ITC Vegas Recap: Exploring the Future of Insurtech
With 9,000 attendees from insurance companies, vendors, system integrators, consultancies, and investors from all over the world, it’s clear that ITC Vegas remains a go-to-insurance innovation event. Today, most senior executives in the insurance industry recognize the critical need to establish a robust digital foundation and acknowledge its pivotal role in ensuring long-term competitiveness. Many of these executives now see ITC Vegas as a three-day way to gain a solid, industry-level view of the evolving digital foundation across the many insurance segments and the most promising new technologies. For core systems, specifically in group insurance, insurance executives use ITC as an opportunity to meet with, ask specific questions of, and compare vendors that are on their shortlists. For emerging technologies, it’s often less about evaluating vendors and more about understanding the potential opportunities, risks, timeframes for receiving real business value, and potential use cases.
Artificial intelligence, a combination of emerging and maturing technologies that should work together, remains a big focus for insurance executives and for ITC Vegas. Robotic process automation, predictive models mostly using insurers’ own data, natural language processing, and optical character recognition have significantly matured over the past ten years and now add significant business value throughout the insurance industry. Conference speakers said that over the past year, Generative AI has helped insurance companies understand the value of third-party datasets. There’s now an increasing recognition of the need to combine insurers’ own datasets with third party datasets and raw computing power to find non-obvious patterns that can reduce risks and significantly increase business value.
With Generative AI, we heard that many insurance companies are experimenting with proof-of- concept pilots and finding that large language models can help immediately in low-risk areas like developer productivity and content-intensive, back-office workflows. Investor speakers at the conference said that over the next 3-5 years, customer and distributor servicing should become positively impacted by Generative AI. TIAA, for example, already uses Generative AI to reply to customer questions on their website without using confusing financial jargon.
A few session speakers said that they expect core functions like underwriting and claims to be fundamentally transformed by Generative AI over the next ten years. With the rapid advancements in Generative AI, and artificial intelligence in general, insurers will need to partner with state regulators. Speakers also emphasized that regulatory education and safeguards will be needed to protect consumers’ privacy and avoid discrimination in how insurance companies underwrite risks and process claims.
We were very impressed by the progress being made on converting the insurance industry’s ubiquitous, unstructured data, (such as handwritten documents) into structured, digitized data. Impressively, one solution vendor said that its disability insurance clients can now use AI to understand much more medical, legal, biopsychosocial, financial, vocational, and historical claim information to more accurately predict the duration, effort, and outcomes for disability insurance claims. For increasing participation rates during the enrollment process for voluntary benefits and supplemental health insurance products, one start-up vendor is working with a large employee benefits broker to build a voice bot that will understand an employees’ basic data (age, income, number of children, coverages already owned) and then interactively provide advice on supplement health and voluntary benefits as they complete the enrollment process. There were also a few vendors that can use natural language processing to detect fraud during disability and phone discussions. For helping employees with physical and mental health challenges, many start-ups continue to emerge that combine third party data sets, their own algorithms, and smartphones for wellness-related monitoring and communications.
The Vitech team (Steve Brandt, Jacob Edds, and I) thoroughly enjoyed our week in Las Vegas for the conference. It was a great combination of seeing old friends, meeting new people, and participating in exciting discussions about the future of group insurance and the insurance industry. See you next year, ITC!