As we look ahead to 2024, the insurance industry faces many challenges and opportunities related to technology, climate, workforce trends, and fraud. Experts at Crawford & Company weighed in on these topics and provided insights for risk and claims professionals looking to get ahead of the new year’s hottest topics.
There will be a greater need for in-person interaction in 2024, as the workforce once again begins to prioritize relationships in a post-COVID environment.
Rohit Verma, CEO, Crawford & Company: “[The year] 2024 will present a tipping point as we find ourselves increasingly working with people that we’ve never met in-person before, and subsequently recognize that our working relationships are no longer the same. We'll reach the point when virtual connection is not enough, and it will become vitally important to actually meet people and form relationships face-to-face. At this point, business relationships that have been purely virtual are going to evolve to be much more in-person, simply because the desire to have that connection is going to increase.
“We may not be back in offices full time, but the need and desire for a stronger in-person connection will be high. Fortunately, a hybrid work arrangement and personal connection are not mutually exclusive: People can meet for lunch or dinner even when working from home. Organizations can support this evolution by reiterating the need for relationships and encouraging the pursuit of connection beyond the screen. It's just a matter of helping people see the need; that alone may be the single biggest catalyst people need from their employers.
The appetite for tech acceleration in insurance will continue in 2024.
Kenneth Tolson, global president, Network Solutions, Crawford & Company: “With Insurtech now touching practically every part of the insurance ecosystem, the industry’s appetite for disruptive technology is expected to continue to accelerate in 2024. Twenty years ago, nothing happened this fast in insurance, but in today’s quickly moving market, the
industry has come to realize that it can adapt, change, and innovate at a much faster pace in order to integrate technology into what has historically been a traditional and conservative business model. To see the current high level of appetite for acceleration in the traditionally risk-adverse insurance industry is really encouraging for the future of the industry. In the end, what lies at the center of it all is really a move toward innovating to drive better experiences for the customer—and that’s ultimately good for all of us.”
Technology will be utilized to address and mitigate climate-driven cat risks.
Meredith Brogan, president, Crawford Network Solutions: “As global warming, deforestation, and other kinds of human activities continue to impact the climate and present a multi-faceted threat to our ecosystem, AI can help mitigate some of these risks. Key areas where AI is poised to be a transformer include: 1) Prediction and analytics - AI models can predict climate patterns or extreme events, providing better opportunities for preparation and response. 2) Resource optimization - AI can help with optimizing the use of resources like water, energy, waste reduction and emissions to mitigate risks. 3) Monitoring and detection - Near to real-time monitoring of environmental conditions and detection of these changes can be achieved much earlier. 4) Policy enforcement - AI can also be used to support the enforcement of environmental policies, including monitoring compliance and reporting any kind of violations.”
AI will drive the automation of claims processes, but not at the expense of the “human in the loop” approach.
Sam Krishnamurthy, vice president of Corporate Systems, Crawford & Company: “In 2024, AI's role in automating claims processes will expand significantly, revolutionizing claims management and aiding in climate risk mitigation. Technologies such as IoT sensors in homes—part of insurtech solutions—will play a key role in predicting and preventing losses, though adoption may present challenges.
"A subset of AI—Generative AI—will be crucial in processing large volumes of claims efficiently, accurately evaluating coverage against documentation and policy terms, and enhancing the effectiveness of desk adjusters in managing inspections, thereby accelerating claim resolutions and bringing better outcomes for policyholders and clients. Despite AI's advancements, the 'human in the loop' approach remains essential, providing the empathy, ethics, and context that AI cannot offer. This collaboration underscores the critical need for an ethical AI framework, highlighting the significance of a balanced and empathetic approach in the insurance industry for responsible AI utilization.”
Fraud may add more weight to the industry’s shoulders in 2024.
Greg Smith, president of Canadian operations, Crawford & Company: “Economic downturns historically bring spikes in claims frequency, and the looming recession leads us to anticipate increased incidences of fraud in the claims space in 2024. This will require a strong collective effort from the industry to help detect fraud while still balancing the need for excellent customer service and adhering to principles of good faith. Opportunities exist to leverage technology to address this challenge. At an industry-wide level, we are getting better at collecting and mining data to identify systemic fraud. On an individual claim level, to help minimize fraud, AI tools can help adjusters thoroughly investigate losses, making sure all policy conditions have been met and all facts are known before making a coverage decision. Successfully combatting fraud in 2024 means paying attention to the details. We must invest the time to investigate claims promptly and thoroughly, and provide excellent service to the policyholders presenting legitimate claims; at the same time, we must find ways to resist illegitimate claims.”
Automation of triage will save valuable time during CAT events.
Cortney Young, senior vice president, Platforms Solutions & Contractor Connection Canada: “With current weather patterns and increased CAT activity showing no signs of abating, one critical success factor for claims automation in 2024 will be technology’s role in the triage process. From the initial point of engagement with a claim, the ability to triage according to the type of loss is of critical importance. Allowing the capture of real-time data from the policyholder to ensure the right resource—field adjuster, contractor, appraiser, or inspector—is sent out to the loss will help to move claims forward as quickly as possible during a CAT scenario.
"Geo-assigning tools will allow for physical resources to mobilize in designated areas, ensuring ease of travel and streamlined service. Additionally, the use of mobile tools will enable adjusters to process all first site visit reports on the scene, ensuring they are fully equipped to service clients and complete reports on the same day.”
Organizations that put in the work to develop their own product-oriented software will emerge as digitization success stories.
Joel Raedeke, chief technology and data science officer, Broadspire: “Companies in the insurance sector will continue to experience pressure due to gains in consistency, efficiency, quality, and scalability to codify their core business model in software. Companies will respond to this pressure in a few ways:
- "Project-oriented under-investment. Organizations that codify their business model with poor design and execution will find software investment to be expensive and an evolution inhibitor.
- "Integration investment. Companies that integrate other companies’ solutions for core business will see leakage of core business expertise and stifled evolution of core business differentiation.
- "Product-oriented business re-invention. Smart organizations will embrace the cost and disruption of top-to-bottom reinvention to become a product-oriented software company and compete as SaaS in their given core domain. While often slower than the integration path, companies that successfully achieve this kind of transformation will ultimately overcome competitors that either underinvest or solely invest in integration.”