance the capabilities of these digital assistants, potentially revolutionizing customer service in the insurance industry.
Interestingly, while wearables once generated significant buzz in the life insurance space, interest has waned in recent years. Most insurers are now exploring alternative ways to engage with customers and promote wellness.
Conclusion
This report paints a picture of an industry actively embracing technological innovation while also being pragmatic about where to invest resources. L/A/B insurers are prioritizing technologies that offer clear business value and can be integrated into existing processes without causing significant disruption. Insurers that can effectively harness these emerging technologies while maintaining a focus on customer needs and operational efficiency will be well-positioned to thrive in an increasingly digital and data-driven industry.
The challenge for insurers lies not just in adopting new technologies, but in reimagining their business processes to fully leverage these innovations. This requires strong leadership, clear communication, and a willingness to embrace change. As the insurance landscape continues to evolve, staying informed about emerging technologies and their potential applications will be crucial for insurers looking to maintain a competitive edge.
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 property and casualty space, see the Datos Insights report Emerging Technology for Property/Casualty Insurers 2024.
