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INNOVATION | 03.07.2024

Innovation Trends in the Insurance Sector for 2024

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2024 will be a year in which Artificial Intelligence is set to be the main attraction for the insurance industry. But it will not be the only technology or the only strategy focus for the sector. MAPFRE Open Innovation experts analyze what trends we should expect in the coming months.

Gartner has identified sustainable technology, democratized generative artificial intelligence, and AI trust, risk and security management as three technological trends for 2024. These trends share common characteristics, according to the consulting firm: “protecting and preserving past and future investments, building the right solutions for the right stakeholders at the right time, and delivering value to both internal and external customers.”

For the insurance industry, Capgemini has published its report “Top Trends in Life and Non-Life Insurance for 2024”, exploring the industry’s anticipated developments for the year ahead. Key areas of focus for the coming months include improving policy profitability, sustainability, and the use of generative AI.

“Consulting firms, analysts, and independent experts agree on a fundamental point: the development and application of generative AI will define the socio-economic context, bearing significant implications for individuals,” remarks Miguel Ángel Rodríguez Cobos, Global Director of Innovation at MAPFRE. “Our sector will not be unaffected by this trend. Insurers will leverage these advancements to drive projects aimed at boosting operational efficiency, reinforcing customer relationships, and enhancing their experience. At MAPFRE, we are already pursuing this path, consistently monitoring potential associated risks to respond accordingly,” he adds.

However, generative artificial intelligence won’t be the only highlight in the industry this year. “While it will undoubtedly influence many decisions and remain central to technological and operational advancements, insurers will stay committed to our established strategic roadmap,” remarks Joan Cuscó, Global Director of Transformation at MAPFRE. “At MAPFRE Open Innovation, we’re constantly exploring new approaches to address people’s needs and concerns, and 2024 will be no exception. Cybersecurity, climate change, and emerging insurance modalities (such as embedded and parametric) will continue to be key areas of focus,” he concludes.

In this vein, the innovation experts at MAPFRE Open Innovation have conducted an in-depth examination of the trends for 2024, focusing on topics that the company deems as priorities and with a high impact on people.

Emerging risks

The global landscape demands that the insurance industry responds and adjusts to emerging risks. The latest Kennedys forecast identifies various types depending on the market, with some common ones including cyberattacks, climate change, regulatory changes, and the use of technology, particularly emphasizing artificial intelligence and automation.

MAPFRE innovation expert Ángel Martínez Trigo specifically highlights the rise in cyberattacks targeting businesses and the growing impact on small and medium-sized enterprises (SMEs), which can be catastrophic for them. Insurers will focus on assisting these companies in their cybersecurity strategies with new products and services throughout 2024.

 

The trend indicates that hurricanes, droughts, or wildfires caused by climate change are becoming increasingly frequent and will continue to be so. According to Daniel Almodóvar, MAPFRE’s Innovation Delivery Manager (Strategic Innovation), “One of the major public-private challenges is to adapt to this new climatic scenario. Estimating and quantifying associated risks is critical.”

Artificial Intelligence

AI is no longer just a trend; it’s a reality. What is trending, however, is Responsible AI, a concept that will gain more traction in 2024. “To fully harness the potential of this technology, it's crucial to use it safely, reliably, and sustainably. […] The insurance industry has a significant role to play in this regard. That’s why at MAPFRE, we’re actively learning about the risks, to measure and mitigate them,” explains Bárbara Fernández, Deputy Director (Disruptive Innovation) and Insur_Space Lead at MAPFRE.

 

When it comes to generative AI, one aspect must be made very clear: for it to succeed, it must be used with purpose. Using it indiscriminately serves no purpose; projects must address specific objectives and have a sustainable impact on people.

“In the past year, AI has captured the world’s imagination, raising significant expectations about its potential impact on society across all dimensions. This will remain a highly relevant topic in the months to come,” says César Ortega, expert data scientist at MAPFRE.

 

Claims processing will also continue to be impacted by AI. In this area, “agility is key to preventing procedures from becoming burdensome, so the industry is leveraging this technology to find solutions that offer simplicity and speed, improving the customer experience,” reflects Esther González, expert in innovation (Strategic Innovation).

Mobility

Mobility will be CASE: connected, autonomous, sustainable, and electric. In 2024, the use of technology and environmental considerations will drive advancements in new mobility.

“Consumers want to move through life at their own pace, paying only for what they use and being environmentally conscious throughout the process,” emphasizes CESVIMAP General Manager José María Cancer.

 

Cybersecurity also poses a significant risk factor in this field. The use of connected vehicles is increasing, connecting not only with each other but also with surrounding infrastructures and networks, making them attractive targets for cybercriminals. “Connected cars equipped with electric steering, braking, and engine control, along with electric chargers, can be hacked relatively easily. The automotive industry is making efforts to minimize and control these vulnerabilities,” notes Enrique Zapico Alonso, Director of the Mobility Lab at MAPFRE in CESVIMAP.

New insurance

On/off insurance, embedded insurance, personal mobility insurance… The emergence of new insurance modalities, serving as complements to traditional policies in many regions and markets, is gaining momentum. This isn’t surprising, as customers increasingly seek personalized and adaptable services that align with their needs, schedules, and budgets.

Parametric insurance is projected to continue its growth in 2024, given its significant value for both the industry and users. “Technologies such as AI or the potential of new databases have significantly influenced the expansion and advancement of parametric insurance. These solutions are highly beneficial in supplementing traditional insurance in a wide variety of cases, such as agricultural disasters or business interruptions in SMEs,” highlights Alessio Beninati, Innovation Manager (Strategic Innovation) at MAPFRE.

Insurtech ecosystem

The insurtech ecosystem plays a significant role in the insurance industry. These agents enable the industry to progress and adapt more quickly, while also staying abreast of technological advancements that would otherwise take much longer to implement.

Overall, 2024 is shaping up to be a time of investment contraction or rationalization worldwide: between 2022 and 2023, there was a decrease in investment ranging from 40% to 50%, depending on the market.

Regarding the Latin American ecosystem, “2024 appears to be a pivotal year. We’ll see whether the downward trend continues, if there’s a plateau, or if we return to growth phases. At MAPFRE, we remain optimistic,” analyzes Carlos Cendra, Scouting & Investment Lead at MAPFRE Open Innovation.

 

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