research on insurance industry

Insurance industry outlook

Gain insights about the latest insurance industry trends, the sector’s digital reinvention, innovation and growth opportunities.

• What is the Insurance Industry?
• Insurance Industry Outlook 2023
• Top Insurance Industry Trends
• Transformation in the Insurance Industry
• Related Capabilities

What is the insurance industry?

The insurance sector can be defined as complex and dynamic, providing financial protection against risk to individuals and businesses, offering a wide range of products, including life insurance, health insurance, property and casualty insurance, and other specialized forms of coverage. At a time of accelerating disruption, insurance is poised for reinvention even as it remains resilient.

Market forces like inflation and varied forms of disruption—from geopolitical to technological—are buffeting the industry. In addition, customer expectations are growing. While these create challenges, there is also a big opportunity to pivot towards the future, from insurance trends like the growth of new digital channels to the potential for new business models and partnerships. To excel in this environment, organizations must embrace innovation and reinvention, including leveraging technology to boost operations, enhance customer experiences and launch new products and services.

Insurance industry outlook 2023

The near-term performance of the global insurance industry is expected to remain strong. This is despite the fact that global GDP forecasts and life- and non-life insurance projections have been revised downward.

Market Dynamics

Inflation is expected to impact the entire insurance value chain—from customer acquisition costs to claims expense and indemnity. The pressures from wages, healthcare, energy and social inflation are also likely to persist.

Insurers will also need to plan for continued disruption. Accenture’s Global Disruption Index—a composite measure that covers economic, social, geopolitical, climate, consumer and technology disruption—shows that levels of disruption have increased by 200% from 2017 to 2022. Previously, the Index rose by a mere 4% from 2011 to 2016.

Insurance will reinvent and expand in new directions

Reinvention will be a central strategic driver for insurers. In our recent Total Enterprise Reinvention report , 61% of insurance executives say shifting consumer preferences have accelerated their reinvention strategy. In 2023, there will be growing opportunities for insurers to expand their portfolio across health and wealth protection products, leading to further industry convergence. Prevention-oriented products and services will become increasingly popular for insurers. For example, by promoting sustainable driving habits, an insurer supports safer roads and helps reduce carbon emissions.

To achieve a competitive advantage, insurers need to innovate in new products, such as:

Reinventing their core business is a key strategic focus for insurers, with 61% of insurance executives saying that shifting consumer preferences have accelerated this process.

Technology-enabled products

Transforming health and wellness, auto and home insurance through technology.

Aligned, integrated advisory services

Services such as financial advice aligned to life and health.

New revenue streams

Collaborating with relevant partners to open new revenue paths.

Top insurance industry trends

The following trends continue to shape the insurance industry:

Insurance Trend 1: Growth and innovation

To propel growth, insurers understand that they need to innovate beyond their existing business models. As a result, insurers are seeking to differentiate themselves through reimagined, enhanced products and smart partnerships with industry peers, aligned industries and new market entrants. Consider the case of Mobilize Financial Services. The subsidiary of the Renault Group recently announced the launch of Mobilize Insurance, a car insurance specialist for the European market that will offer integrated usage-based car insurance for Renault, Dacia and Alpine customers. As part of the group’s ambition to create sustainable mobility for all, Mobilize Insurance will offer a ‘pay as you drive’ insurance model, with personalized pricing and offers.

Insurance Trend 2: Technology revolution

As a data-dense industry, the insurance industry is ripe for digital transformation— from operations to products and services. In Accenture’s recent ‘ Total Enterprise Reinvention ’ report, 56 percent of insurance executives report their organization having fundamentally reinvented processes by applying new technologies and new ways of working in sales.

For example, in the insurance industry digital technologies can streamline manual services. Cloud-based solutions can integrate insurance functions and solutions across the business, and intelligent analytics can deepen data analysis and risk. The key focus for insurers is not just on the individual technologies themselves, but how these technologies work together to affect transformation.

Insurance Trend 3: Artificial Intelligence (AI)

AI refers to the theory and development of computer systems that perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making and language translation. As a transformative technology, AI is the critical differentiator in the insurance industry—when applied in tandem with humans. AI's ability to analyze data quickly and accurately has rich potential for the insurance sector, as it enables the vast amounts of data to be leveraged in efficient and innovative ways. Half (52 percent) of insurance industry respondents in Accenture’s Total Enterprise Reinvention CxO Survey say that unlocking new growth opportunities is the most important benefit executives expect from investing in data and AI. Despite the economic downturn, 87 percent of insurance industry respondents also say that they plan to implement new and innovative cloud, data, AI or tech initiatives, including hiring, acquiring or training talent.

Insurance Trend 4: Workforce transformation

The workforce is at the center of the reinvention of the insurance industry, with the Chief Human Resource Officer (CHRO) being seen as an important agent of growth and change. In Accenture’s recent The CHRO as Growth Executive report, 89% Of CEOs say their CHRO should have a central role in ensuring long-term profitable growth. This translates to a strategic focus on developing and optimizing the insurance workforce.

There are two key trends in the insurance workforce – the rise of AI and a growing talent shortage. Insurance is historically data-intensive. The introduction of AI has enabled mundane administrative tasks to be automated, freeing up employees to do more challenging, rewarding work.

The growing talent shortage trend in insurance is becoming a pressing challenge for the insurance industry. While some functions will be replaced or enhanced by intelligent technologies, there is still going to be an anticipated gap in human skills, with thousands of positions expected to be left unfilled. This is largely owing to a great amount of insurance and underwriting skill sets being held by middle and retirement-aged people, with less than 25% of the insurance industry being under 35 years of age. For innovative, analytical thinkers who are wanting to make an impact in financial services, this means that insurance could be a viable future career path.

Insurance Trend 5: Metaverse Continuum

Accenture defines the Metaverse Continuum as a spectrum of digitally enhanced worlds, realities and business models that are redefining how people work, operate and interact. While still in its early stages of adoption, the metaverse holds the potential to help insurers build new models custom-fit for the digital age. The metaverse will elevate expectations for how customers interact with insurance products and experiences, and bring advances in employee training, shifts in revenue pools, and new distribution models in the next five years.

Insurance Trend 6: Sustainability

The integration of sustainability is a fundamental part of the insurance business model. It is not only ethically important, but it is also a way for insurers to proactively mitigate risk by improving community and environmental conditions. The latest United Nations Global Compact-Accenture CEO Study on Sustainability , recently shared at Davos, presented an urgent call for businesses and governments to take action on Sustainable Development Goals (SDGs). To remove barriers on taking action, CEOs are calling for a new roadmap to achieve the SDGs and asking government to accelerate the green transition. Within insurance, a key indicator of success will be financed emissions. This refers to emissions linked to the investment and underwriting activities of financial institutions such as insurers.

Transformation in the insurance industry

• NEW MARKET ENTRANTS
• INDUSTRY TRANSFORMATION

As a data-rich industry, insurance leverages a customer’s personal data to help them make the best purchasing decisions and create products and services tailored to their needs. For example, by tracking the data on customers’ wearable fitness devices (such as a Fitbit), an insurer can understand important information about their health and fitness, which influences the pricing of their plan. Although customers are happy to share data for better deals and pricing, there is still a relatively low level of trust regarding this scenario. Leading insurers illustrate to their customers how sharing their personal data results in integrated, intuitive products and services they can trust.

From bancassurance to insurtech companies, new businesses vie for the attention of insurance customers through tech-savvy, integrated business models. Insurers can retain market share by working in partnership with these industry disruptors, resulting in insurance solutions that blend the traditional and the new in innovative, exciting ways.

The insurance industry is historically characterized by legacy, manual processes. To remain relevant in the future, insurers break down silos within their businesses and embrace digital transformation. These new technologies offer incredible opportunities for insurers to become integrated with parallel industries and be more relevant to customers.

How to reimagine insurance for the digital age

At Accenture, we work closely with insurance businesses to proactively address changing customer needs. These are the key areas on which insurers will focus as they prepare for the future:

• Grow and innovate by reimagining the role of insurance in customers’ lives, as well as the technology needed to serve them wherever they are.
• Modernize technology to streamline legacy systems and transform claims and underwriting.
• Invest in the future workforce by optimizing talent, planning for new ways of working and using human and machine capabilities for the best result.
• Imagine the metaverse and how that can transform the way insurance companies run their internal processes and engage with their clients.
• Promote sustainability across every aspect of the business.

Learn about the latest insurance trends and the sector’s global transformation.

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Related capabilities

Life & annuity.

Manage costs. Limit risk. Drive growth. Here's how we help insurers aim for growth and operational excellence.

Property & casualty

We help P&C insurers to improve their policy, distribution and claims functions and to benefit from digital technology and transformation.

Frequently asked questions

What industry is insurance in.

Insurance resides within the financial services industry.

What is the general role of the insurance industry?

The role of the insurance industry is to safeguard businesses, individuals and other entities against major financial loss. The industry functions by having companies that diversify risk across a pool of organizations or customers.

How do insurance companies work?

Insurance companies typically generate revenue by putting a price on different types of risk and then charging customers a premium in exchange for assuming that risk. Insurance companies can reinvest those premiums into interest-generating assets. When a customer files an insurance claim, the insurer processes and decides whether to approve the claim before it provides an insurance payout to the customer. By pricing and diversifying risk effectively across customers, insurers aim to bring in a greater amount in revenue than they spend on insurance payouts to customers.

Innovate to win: Why market research is key to insurance industry success

A changing world demands insurance innovation

Underlying drivers of change are fundamentally transforming the foundations of the insurance industry. New ways to expand insurability and to measure, control, and price risk enable the creation of innovative insurance products and services. Digital platforms disrupt how insurers reach policyholders and potential customers, especially millennials who expect on-demand, high-touch services with delightful user experiences. Technology advances including artificial intelligence and cloud computing improve efficiencies, and with automation, insurers can reduce the cost of a claims journey by as much as 30%. 1 How can insurers leverage these breakthroughs to address unmet consumer demand, successfully launch new insurance products, and drive down costs?

Milliman addresses this question in the “Innovate to win” series. Our first article presented a roadmap to guide you through the entire innovation process. 2 Here, we focus on how you can identify and meet the needs of your customers through market research.

Why do insurers need to conduct market research?

Research into the behavioral economics, marketing, and psychology of insurance products is business-critical for insurers. To sustain profitable growth, insurers must create innovative products and services while improving customer connectivity. The typical insurance company loses 10% to 15% of its customer base every year and the cost of acquiring new customers makes this churn extremely expensive. 3 However, innovation is also expensive and inherently risky. According to Harvard Business School, 95% of the 30,000 new products introduced into the general marketplace each year are failures. 4 With deep risk management expertise and large customer bases, insurers are better positioned to succeed at innovation when compared to other industries.

Successful innovations solve fundamental customer problems in new, better, or more cost-effective ways. Researching customer needs and expectations in the context of your competitive landscape is an integral part of the process. To mitigate risk, all these questions should be researched and answered before launching any innovation into the market:

• What products, services, processes, and ideas are already available in the marketplace?
• What are consumers looking for in this offering and how does it meet their needs?
• What similar products/services do my competitors offer and what are they doing to stay competitive in this market?
• Is this a new offering or different approach to an existing offering?
• What is the potential market size in terms of revenue and profits for this product/service?
• How will we market this offering to consumers?
• Will this offering work as we have designed it?
• Will this product, service, or process disrupt the market, and if so, what impact and value would it have on consumers and the industry?

Market research provides valuable insight into consumer needs and can eliminate misperceptions regarding what potential customers will think about your new product, service, or process. Research can help you clearly define your target market, avoid costly mistakes, and speed product development time. Although market research helps mitigate risk, it does not eliminate it entirely and can be costly. You will need to determine how much time and money you are willing to spend researching the market and if your potential innovation is worth the investment.

What types of market research work best for insurers?

Primary and secondary research are the two most effective ways for insurers to gather information about markets, products, and consumers. Contrary to its name, secondary research is usually conducted first and analyzes existing data. By combining multiple sources of secondary data, you can identify trends and gather useful information at a low cost. You can then use this information to better understand the actions you and/or others have already taken and learn from any mistakes or successes. Secondary research helps maximize future primary research, which is the collection of new data about a specific topic. Certainly, secondary research has value, but it lacks the customization and specificity needed to evaluate larger insurance innovation projects.

When do insurers need to invest in primary research?

A business decision of major consequence requires primary research. Primary research begins with a review of secondary research to efficiently gain direction and insight into the intended study topic. After that, quantitative and/or qualitative methodologies are used to gain further insight into consumer needs, preferences, and behavior. Additional benefits of engaging clients in a research project include strengthening relationships, winning loyalty, and creating new business opportunities.

Quantitative data, typically gathered using surveys, can be represented by usable statistics. Surveys gather a significant amount of data in a relatively short timeframe from a wide range of people, giving you the confidence that the data accurately represents your customer base. This data can provide valuable insight into consumer preferences such as likes and dislikes, satisfaction ratings, and opinions. You can run statistical significance tests to apply results to the population of interest and present the results graphically. Data-driven charts and graphs are an effective way to help stakeholders understand research and convince them to act on the results.

When you need more context regarding your data-- for example, why people feel a certain way about a response-- then qualitative research is the best approach. Sometimes the “why” is critical to exploring a study topic and qualitative research addresses this requirement through focus groups and interviews. These methods enable more in-depth understanding through direct quotes from respondents, the use of themes to bucket responses, and the ability to contextualize answers to understand the “why.” Although qualitative research is valuable, it can be time-consuming and costly when compared to quantitative research. Data is collected from a much smaller sample, so it is difficult to present in an aggregate summary and not statistically significant as being representative of the entire population.

How does primary research advance insurance innovation?

Both types of primary research methods are valuable and can provide insight into the market with different applications and emphasis:

• Quantitative surveys are questionnaires developed specifically for the topic being studied and distributed to a large sample of potential respondents based on specific criteria. Surveys provide a comprehensive view of the market due to a large sample size but are limited in the ability to understand the “why.”
• Qualitative interviews and focus groups provide context by giving participants the opportunity to expand on why they have certain beliefs and opinions and how they feel about the topic of study. In-depth interviews are one-on-one sessions with participants who are selected for their expertise and knowledge in a specified area. Focus groups are moderated discussions of opinions about a specific topic or product. Seven to 10 participants are selected using a screener questionnaire based on specific criteria. The moderator provides the structure, asks the questions, and gives overall direction to guide the discussion.

The most effective product development processes combine quantitative and qualitative research methodologies to refine and validate innovative ideas and prototypes. When you get the results of your research, it is important to have the infrastructure and resources in place to act on those insights. It is also important to note that the results of your research may require you to change your plans because what you previously thought were great ideas were not validated by the market research.

Still, it might be difficult to for your company to adopt new ideas and move forward with your innovation. Administrative systems can slow your company’s product development process and potentially hinder your initiative. Distribution issues can also make or break new product or service delivery. Bottom-line concerns such as low interest rates and the cost of meeting regulatory requirements are key considerations. As a result, many insurers de-emphasize innovative product development initiatives because of resource constraints and development and approval costs. 5

If you are making a big decision regarding an innovation, it is important to dedicate resources to perform in-depth market research. Discovering what your target customers think about your innovation enables you to tailor and refine it before you officially launch it. It is best practice to test multiple variations of your solution with your target market to determine which version resonates most with customers. Research is an opportunity for you to test both the innovation and the messaging you will use when going to market.

If you would like to discuss how customized market research can strengthen the development of your innovative offerings, please contact David Bahlinger or one of the other outstanding professionals at Milliman.

1 McKinsey. (March 2017). Digital disruption in Insurance: Cutting through the noise. Retrieved on May 26, 2020, from https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/Time%20for%20insurance%20companies%20to%20face%20digital%20reality/Digital-disruption-in-Insurance.ashx .

2 Borcan, Ashlee Mouton. Milliman.com. Innovate to win: Insurance industry roadmap to success. March 5, 2020. Retrieved on May 26, 2020, from https://us.milliman.com/en/insight/innovate-to-win-insurance-industry-roadmap-to-success

3 Simpson, Pamela. The Lowdown: Reimagining Research to Recognize Emerging Insurance Industry Trends. (September 19, 2019). Insurance Journal. Retrieved on May 26, 2020, from https://www.insurancejournal.com/blogs/research-trends/2019/09/19/540368.htm .

4 Emmer, Marc. 95 Percent of New Products Fail. Here are six steps to make sure yours don’t. (July 6, 2018). Inc. Retrieved on May 26, 2020, from https://www.inc.com/marc-emmer/95-percent-of-new-products-fail-here-are-6-steps-to-make-sure-yours-dont.html .

5 Society of Actuaries. Understanding the Product Development Process of Life and Annuity Companies. (December 2017). Retrieved on May 26, 2020, from https://www.soa.org/globalassets/assets/files/research/understanding-product-development-report.pdf .

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Research into the behavioral economics, marketing, and psychology of insurance products is business-critical for insurers.

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The NAIC Financial Regulatory Services Department prepares “Insurance Industry Snapshots” and “Insurance Industry Analysis Reports” to assist consumers in better understanding developing trends in the insurance industry. The reports cover the P&C, Title, Life, Fraternal and Health Insurance Industry. They are produced from insurer statutory filings and represent approximately 99% of all insurers expected to file the NAIC Financial Data Repository.

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Global insurance industry - statistics & facts

Which markets are the largest, who are the world’s leading insurers, key insights.

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Life and non-life insurance penetration in selected regions globally 2020-2022

Biggest 50 insurance companies worldwide May 2023, by market cap

Value of global reinsurance premiums 2013-2022

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Current statistics on this topic.

Gross premiums of the insurance industry worldwide 2000-2020

Life and nonlife direct premium writing countries globally 2022, by value of premiums

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Key drivers

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Market overview.

• Premium Statistic Market share of the total insurance market worldwide 2000-2021, by country
• Premium Statistic Gross premiums of the insurance industry worldwide 2000-2020
• Premium Statistic Value of global reinsurance capital 2013-2022
• Premium Statistic Insurance search ad spend worldwide 2020-2021
• Premium Statistic ESG scores of the worlds' largest insurance companies 2023, by provider

Market share of the total insurance market worldwide 2000-2021, by country

Market share of the total insurance market worldwide from 2000 to 2021, by country

Gross premiums written by the insurance industry worldwide 2000 to 2020 (in trillion U.S. dollars)

Value of global reinsurance capital 2013-2022

Value of global reinsurance capital from 2013 to 2022 (in billion U.S. dollars)

Insurance search ad spend worldwide 2020-2021

Paid search advertising spending of the insurance industry worldwide in 2020 and 2021 (in million U.S. dollars)

ESG scores of the worlds' largest insurance companies 2023, by provider

Comparison of the environmental, social and governance (ESG) scores of the 26 largest insurance companies by market capitalization worldwide in 2023, by ESG score provider

• Premium Statistic Leading premium writing countries globally 2022, by premiums
• Premium Statistic Share of insurance direct premiums written globally 2008-2022, by segment
• Premium Statistic Share of insurance premiums globally 2021, by region
• Premium Statistic Life and nonlife direct premium writing countries globally 2022, by value of premiums
• Premium Statistic COVID-19 insurance claims made globally until June 2021, by segment
• Premium Statistic Share of global population ready for open insurance 2022, by country

Leading premium writing countries globally 2022, by premiums

Leading life and non-life direct premium writing countries globally in 2022, by premiums (in billion U.S. dollars)

Share of insurance direct premiums written globally 2008-2022, by segment

Distribution of life and health, and property and casualty insurance direct premiums written globally from 2008 to 2022

Share of insurance premiums globally 2021, by region

Distribution of insurance premiums worldwide in 2021, by region

Leading life and nonlife direct premium writing countries globally in 2022, by value of premiums (in billion U.S. dollars)

COVID-19 insurance claims made globally until June 2021, by segment

Breakdown of COVID-19 insurance claims worldwide from 2020 to June 2021, by business segment

Share of global population ready for open insurance 2022, by country

Distribution of open insurance-ready users worldwide in 2022, by country

Leading companies

• Premium Statistic Biggest 50 insurance companies worldwide May 2023, by market cap
• Premium Statistic Largest life insurance companies globally December 2023, by market capitalization
• Premium Statistic Leading insurance companies worldwide 2023, by total assets
• Premium Statistic Leading insurance companies globally 2022, by revenue
• Premium Statistic Leading global P/C reinsurers 2019-2021, by gross reinsurance premiums written

Largest insurance companies worldwide as of May 2023, by market capitalization (in billion U.S. dollars)

Largest life insurance companies globally December 2023, by market capitalization

Largest life insurance companies worldwide as of December 2023, by market capitalization (in billion U.S. dollars)

Leading insurance companies worldwide 2023, by total assets

Largest insurance companies worldwide as of May 2023, by total assets (in billion U.S. dollars)

Leading insurance companies globally 2022, by revenue

Leading global insurance companies worldwide in 2022, by revenue (in billion U.S. dollars)

Leading global P/C reinsurers 2019-2021, by gross reinsurance premiums written

Leading property/casualty reinsurers globally, by gross reinsurance premiums written from 2019 to 2021 (in billion U.S. dollars)

Sales metrics/consumption

• Premium Statistic Share of consumers who sought and purchased insurance worldwide 2022
• Premium Statistic Life and non-life insurance penetration in selected regions globally 2020-2022
• Premium Statistic Price change in commercial insurance worldwide 2015-2023
• Premium Statistic Price change in commercial property insurance worldwide 2018-2023
• Premium Statistic Price change in commercial casualty insurance worldwide 2018-2023
• Premium Statistic Price change in finpro liability insurance worldwide 2018-2022

Share of consumers who sought and purchased insurance worldwide 2022

Share of consumers who searched for and bought insurance in selected countries in 2022

Life and non-life insurance penetration in selected countries and territories worldwide from 2020 to 2022

Price change in commercial insurance worldwide 2015-2023

Percentage change in commercial insurance pricing worldwide from Q1 2015 to Q4 2023

Price change in commercial property insurance worldwide 2018-2023

Percentage change in commercial property insurance pricing worldwide from Q2 2018 to Q4 2023

Price change in commercial casualty insurance worldwide 2018-2023

Percentage change in commercial casualty insurance pricing worldwide from Q2 2018 to Q4 2023

Price change in finpro liability insurance worldwide 2018-2022

Percentage change in financial and professional liability insurance pricing worldwide from Q2 2018 to Q4 2022

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• Premium Statistic Hiring freezes, downsizing and outsourcing plans in the global insurance sector 2022
• Premium Statistic Cyber insurance market size worldwide 2018-2020, with forecast for 2025
• Basic Statistic Travel insurance market size worldwide in 2021, with forecasts up until 2030
• Premium Statistic Number of open insurance users globally 2021, with forecasts for 2024 and 2032

Estimated size of the global insurance market 2021-2022, with forecasts up until 2026

Forecast of the global insurance market in 2021 and 2022, with forecasts from 2023 to 2026 (in billion U.S. dollars)

Hiring freezes, downsizing and outsourcing plans in the global insurance sector 2022

Share of insurance CEOs planning selected actions to prepare for an anticipated recession in the next six months worldwide in 2022

Cyber insurance market size worldwide 2018-2020, with forecast for 2025

Global cyber insurance market size in 2018 and 2020, with forecast for 2025 (in billion U.S. dollars)

Travel insurance market size worldwide in 2021, with forecasts up until 2030

Size of the global travel insurance market in 2021, with forecasts from 2022 to 2030 (in billion U.S. dollars)

Number of open insurance users globally 2021, with forecasts for 2024 and 2032

Number of open insurance users worldwide in 2021, with forecasts for 2024 and 2032 (in millions)

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Next in insurance: Top insurance industry issues in 2022

The insurance industry is no longer predictable.

The business of insurance, which once was stable and predictable, isn’t that way anymore. Growth without sacrificing profitability is challenging, climate change is irrevocably impacting certain risk profiles, distribution needs have become truly omnichannel and customers expect products tailored just for them. All the while, technology has continued its relentless advance and an emerging player ecosystem is threatening to shake up customer acquisition. As a result, industry executives now have to make an array of deliberate and aggressive strategic choices to succeed. Incremental change or hoping to avoid change altogether are no longer viable options.

Compounding the difficulty of addressing these challenges is how the COVID-19 pandemic accelerated them. Customer and employee expectations changed more in 18 months than they did in the previous two decades. This has put immense pressure on the industry and carriers have had to adjust practically—in some cases, literally—overnight. Even though the pandemic has ebbed and flowed, the pace of change has remained relentless.

Commitment is an act, not just a word

Despite disruption and the new entrants trying to take advantage of it, the good news for many carriers is that they still have a competitive advantage that others can’t easily replicate. There’s room in most market segments for multiple players, but because not all competitive levers are fully or equally available to everyone, insurers typically focus on one of the following five areas: 1 - digitization, data and integration; 2 - brand and distribution; 3 - superior, innovative products; 4- strategic partnerships; 5 - effective structuring.

Unfortunately, while most insurers do try to focus on their strengths, they also typically underinvest in these areas and fail to act with urgency, resulting in a race to the middle. We tell clients that they need to fully fund and support their way to play and hold themselves accountable for the results. In other words, commitment without action won’t get you very far. 

While carriers may have been able to get away with a fuzzier approach in the past, that is not the case today. Private equity, asset managers and other new entrants are moving quickly, with great focus and discipline, to capitalize on industry disruption. Companies that continue to work from three- to five-year timelines that are vague and lack strategic focus are likely to lose market share and perhaps even wind up as someone else’s acquisition.

Companies that continue to work from three- to five-year timelines that are vague and lack strategic focus are likely to lose market share and perhaps even wind up as someone else’s acquisition.

Real-life examples: Ways to play

Leading carriers aren’t relying on past success. They’re defining new ways to remain relevant and grow.

Data & Integration: Digital Simplification Operator

Leverages advanced tech and data capabilities to create a seamless, digital-first experience from quote and sale all the way to claims. Features simplicity and competitive prices.

Distribution: Ecosystem Orchestrator

Creates an integrated ecosystem (typically via partnerships) that offers customers “more than just insurance,” focusing on distribution and product offerings to win at the point of sale.

Products: Unmet Needs Customizer

Develops innovative differentiated, and customized products to address unserved / underserved segments or new, emerging risks via advanced analytics and pay-as-you go pricing.

Partnerships: Platform Services Innovator

Extends core capabilities by offering products and services to other carriers, distributors or other adjacent businesses. Creates scale by funding differentiating competencies and experiences.

Structuring: Economic Value Creator

Employs a lean operations focus to compete competitively on price and enable investments in key strategic areas.

What makes a winner?

Based on our experience working with all segments of the industry, we’ve observed that most successful insurers in today’s environment have a few key traits. In particular, they:

Say “no” to what doesn’t fit

Define a strategic direction and say “no” to what doesn’t fit. Simply setting financial goals isn’t enough. Committing to a way to play, then continuing to do everything you did before while funding whatever else comes along, is  not  a strategic direction. Leaders know how to prioritize.

Fully fund their strategy

They don’t shortchange big bets or dilute key investments with allocations to less vital areas. Of note, they’re typically able to make these investments because they’ve implemented structural, financial and tax approaches that minimize their cost ratios.

Get creative with products

They’re able to identify new product categories (as opposed to just adding new features) and have the brand strength to deliver them. For example, early movers are designing products that take into account two increasingly important issues: Stakeholders’ environmental, social and governance (ESG) concerns and the still overlooked employer as distributor market for a wide variety of financial and service needs, particularly retirement and college savings and paying for childcare or elder care.

Get involved in partnerships and make deals

Get involved in partnerships and make deals to meet strategic goals. Inorganic strategies have a long history in the industry but have picked up steam recently as carriers focus on core competencies and enhancing technology. In fact, partnerships and deals have become a necessity for most carriers to enable their chosen ways to play. They take part in ecosystems and invest in InsurTech. Although most of these kinds of investments aren’t game-changers on their own, when they get the acquiring company closer to a strategic goal, they’re worth it.

That said, the best ecosystems and InsurTech innovations in the world aren’t going to help you if they don’t align with your strategy or if you’re not executing your strategy properly. As carriers find new partners, technologies and business models that align to their core principles or strategic growth plan, they can test their value and determine whether or not to adopt the innovation or maintain the partnership.

60% of consumers don’t feel they’re financially confident or covered across their long-term security and emergency needs. Source: PwC/LIMRA 2020 research

Technology platforms that drive strategy

Even a clear and consistent strategy is going to founder if your technology can’t enable it. We haven’t spoken with a single business leader who doesn’t recognize that investments in new technologies are the best way to facilitate market access, risk selection and management, quality financial information and customer service capabilities. However, we’ve seen many carriers fail to stick to a coherent strategy beyond “digitization.” There’s often a lack of clarity and correspondingly nebulous goals about how these substantial investments relate to the business. The above discussion of funding a competitive advantage also applies here. Carriers should fully invest in ways that build on their strengths and hold the organization accountable for the results. At the risk of repeating ourselves, we’ve seen time and again that many carriers simply don’t do this. Customers (and employees) increasingly expect insurers to be as easy to work with as an online retailer—and new entrants are giving them exactly what they want. If you can’t, you’re going to lose business and employees.

A truly strategic technology platform features:

A core processing system

A core processing system that efficiently issues policies and contracts, enables payments and keeps track of finances. You don’t need bells and whistles for their own sake, but you do need something that does the essential job of helping you achieve scale faster.

Digital data and integration capabilities

Digital data and integration capabilities that enable access to and understanding of your own data and from third parties to inform management decisions and enable new capabilities.

Customer/user-facing systems

The absolutely vital customer and user-facing systems that support your call centers, customer chat and walk-in locations. They enable carrier representatives to immediately determine client identities and service histories to quickly solve customers’ problems. Moreover, an effective integration layer facilitates quick incorporation of new partners and solutions into your digital capabilities.

Reporting and compliance platforms

Reporting and compliance platforms that provide high-quality data, facilitate accurate financial reporting and accounting and enable effective compliance.

Cloud, because no insurer needs to—and, more importantly, probably shouldn’t—support its own infrastructure anymore. Those that do risk it being an impediment to operational flexibility. Practically everything in insurance eventually becomes a margin game, with the advantage going to the carriers that can scale effectively, drive out cost and achieve broad price competitiveness. Carriers with adaptable cores that can be quickly configured for new innovations—a key advantage of cloud technology—can achieve this scale faster.

Changing customer expectations 2018 to 2021

Source: PwC 2018 and 2021 surveys of 6,000 insurance customers.

The path forward

None of this is easy, and no single company has mastered all of these ways to win. But, we’ve never seen a truly competitive insurer that didn’t at least: 

Set and stick to clear goals. 

Support business goals with a technology strategy that’s built on and integrates proprietary and third-party data. 

Fully invest in and hold itself accountable for achieving 1 and 2. 

Whatever your business focus—data and integration, brand and distribution, products, strategic partnerships or structuring—these three are absolutely essential.

The ‘Next in insurance’ series

The war for talent, esg considerations, the workforce, which brings your strategy to life and holds the key to the future of the business.

Insurers feel insecure in the war for talent. They think — often rightly so  — that they lag behind other “sexier” industries in attracting and retaining the best people. However, recent changes in what employees expect of their employers and the nature of work itself offer insurers a great opportunity to level the playing field. Companies that proactively and convincingly demonstrate flexibility and offer meaningful career paths with ample room for development are showing that insurance can be as professionally and personally rewarding an industry as any. In other words, it’s time for insurers to play offense instead of defense.

The increasing breadth and importance of ESG considerations, from investment strategy and underwriting to public perception

The insurance industry has long paid close attention to environmental issues because they directly affect how carriers evaluate and price risk and pay out claims. But sustainability and governance are becoming equally important. For the former, insurers are experiencing increased scrutiny of their business models. For example, what’s the right balance between covering climate-related risks and underwriting initiatives that could increase those very same risks? Such sustainability concerns relate directly to governance issues. Insurance leaders now have to meet formal, increasingly detailed ESG reporting requirements covering everything from their investments to how they underwrite business. And investors, customers and the workforce are paying close attention.

Download Next in insurance report

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Insurance: US Deals 2024 outlook

We expect insurance companies to continue to focus on simplifying their portfolios by divesting assets that are deemed non-core to their strategy. 

Insurance Leader, Consulting Solutions, PwC US

Consulting Principal, PwC US

Francois Ramette

Principal, Insurance Consulting, Strategy&, PwC US

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Featured Stories

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Viewpoint: The 10 Major Risks Shaping Insurance Today

I readily admit that lists of top risks, top threats, and opportunities for insurance are well-trodden ground, and ranking risks in order of importance inevitably triggers debate about which risk should be near the top or bottom, rather than the actual risks on the list.

And from an insurer’s perspective looking down a typical list of risks, some will be dismissed as too far in the future that they can be ignored, or too obvious that they have already been considered and evaluated.

At this year’s Exceedance conference, our theme is to help attendees to ‘See Risk Differently.’ We know the current risk landscape and the state of the insurance industry do not represent business as usual.

This content was originally published as a Moody’s blog . It is republished here with permission. Moody’s prepared a data visual that illustrates each risk with charts, data and information. But what risks are driving these changes in the landscape, are insurers looking at the right factors, what factors are closer to reality, and what looks more like a hallucination?

Insurers have to consider so many questions. Here’s just one – how will infrastructure that was designed before we knew our climate would change, cope under new extreme pressures, such as the dam failures in Libya and India?

Another question, what’s next for life insurers after the major global catastrophe of a global pandemic not seen since 1918?

Risk is changing, and the business environment is changing. Supply chain shocks, the overhang of the pandemic, and geopolitical risk have escalated economic issues that have been fairly benign in many countries, driving inflation, wages, and raw material price rises, with insurers reaching for an inflationary business playbook that they haven’t used for 20-30 years.

Insurance is a business, and relies on its customers – be they homeowners, life policyholders, or businesses.

Customers face the same risk and economic pressures, but for some, as climate peril risk rises along with losses, insurers have looked to pass premium increases or tighten coverage – with customer satisfaction falling and six million uninsured homes in the U.S.

More customers want cyber insurance, but insurers looking to capitalize on growth have to navigate a volatile risk landscape.

Having a conference theme ‘See Risk Differently’ means we need to show customers how, through better data and better models we can identify new business opportunities.

As part of our preparation for Exceedance 2024, we set ourselves this challenge – 10 risks (in no particular order) that represent some of the major risks shaping insurance today.

These risks are affecting all businesses, the business of risk itself, and the state of the risk landscape. Where to start?

Anytime. Anywhere. The Rapid Proliferation of Cyberattacks

Across all business sectors and all regions, as the world’s reliance on the internet reaches new heights, cyber has become one of the most ubiquitous and prevalent of all the perils that organizations must face, with the potential to stop operations at any time.

With an ever-changing risk landscape, and ever-changing threats, organizations see their cyber defenses tried 24/7, in a battle to close down vulnerabilities looking to be exploited by a wide range of threat actors, from lone hackers, and organized crime operations, to state-backed attackers.

Cyberattacks are now just ubiquitous – an everyday occurrence.

The challenge for insurers is to use frameworks that best capture this peril, as understandably, organizations are looking to their insurers for protection against the worst excesses and losses from cyber risk, and to better manage the risk overall, to make it hard for the criminals perpetrating these attacks.

The Many, Many Tipping Points of Climate Change

Every day seems to deliver a new potential threat or a ‘what if?’ question concerning climate change, a new ‘tipping point’ that will then accelerate the globe over the 1.5 degree Celsius bound and beyond.

But as with all things, it is much more complex than that, individual factors are signs, such as melting sea ice, but it is climate change feedback loops, as one factor accelerates another, where the risk of reaching a definitive tipping point can arise.

Examining the complex network of feedback loops that can accelerate global warming will prove vital to establish whether we are moving fast toward true tipping points. Any accelerations mean less time to mitigate risk, resulting in increased transition risk due to the urgency to respond – potentially impacting insurers and stakeholders including governments.

The Not So Straight Path to Net Zero

Net zero has emerged as the central goal in tackling climate change, but as a measure, it is intrinsically a scientific concept. To keep the rise in global average temperatures within certain limits, physics implies that there is a finite budget of carbon dioxide that is allowed into the atmosphere, alongside other greenhouse gases.

However, net zero is much more than a scientific concept or a technically determined target. It is also a frame of reference through which global action against climate change can be (and is increasingly) structured and understood.

Achieving net zero requires operationalization in varied social, political, and economic spheres.

With such an intricate path to tread to reach net zero, there are risks along the path itself. For instance, carbon capture and storage is widely touted as a route to sequestrate vast quantities of carbon dioxide, but would a sudden release from a ruptured storage facility cause new issues?

New green technology presents many opportunities for insurers to open up new lines of business and look to reduce their exposure to carbon-intensive sectors, but it also presents new risks for the insurance industry.

Getting Reacquainted With Unprecedented Economic Shocks

From the mid-1980s to the 2007 crash, the ‘Great Moderation’ provided a period of stability across a range of economic factors; for many developed and emerging economies, growth, inflation, and interest rates stayed at relatively stable levels.

Post-2007 then saw intervention to maintain stability, and low interest rates to stimulate a return to growth. Central banks supported many nations, including unprecedented levels of support to keep economies functioning during the COVID-19 pandemic.

Whereas the economy was fairly benign in terms of concern, such as low and stable interest rates and inflation for developed economies for most of the 2010s, insurers, similar to most businesses, are now coming to terms with an economic environment where shocks are frequent and unpredictable, and these shocks then ripple through in the form of inflation, higher costs, and higher interest rates.

For example, insurers alongside contending with increasing risks from climate-related events, are also having to contend with significant inflationary pressures, rising labor and materials costs for construction, and higher interest costs.

As consumers feel a cost of living squeeze, policies such as life insurance may not be renewed or canceled to save money, driving up lapse rates. Factoring in these issues is a central aspect of business planning, and the need to pivot in response to shocks is now the norm.

The Challenges of Insurability for Catastrophic Perils

In many U.S. states, and especially states that have suffered significant cat events such as California, Florida, or Louisiana, insurers are having to contend with higher frequency, higher severity cat events, impacting higher value exposure which is located in areas that are becoming higher risk.

In addition, rising business costs, inflation, aggressive litigation, and regulatory pressures, are forcing insurers to reconsider offering coverage to the highest-risk properties.

On the other side, regulators are reacting to this volatile environment, looking to ensure affordable coverage is maintained for consumers. Consumer protection laws such as Prop. 103 in California strains under calls for reform from insurers, to introduce risk-based pricing for perils etc.

But for the consumer, in certain U.S. states, the risk of uninsured properties in towns and cities is growing.

Similar to any other product, insurance costs have to compete with other demands on a consumer’s income, in an economic environment where housing, food, and fuel costs are rising, insurers run the risk of being seen as expensive offering no immediate value for a risk they perceive won’t happen to them.

Insurers need to be viewed as partners in allowing for the economic viability of homeowners, businesses, and the community.

To achieve this, a better understanding of the risk in front of them and efforts needed to mitigate short and long-term risk, allow insurers to be seen as active risk mitigation partners helping consumers to become more resilient and economically stable in the future.

The global supply chain is an intricate interplay of many moving parts, but as seen with the COVID-19 pandemic or Russia’s invasion of Ukraine, the smooth functioning of the global supply chain that the world has enjoyed could be an exception, rather than the rule.

Production shortages during COVID saw whole industries such as car manufacturing, air travel, and tourism, grind to a halt, with a long, stumbling road back to recovery.

Then Russia’s invasion of Ukraine saw shocks to energy prices as Russia’s energy exports were turned away by Ukraine’s allies, and foreign businesses retreated from Russia.

Construction costs – materials and labor, can represent a sizeable slice of a property insurer’s costs, and double-digit cost increases have had to be passed through in response to supply shortages, price increases, and rising labor costs in a tight labor market.

Businesses are rapidly relearning how they approach global supply chains, assuming that nothing is certain, and building resilience and contingency into their systems. Identifying the new vulnerabilities in each supply chain, recognizing that the leanest approach may not be the best fit, and that supply continuity is now the best outcome, will help to minimize future supply shocks.

Perennial Wars Rise Back to the Surface

Concern around geopolitical issues, although ever present, had been muted, as globalization and world trade looked to create new partnerships and break down barriers for many businesses over the last 20-30 years.

But with many states now emboldened and looking to flex their new dominance, old ‘perennial’ wars, and new conflicts, have either been brought to the fore, making it more difficult to conduct world trade in a time where conflicts are reigniting with growing regularity.

Insurers have to understand the multitude of geopolitical conflicts, and how many of these are perennial conflicts, they do not go away or get resolved, but they bubble to the surface, and can quickly escalate.

Terrorist events can be a trigger, and ignite conflicts; these perennial disputes can place infrastructure, shipping routes, and resources at risk, potentially writing off business for years.

No Quick Fix for Crumbling Infrastructure

Nations have infrastructure booms, for the U.S., it was 1950-70, after which investment dropped off. As a result, vital infrastructure is predominantly 50-70 years old.

For developing nations, a different issue: by 2050, there will be 15 million miles of paved roads built around the world in total, enough to encircle the globe 600 times, and 90 percent of the road building will occur in developing nations. But is this new infrastructure going to be resilient in the future?

Although a direct issue for the insurer that insures an infrastructure asset, inadequate dams, flood defenses, drainage, power systems, and poor housing – all contribute to escalating risk for insurers who are increasingly paying out for the events exacerbated by poor infrastructure.

This is set to worsen as infrastructure struggles to cope with an environment facing extremes – be it heat, cold, rain, snow, or wind. Where infrastructure fails, businesses that rely on that infrastructure will also be hit, potentially driving up business interruption losses.

The Return of Long-Tail Liabilities

There is a growing need for (re)insurers to be prepared and even ensure reserves for the rise of ‘long-tail’ claims from many potential sources.

Social inflation factors, where awarded losses, higher litigation rates, or simply the backlog of court cases post-COVID seeing legislators extending claim deadlines or adjusting claim eligibility dates allowing more claimants to gain redress, bring uncertainty.

One source is simply where claims come in well after an insurance policy has expired. These have seen a resurgence recently; Munich Re reported a 33 percent year-on-year rise in ‘long-tail’ claims in 2023, with policies dating back as far as 2012.

Changes to the statute of limitations – the maximum time to make a claim can change, such as for molestation claims in the U.S., can reopen liabilities.

Insurance ‘archaeologists’ dig into past policies, such as potential claims navigating ‘Pollution Exclusions’ introduced in the mid-to-late eighties liability and/or property insurance policies. Claims from pollution or liability from per- and poly-fluoroalkyl substances (PFAS) keep the scrutiny on past policies.

Where policy wordings are ambiguous or have not kept up with the rising list of potential claims and attempts at litigation, such as cases ranging from COVID-19 business continuity claims in Europe, faulty products, to data breaches/data protection, long tail liabilities can arise.

Give and Take in Longevity and Mortality

From improvements in sanitation, housing, and education, the fight against infections with the development of vaccines and then antibiotics, new technology, pharmaceuticals, and screening, have seen life spans increase to 84-85 years old, on average, in eight countries.

Breakthroughs in transplants, gene therapy, blockbuster drugs that target cancers, and AI speeding up research, will all help to reduce the likelihood of premature death and extend lifespans further. The world already has nearly a million centenarians, around 1,000 at 110 years, and 68 at 115 years or greater.

With the COVID-19 pandemic, the issue of excess deaths came to the fore, with those over 65, and especially over 75 years old, being particularly hard hit, and reversing some of the top-line gains in longevity.

But the focus is now turning to ‘healthy life’ years, years without chronic illness or disability, and this, as an example, for the EU countries is at around 63-64 years. In developed and developing economies, issues around obesity, poor diet, alcohol, drugs, sedentary lifestyles, plus insufficient access to appropriate healthcare, are countering longevity gains, and making it hard to increase ‘healthy life’ years.

This then places pressure on health and social care systems as more people struggle with chronic illness and disability in their later years.

For those delivering life assurance or financial security products to aging populations, the marrying up of exceptional longevity progress, and extraordinary medical breakthroughs, together with the other side of the balance sheet, of emerging viruses and possible pandemics, Long COVID, and lifestyle and healthcare concerns, make it much more difficult to predict future trends without analyzing a wide range of factors.

For these ten risks, such as cyber illustrated above, we have also brought them to life in an interactive data visualization story, to access this, click here .

These ten risks are designed to challenge, raise debate, call for analysis, and help start conversations on embracing a risk landscape that seems more complex and opaque than in previous times.

We look forward to examining some of these risks at Exceedance, and to building a mindset that is primed and ready to see risk differently.

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Written By Robert Muir-Wood

Robert Muir-Wood, chief research officer, for Moody's RMS, works to enhance approaches to natural catastrophe modeling, identify models for new areas of risk, and explore expanded applications for catastrophe modeling. He has more than 25 years of experience developing probabilistic catastrophe models. He was lead author for the 2007 IPCC Fourth Assessment Report and 2011 IPCC Special Report on Extremes, and is chair of the OECD panel on the Financial Consequences of Large Scale Catastrophes. He is the author of seven books, most recently: "The Cure for Catastrophe: How We Can Stop Manufacturing Natural Disasters." He holds a degree in natural sciences and a doctorate both from Cambridge University and is a visiting professor at the Institute for Risk and Disaster Reduction at University College London.

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The impact of artificial intelligence on the insurance industry

Harnessing generative AI to transform insurance

Unlocking the potential of generative AI in the insurance industry

Generative artificial intelligence (GenAI) has gained significant attention and is transforming industries. It can ingest vast amounts of information and determine the contextual relationship between words and data points. Large cloud vendors such as Microsoft, Google, and AWS offer private, secure versions that can better cater to different uses.

The insurance industry is eagerly looking to adopt GenAI to improve business processes and gain valuable insights. However, successful adoption depends on change management practices and data readiness. Insurance companies should focus on building internal tools to foster a productive culture of AI adoption and enhance efficiencies. This includes implementing data governance frameworks, creating analytics-ready data sets, and organizing data effectively across departments.

Currently, many insurance organizations still maintain records on paper that has not been scanned and may not have established protocols in place for data use and compliance. Ensuring proper data management frameworks are in place can provide compliance, improved decision-making capabilities, and better insights.

The adoption of AI requires companies to evaluate the benefits and challenges continuously. As technology evolves, industries must stay current with changes and re-evaluate strategies to achieve the desired results. Adopting AI requires a fundamental shift in business operations and culture, but the potential benefits to the insurance industry are vast.

This notion of analytics-ready data sets the foundation for effective AI adoption and usage because it enables organizations to leverage data in a more strategic way.

Jeanne Johnson

Principal, Advisory, KPMG US

GenAI adoption

GenAI adoption in insurance can lead to valuable data insights for better decision-making in risk assessment and underwriting. Automation also frees up human resources for complex tasks. Uses include: 

GenAI in auditing

GenAI has a plethora of uses in audit, from knowledge management and productivity to process flows. It can parse vast amounts of information, create diagrams, and communicate with humans in many ways, making it a valuable tool for auditors.

However, as with any new technology, there are concerns and risks around GenAI. Trust in the technology and responsible practices should be taken into consideration, as GenAI is not a truth machine and requires proper training and usage.

It is crucial for audit firms to weigh the benefits and challenges of GenAI thoughtfully. Although it is free and accessible, innovative uses are emerging rapidly, meaning that constant evaluation is necessary to ensure efficient and effective use of the technology while avoiding any potential misuses.

I believe that those who do not adopt AI technology in the near future run the risk of becoming replaceable. On the other hand, organizations and individuals who embrace AI will not only maintain their competitiveness in the market but also have the chance to reap the benefits of this transformative technology.

Richard Entrup

Managing Director and Head of Emerging Solutions, Enterprise Innovation, KPMG US

Ethical concerns surrounding GenAI implementation

AI assistants have the potential to improve efficiency and productivity within daily tasks, streamlining processes across various systems such as Microsoft Office, ServiceNow, and Salesforce. However, ethical and responsible usage concerns persist around bias, accountability, and data integrity.

To alleviate these concerns, tools and proposed regulations are emerging, including trusted AI umbrellas. Recent developments, such as the use of deep fakes, are fueling legislative and regulatory debates focused on accountability around AI usage and providing consumer protection.

The future of AI in the insurance industry is a promising one, but there are crucial steps that businesses need to take before realizing the benefits. Establishing proper frameworks, planning for data usage, and internal adoption will be crucial to take full advantage of the technology's potential.

This information was originally presented at the KPMG 35th Annual Insurance Industry Conference.

Dive into our thinking:, leading through uncertainty: shaping the future of insurance.

Dive in to the insights shared at our 35th Annual Insurance Industry Conference. 

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Industry Profile and Operating Environment: Italian Insurance

Fri 10 May, 2024 - 6:19 AM ET

Regulatory Oversight Fitch Ratings considers regulatory oversight in Italy to be very strong. The Italian insurance market is highly regulated, with well-developed regulatory practices and supervision processes. As a member of the EU, Italy adopted the risk-adjusted framework Solvency II (S2). The Italian insurance regulator focuses on ensuring that insurance organisations are viable and that their conduct of business is appropriate. It is actively involved in enabling fraud-preventing procedures to protect both customers and companies from fraudulent behaviours. Fitch considers the regulator’s enforcement as effective. Technical Sophistication of the Insurance Market; Diversity and Breadth Fitch believes the Italian insurance market is highly technically sophisticated. This is underpinned by the use of strong and generally accepted actuarial practices for underwriting analysis, calculating claims reserves and products pricing. In addition, the adoption of S2 improved the level of sophistication of enterprise risk-management in the market. The Italian insurance market is reasonably diversified between the life and non-life lines. However, the non-life market is mainly focused on motor insurance and the penetration of non-motor business is low compared with European peers.

UW-Madison Projects Awarded Funding Through Research Partnership with American Family Insurance

Nine UW–Madison data science research projects with applications to both the insurance industry and society have been selected for funding through the American Family Funding Initiative .

The UW–Madison Data Science Institute (DSI), powered by American Family Insurance, announced these awards for research topics ranging from assessing wildfire risk to reducing the computational costs of extreme weather prediction and auditing large language models for bias and fairness.

Through a unique sponsored research partnership, American Family Insurance has committed $10 million over 10 years for UW–Madison research with potential to fuel discovery in data science. Since its launch in spring 2020, 40 teams of UW–Madison faculty and collaborators have been awarded nearly six million dollars through this initiative.

“We’re thrilled to announce that, in our latest round of collaboration, we’ve really brought together some amazing minds from UW-Madison and our own teams at American Family Insurance,” said Zak Rottier, Enterprise Director of Data Science at American Family Insurance. “It’s all about connecting the dots between the brilliant researchers and our strategic insurance goals. Year after year, this partnership continues opening up new avenues for innovation that benefit those directly involved, as well as our American Family Insurance customers and the broader data science community.”

Funds are awarded through a competitive application process administered by DSI, and American Family Insurance provides selected projects with both funding and collaboration with their data scientists. Both organizations evaluate applications on their novelty, potential impact to data science and alignment with topics of interest to American Family.

“The projects awarded in round 6 highlight the diversity of challenges that industries face and the multitude of ways that data science techniques can address those challenges. The creative solutions that are proposed run the gamut from generative AI to more traditional approaches from statistics,” said Kyle Cranmer, David R. Anderson Director of the Data Science Institute.

A seventh round of funding will be announced in January 2025. Project summaries and PI bios are available at the data science @ uw website .

American Family Funding Initiative Round 6 Awards:

Multimodal Method Approach for Risk Assessment and Reasoning PI: Kaiping Chen, Assistant Professor, Department of Life Sciences Communication Co-PI: Junjie Hu, Assistant Professor, Departments of Computer Sciences and Biostatistics and Medical Informatics

Data-Driven Wildfire Ignition Prediction from an Insurance Perspective PI: Min Chen, Assistant Professor, Department of Forest and Wildlife Ecology

Multimodal Foundation Model for Driver Behavior Profiling and Risk Analysis PI: Song Gao, Associate Professor, Department of Geography

Sensitivity Analysis and Counterfactual Analysis of Insurance Data PI: Hyunseung Kang, Associate Professor, Department of Statistics

A Framework for Valid and Reliable Audits of Biases in Large Language Models PI: Shamya Karumbaiah, Assistant Professor, Department of Educational Psychology Co-PI: Daniel Bolt, Professor, Department of Educational Psychology

Interpretable Causal Inference for Multimodal and Relational Data PI: Keith Levin, Assistant Professor, Department of Statistics

Safer Driving Through Optimized Telematics-Based Feedback PI: Tony McDonald, Assistant Professor, Department of Industrial and Systems Engineering Co-PI: Yonatan Mintz, Assistant Professor, Department of Industrial and Systems Engineering

Novel Methods for Hail Detection PI: Kevin Ponto, Associate Professor, Wisconsin Institute for Discovery and School of Human Ecology Co-PI: Ross Tredinnick, Systems Programmer, Wisconsin Institute for Discovery

Developing a Prototype Data-Driven Stochastic Convective Hazards Emulator PI: Daniel Wright, Professor, Department of Civil and Environmental Engineering Co-PI: Yagmur Derin, Research Scientist, Department of Civil and Environmental Engineering

Insurance 2030—The impact of AI on the future of insurance

Welcome to the future of insurance, as seen through the eyes of Scott, a customer in the year 2030. His digital personal assistant orders him a a vehicle with self-driving capabilities for a meeting across town. Upon hopping into the arriving car, Scott decides he wants to drive today and moves the car into “active” mode. Scott’s personal assistant maps out a potential route and shares it with his mobility insurer, which immediately responds with an alternate route that has a much lower likelihood of accidents and auto damage as well as the calculated adjustment to his monthly premium. Scott’s assistant notifies him that his mobility insurance premium will increase by 4 to 8 percent based on the route he selects and the volume and distribution of other cars on the road. It also alerts him that his life insurance policy, which is now priced on a “pay-as-you-live” basis, will increase by 2 percent for this quarter. The additional amounts are automatically debited from his bank account.

When Scott pulls into his destination’s parking lot, his car bumps into one of several parking signs. As soon as the car stops moving, its internal diagnostics determine the extent of the damage. His personal assistant instructs him to take three pictures of the front right bumper area and two of the surroundings. By the time Scott gets back to the driver’s seat, the screen on the dash informs him of the damage, confirms the claim has been approved, and reports that a mobile response drone has been dispatched to the lot for inspection. If the vehicle is drivable, it may be directed to the nearest in-network garage for repair after a replacement vehicle arrives.

While this scenario may seem beyond the horizon, such integrated user stories will emerge across all lines of insurance with increasing frequency over the next decade. In fact, all the technologies required above already exist, and many are available to consumers. With the new wave of deep learning techniques, such as convolutional neural networks, 1 Convolutional neural networks contain millions of simulated “neurons” structured in layers. artificial intelligence (AI) has the potential to live up to its promise of mimicking the perception, reasoning, learning, and problem solving of the human mind (Exhibit 1). In this evolution, insurance will shift from its current state of “detect and repair” to “predict and prevent,” transforming every aspect of the industry in the process. The pace of change will also accelerate as brokers, consumers, financial intermediaries, insurers, and suppliers become more adept at using advanced technologies to enhance decision making and productivity, lower costs, and optimize the customer experience.

As AI becomes more deeply integrated in the industry, carriers must position themselves to respond to the changing business landscape. Insurance executives must understand the factors that will contribute to this change and how AI will reshape claims, distribution, and underwriting and pricing. With this understanding, they can start to build the skills and talent, embrace the emerging technologies, and create the culture and perspective needed to be successful players in the insurance industry of the future.

Four AI-related trends shaping insurance

AI’s underlying technologies are already being deployed in our businesses, homes, and vehicles, as well as on our person. The disruption from COVID-19 changed the timelines for the adoption of AI by significantly accelerating digitization for insurers. Virtually overnight, organizations had to adjust to accommodate remote workforces, expand their digital capabilities to support distribution, and upgrade their online channels. While most organizations likely didn't invest heavily in AI during the pandemic, the increased emphasis on digital technologies and a greater willingness to embrace change will put them in a better position to incorporate AI into their operations.

Four core technology trends, tightly coupled with (and sometimes enabled by) AI, will reshape the insurance industry over the next decade.

Explosion of data from connected devices

In industrial settings, equipment with sensors have been omnipresent for some time, but the coming years will see a huge increase in the number of connected consumer devices. The penetration of existing devices (such as cars, fitness trackers, home assistants, smartphones, and smart watches) will continue to increase rapidly, joined by new, growing categories such as clothing, eyewear, home appliances, medical devices, and shoes. Experts estimate there will be up to one trillion connected devices by 2025. 2 World Economic Forum, 2015. The resulting avalanche of new data created by these devices will allow carriers to understand their clients more deeply, resulting in new product categories, more personalized pricing, and increasingly real-time service delivery.

Experts estimate there will be up to one trillion connected devices by 2025.

Increased prevalence of physical robotics

The field of robotics has seen many exciting achievements recently, and this innovation will continue to change how humans interact with the world around them. Additive manufacturing, also known as 3-D printing, will radically reshape manufacturing and the commercial insurance products of the future. By 2025, 3-D-printed buildings will be common, and carriers will need to assess how this development changes risk assessments. In addition, programmable, autonomous drones; autonomous farming equipment; and enhanced surgical robots will all be commercially viable in the next decade. By 2030, a much larger proportion of standard vehicles will have autonomous features, such as self-driving capabilities. Carriers will need to understand how the increasing presence of robotics in everyday life and across industries will shift risk pools, change customer expectations, and enable new products and channels.

Open-source and data ecosystems

As data becomes ubiquitous, open-source protocols will emerge to ensure data can be shared and used across industries. Various public and private entities will come together to create ecosystems in order to share data for multiple use cases under a common regulatory and cybersecurity framework. For example, wearable data could be ported directly to insurance carriers, and connected-home and auto data could be made available through Amazon, Apple, Google, and a variety of consumer device manufacturers.

Advances in cognitive technologies

Convolutional neural networks and other deep learning technologies currently used primarily for image, voice, and unstructured text processing will evolve to be applied in a wide variety of applications. These cognitive technologies, which are loosely based on the human brain’s ability to learn through decomposition and inference, will become the standard approach for processing the incredibly large and complex data streams that will be generated by “active” insurance products tied to an individual’s behavior and activities. With the increased commercialization of these types of technologies, carriers will have access to models that are constantly learning and adapting to the world around them—enabling new product categories and engagement techniques while responding to shifts in underlying risks or behaviors in real time.

The state of insurance in 2030

AI and its related technologies will have a seismic impact on all aspects of the insurance industry, from distribution to underwriting and pricing to claims. Advanced technologies and data are already affecting distribution and underwriting, with policies being priced, purchased, and bound in near real time. An in-depth examination at what insurance may look like in 2030 highlights dramatic changes across the insurance value chain.

Distribution

The experience of purchasing insurance is faster , with less active involvement on the part of the insurer and the customer. Enough information is known about individual behavior, with AI algorithms creating risk profiles, so that cycle times for completing the purchase of an auto, commercial, or life policy will be reduced to minutes or even seconds. Auto and home carriers have enabled instant quotes for some time but will continue to refine their ability to issue policies immediately to a wider range of customers as telematics and in-home Internet of Things (IoT) devices proliferate and pricing algorithms mature. Many life carriers are experimenting with simplified issue products, but most are restricted to only the healthiest applicants and are priced higher than a comparable fully underwritten product. As AI permeates life underwriting and carriers are able to identify risk in a much more granular and sophisticated way, we will see a new wave of mass-market instant issue products.

Smart contracts enabled by blockchain instantaneously authorize payments from a customer’s financial account. Meanwhile, contract processing and payment verification are eliminated or streamlined, reducing customer acquisition costs for insurers. The purchase of commercial insurance is similarly expedited as the combination of drones, IoT, and other available data provides sufficient information for AI-based cognitive models to proactively generate a bindable quote.

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Highly dynamic, usage-based insurance (UBI) products proliferate and are tailored to the behavior of individual consumers. Insurance transitions from a “purchase and annual renewal” model to a continuous cycle, as product offerings constantly adapt to an individual’s behavioral patterns. Furthermore, products are disaggregated substantially into microcoverage elements (for example, phone battery insurance, flight delay insurance, different coverage for a washer and dryer within the home) that consumers can customize to their particular needs, with the ability to instantaneously compare prices from various carriers for their individualized baskets of insurance products. New products emerge to cover the shifting nature of living arrangements and travel. UBI becomes the norm as physical assets are shared across multiple parties, with a pay-by-mile or pay-by-ride model for car sharing and pay-by-stay insurance for home-sharing services, such as Airbnb. 3 Some insurtech companies are already designing these types of products; Slice, for example, provides variable commercial insurance specifically tailored for home sharing.

The role of insurance agents has changed dramatically by 2030. The number of agents is reduced substantially as active agents retire and remaining agents rely heavily on technology to increase productivity. The role of agents transitions to process facilitators and product educators. The agent of the future can sell nearly all types of coverage and adds value by helping clients manage their portfolios of coverage across experiences, health, life, mobility, personal property, and residential. Agents use smart personal assistants to optimize their tasks as well as AI-enabled bots to find potential deals for clients. These tools help agents to support a substantially larger client base while making customer interactions (a mix of in-person, virtual, and digital) shorter and more meaningful, given that each interaction will be tailored to the exact current and future needs of each individual client.

Underwriting and pricing

In 2030, underwriting as we know it today ceases to exist for most personal and small-business products across life and property and casualty insurance. The process of underwriting is reduced to a few seconds as the majority of underwriting is automated and supported by a combination of machine and deep learning models built within the technology stack. These models are powered by internal data as well as a broad set of external data accessed through application programming interfaces and outside data and analytics providers. Information collected from devices provided by mainline carriers, reinsurers, product manufacturers, and product distributors is aggregated in a variety of data repositories and data streams. These information sources enable insurers to make ex ante decisions regarding underwriting and pricing, enabling proactive outreach with a bindable quote for a product bundle tailored to the buyer’s risk profile and coverage needs.

Regulators review AI-enabled, machine learning–based models, a task that requires a transparent method for determining traceability of a score (similar to the rating factor derivations used today with regression-based coefficients). To verify that data usage is appropriate for marketing and underwriting, regulators assess a combination of model inputs. They also develop test policies for providers when determining rates in online plans to ensure the algorithm results are within approved bounds. Public policy considerations limit access to certain sensitive and predictive data (such as health and genetic information) that would decrease underwriting and pricing flexibility and increase antiselection risk in some segments.

Price remains central in consumer decision making, but carriers innovate to diminish competition purely on price. Sophisticated proprietary platforms connect customers and insurers and offer customers differentiated experiences, features, and value. In some segments, price competition intensifies, and razor-thin margins are the norm, while in other segments, unique insurance offerings enable margin expansion and differentiation. In jurisdictions where change is embraced, the pace of pricing innovation is rapid. Pricing is available in real time based on usage and a dynamic, data-rich assessment of risk, empowering consumers to make decisions about how their actions influence coverage, insurability, and pricing.

Claims processing in 2030 remains a primary function of carriers , but more than half of claims activities have been replaced by automation. Advanced algorithms handle initial claims routing, increasing efficiency and accuracy.

IoT sensors and an array of data-capture technologies, such as drones, largely replace traditional, manual methods of first notice of loss. Claims triage and repair services are often triggered automatically upon loss. In the case of an auto accident, for example, a policyholder takes streaming video of the damage, which is translated into loss descriptions and estimate amounts. Vehicles with autonomous features that sustain minor damage direct themselves to repair shops for service while another car with autonomous features is dispatched in the interim. In the home, IoT devices will be increasingly used to proactively monitor water levels, temperature, and other key risk factors and will proactively alert both tenants and insurers of issues before they arise.

Automated customer service apps handle most policyholder interactions through voice and text, directly following self-learning scripts that interface with the claims, fraud, medical service, policy, and repair systems. The turnaround time for resolution of many claims is measured in minutes rather than days or weeks. Human claims management focuses on a few areas: complex and unusual claims, contested claims where human interaction and negotiation are empowered by analytics and data-driven insights, claims linked to systemic issues and risks created by new technology (for example, hackers infiltrate critical IoT systems), and random manual reviews of claims to ensure sufficient oversight of algorithmic decision making.

Claims organizations increase their focus on risk monitoring, prevention, and mitigation. IoT and new data sources are used to monitor risk and trigger interventions when factors exceed AI-defined thresholds. Customer interaction with insurance claims organizations focuses on avoiding potential loss. Individuals receive real-time alerts that may be linked with automatic interventions for inspection, maintenance, and repair. For large-scale catastrophe claims, insurers monitor homes and vehicles in real time using integrated IoT, telematics, and mobile phone data, assuming mobile phone service and power haven’t been disrupted in the area. When power goes out, insurers can prefile claims by using data aggregators, which consolidate data from satellites, networked drones, weather services, and policyholder data in real time. This system is pretested by the largest carriers across multiple catastrophe types, so highly accurate loss estimations are reliably filed in a real emergency. Detailed reports are automatically provided to reinsurers for faster reinsurance capital flow.

How insurers can prepare for accelerating changes

The rapid evolution of the industry will be fueled by the extensive adoption and integration of automation, deep learning, and external data ecosystems. While no one can predict exactly what insurance might look like in 2030, carriers can take several steps now to prepare for change.

1. Get smart on AI-related technologies and trends

Although the tectonic shifts in the industry will be tech-focused, addressing them is not the domain of the IT team. Instead, board members and customer-experience teams should invest the time and resources to build a deep understanding of these AI-related technologies. Part of this effort will require exploring hypothesis-driven scenarios in order to understand and highlight where and when disruption might occur—and what it means for certain business lines. For example, insurers are unlikely to gain much insights from limited-scale IoT pilot projects in discrete parts of the business. Instead, they must proceed with purpose and an understanding of how their organization might participate in the IoT ecosystem at scale. Pilots and proof-of-concept (POC) projects should be designed to test not just how a technology works but also how successful the carrier might be operating in a particular role within a data- or IoT-based ecosystem.

Future of insurance: Unleashing growth through new business building

2. develop and begin implementation of a coherent strategic plan.

Building on the insights from AI explorations, carriers must decide how to use technology to support their business strategy. The senior leadership team’s long-term strategic plan will require a multiyear transformation that touches operations, talent, and technology. Some carriers are already beginning to take innovative approaches such as starting their own venture-capital arms, acquiring promising insurtech companies, and forging partnerships with leading academic institutions. Insurers should develop a perspective on areas they want to invest in to meet or beat the market and what strategic approach—for example, forming a new entity or building in-house strategic capabilities—is best suited for their organization.

This plan should address all four dimensions involved in any large-scale, analytics-based initiative—everything from data to people to culture (Exhibit 2). The plan should outline a road map of AI-based pilots and POCs and detail which parts of the organization will require investments in skill building or focused change management. Most important, a detailed schedule of milestones and checkpoints is essential to allow the organization to determine, on a regular basis, how the plan should be modified to address any shifts in the evolution of AI technologies and significant changes or disruptions within the industry.

In addition to being able to understand and implement AI technologies, carriers also need to develop strategic responses to coming macrolevel changes. As many lines shift toward a “predict and prevent” methodology, carriers will need to rethink their customer engagement and branding, product design, and core earnings. Auto accidents will be reduced through use of vehicles with self-driving capabilities, in-home flooding will be prevented by IoT devices, buildings will be reprinted after a natural disaster, and lives will be saved and extended by improved healthcare. Likewise, vehicles will still break down, natural disasters will continue to devastate coastal regions, and individuals will require effective medical care and support when a loved one passes. As these changes take root, profit pools will shift, new types and lines of products will emerge, and how consumers interact with their insurers will change substantially.

All of these efforts can produce a coherent analytics and technology strategy that addresses all aspects of the business, with a keen eye on both value creation and differentiation.

3. Create and execute a comprehensive data strategy

Data is fast becoming one of the most—if not the most—valuable asset for any organization. The insurance industry is no different: how carriers identify, quantify, place, and manage risk is all predicated on the volume and quality of data they acquire during a policy’s life cycle. Most AI technologies will perform best when they have a high volume of data from a variety of sources. As such, carriers must develop a well-structured and actionable strategy with regard to both internal and external data. Internal data will need to be organized in ways that enable and support the agile development of new analytics insights and capabilities. With external data, carriers must focus on securing access to data that enriches and complements their internal data sets. The real challenge will be gaining access in a cost-efficient way. As the external data ecosystem continues to expand, it will likely remain highly fragmented, making it quite difficult to identify high-quality data at a reasonable cost. Overall, data strategy will need to include a variety of ways to obtain and secure access to external data, as well as ways to combine this data with internal sources. Carriers should be prepared to have a multifaceted procurement strategy that could include the direct acquisition of data assets and providers, licensing of data sources, use of data APIs, and partnerships with data brokers.

4. Create the right talent and technology infrastructure

In augmented chess, average players enabled by AI tend to do better than expert chess players enabled by the same AI. The underlying reason for this counterintuitive outcome depends on whether the individual interacting with AI embraces, trusts, and understands the supporting technology. To ensure that every part of the organization views advanced analytics as a must-have capability, carriers must make measured but sustained investments in people. The insurance organization of the future will require talent with the right mindsets and skills . The next generation of successful frontline insurance workers will be in increasingly high demand and must possess a unique mix of being technologically adept, creative, and willing to work at something that will not be a static process but rather a mix of semiautomated and machine-supported tasks that continually evolve. Generating value from the AI use cases of the future will require carriers to integrate skills, technology, and insights from around the organization to deliver unique, holistic customer experiences. Doing so will require a conscious culture shift for most carriers that will rely on buy-in and leadership from the executive suite. Developing an aggressive strategy to attract, cultivate, and retain a variety of workers with critical skill sets will be essential to keep pace. These roles will include data engineers, data scientists, technologists, cloud computing specialists, and experience designers. To retain knowledge while also ensuring the business has the new skills and capabilities necessary to compete, many organizations will design and implement reskilling programs. As a last component of developing the new workforce, organizations will identify external resources and partners to augment in-house capabilities that will help carriers secure the needed support for business evolution and execution. The IT architecture of the future will also be radically different from today’s. Carriers should start making targeted investments to enable the migration to a more future-forward technology stack that can support a two-speed IT architecture .

Rapid advances in technologies in the next decade will lead to disruptive changes in the insurance industry. The winners in AI-based insurance will be carriers that use new technologies to create innovative products, harness cognitive learning insights from new data sources, streamline processes and lower costs, and exceed customer expectations for individualization and dynamic adaptation. Most important, carriers that adopt a mindset focused on creating opportunities from disruptive technologies—instead of viewing them as a threat to their current business—will thrive in the insurance industry in 2030.

Ramnath Balasubramanian and Ari Libarikian are senior partners in McKinsey’s New York office, and Doug McElhaney is a partner in the Washington, DC, office.

The authors would like to acknowledge the contributions of Gijs Biermans, Bayard Gennert, Nick Milinkovich, and Erik Summers.

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Industry News

Title professionals spend significant time, resources to protect property rights.

May 9, 2024

According to a   study  conducted by ndp | analytics, expert title professionals spend approximately 22 hours to close a standard transaction and 45 hours for more difficult transactions. While all standard transactions require important title clearance efforts prior to closing, difficult transactions require even more substantial work to correct more complex title issues prior to closing. In 2023, title insurance companies estimated 36% of transactions were in this more difficult category.

The study—which includes responses from a nationally representative group of 674 title insurance companies and was conducted in the first quarter of 2024—estimates the time needed to research title and close a transaction. It also estimates the extraordinary efforts title professionals take to fix title issues—typically called curative work—to protect what is often a homeowner’s largest lifetime purchase. While other lines of insurance are unable to predict or prevent events such as floods and fires that can impact a home, title professionals can identify and prevent many of the issues that might interfere with someone’s ownership rights or a lender’s mortgage priority. 

“The preventative work done by the title industry is why title insurance has a lower claims rate versus other lines of insurance,” said Diane Tomb, American Land Title Association’s (ALTA’s) chief executive officer. 

According to the National Association of Insurance Commissioners, the title insurance industry’s expense ratio averaged 95% over the past decade, highlighting the costs associated with upfront title searching and clearance. Industry data shows that approximately 70 cents of every dollar in revenue are spent on staff and acquiring and analyzing public real estate records data, with office expense, compliance and taxes comprising the bulk of the remainder.

“Importantly, while inflation has caused the price of most products and services to increase, the cost of title insurance coverage has decreased nearly 8% since 2004,” Tomb said. 

“Despite advancements in technology, only 70% of public records at the county level are digitized and often only the past 10 to 15 years of records are available online, deeming the sole reliance on these electronic records insufficient,” Tomb said. “And while the use of technology to research title issues has dramatically increased, it takes more than a click of a button to conduct a search. The amount of research and corrective action from expert title professionals needed to provide homeowners and lenders with assurance about their title remains significant.”

Here are some   key takeaways   from ndp’s research:

• 36% of all transactions require extensive, nonroutine title clearance efforts. Difficult files, which require substantial curative work, are very common. 
• Nearly all title insurance companies conducted curative actions often or very often; 62% of these companies typically performed at least four curative actions per transaction. 
• Curative work requires more resources than it did five years ago. The biggest changes were cost, transaction volume and compliance. In 2023, approximately 64% of title insurance companies expressed that expenses related to curative work have increased (24% reported costs are much higher than five years ago and 40% said somewhat higher). Over half of companies reported increases in the shares of transactions that require curative actions (55%), the compliance burden (54%) and the complexity of curative work (54%). 

Contact ALTA at 202-296-3671 or [email protected] .

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Fidelis Insurance Holdings (FIHL) Lags Q1 Earnings and Revenue Estimates

Fidelis Insurance Holdings ( FIHL Quick Quote FIHL - Free Report ) came out with quarterly earnings of $0.74 per share, missing the Zacks Consensus Estimate of $0.75 per share. This compares to earnings of $0.87 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of -1.33%. A quarter ago, it was expected that this insurance and reinsurance company would post earnings of $0.74 per share when it actually produced earnings of $1.15, delivering a surprise of 55.41%.

Over the last four quarters, the company has surpassed consensus EPS estimates two times.

Fidelis Insurance , which belongs to the Zacks Insurance - Multi line industry, posted revenues of $520 million for the quarter ended March 2024, missing the Zacks Consensus Estimate by 11.25%. This compares to year-ago revenues of $2.05 billion. The company has topped consensus revenue estimates just once over the last four quarters.

The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.

Fidelis Insurance shares have added about 48.5% since the beginning of the year versus the S&P 500's gain of 8.8%.

What's Next for Fidelis Insurance?

While Fidelis Insurance has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?

There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.

Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.

Ahead of this earnings release , the estimate revisions trend for Fidelis Insurance: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.76 on $644.06 million in revenues for the coming quarter and $3.24 on $2.6 billion in revenues for the current fiscal year.

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Insurance - Multi line is currently in the top 28% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

Bank of Nova Scotia ( BNS Quick Quote BNS - Free Report ) , another stock in the broader Zacks Finance sector, has yet to report results for the quarter ended April 2024. The results are expected to be released on May 28.

This bank is expected to post quarterly earnings of $1.15 per share in its upcoming report, which represents a year-over-year change of -8%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.

Bank of Nova Scotia's revenues are expected to be $6.14 billion, up 5% from the year-ago quarter.

See More Zacks Research for These Tickers

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Bank of Nova Scotia (The) (BNS) - free report >>

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