- Artificial Intelligence (AI): The conference highlighted optimistic and pessimistic views on AI, discussing its potential benefits and risks for the insurance industry, including its impact on jobs and inequality.
- Sustainability: The importance of sustainability, particularly in climate change and complex risk, was emphasised – urging insurers, brokers, and buyers to address the interconnected nature of risks and adopt sustainable practices.
- Quality of Data: The industry recognized the need for better data, with discussions focusing on the benefits of more information for risk assessment and the challenges posed by fragmented and dispersed data sources.
- Collaboration: The conference emphasised the necessity of collaboration among industry stakeholders to tackle the complex challenges they face, including the evolving landscape, technological transformation, and climate change. Collaboration was seen as crucial for innovation, efficiency, and resilience.
The Airmic Conference 2023 brought risk and insurance professionals together to share their knowledge, challenge existing paradigms, and pave the way for a future that embraces innovation and resilience. The buzzwords and hot topics that echoed through the halls served as a reminder of the transformative power of in-person events, igniting a flame that will continue to illuminate the path forward long after the conference’s conclusion.
The following are the insights and learnings our team gained from attending the event, reflecting the valuable knowledge and perspectives exchanged at the Airmic Conference 2023.
As one would expect, AI was present in almost every conversation. On the one hand, optimists claim it is a force for good, a great co-pilot and a path to a more sustainable future. On the other hand, the pessimists fear how it can contribute to more inequality, take jobs and skew the attention from more urgent and necessary industry needs.
Sometimes addressed as climate change, and others as ESG, sustainability was a big topic at Airmic. Although it may not seem like a primary concern for insurers, brokers and insurance buyers, it is. And with good reason: all risk has a complex nature and is deeply interconnected with a much broader and unpredictable web of events, often associated with the catastrophic symptoms of climate change.
Quality of data
There’s one thing unanimous among insurers, brokers and buyers: how much the industry could benefit from better data. Some speakers reinforced that more information means more accurate risk assessments. Others reminded the audience that the critical problem with data nowadays is often the source data, which is inconsistently formatted, often fragmented, and disconnected.
The challenges are immense: an ever-changing complex landscape, climate change, bad data and accelerated technological transformation. That’s to name a few. A repeated theme during the three-day conference was how beneficial it would be if there were better collaboration among the actors in the industry. Whether the incentives are insufficient or the businesses are just not ready yet, the lack of collaboration is vivid in the imagination of an industry missing the courage to take the first step.
Is AI an enemy or an ally?
AI’s ubiquitous presence in nearly every conversation about the insurance industry’s future can be seen as a testament to its relevance. One panellist warned that efficient integration of AI into insurance workflows would require careful consideration of its potential impact on customer service. Another spoke about the need for transparency regarding how AI models operate, highlighting the possibility of implicit biases that could skew operational results.
Although the potential inaccuracy of AI was raised a few times, one panellist from Google cited that AI is still more accurate than humans. The optimists about the subject advocate that AI serves as a formidable ally—a force for good, a trusty co-pilot, and a stepping stone toward a future brimming with sustainability. They highlight its potential to revolutionise industries, augment human capabilities, and tackle pressing global challenges that can affect the insurance industry directly, such as climate change.
However, sceptics harbour fears regarding the far-reaching implications of AI. They raise valid points, emphasising the potential for increased inequality within society. Worries are voiced about the potential displacement of human workers as machines and automation take over tasks previously performed by people. Moreover, critics argue that an excessive focus on AI might divert attention and resources away from other crucial industry needs that demand immediate and undivided attention.
In this ongoing debate, it is crucial to balance optimism and scepticism. While acknowledging the immense potential and benefits that AI can bring, it is equally important to address the ethical and societal challenges it poses. By fostering a nuanced approach that embraces the positive aspects while mitigating the negative consequences, we can harness the power of AI responsibly and forge a path towards a future that combines technological progress with social well-being.
Sustainability and complex risks
The concept of sustainability loomed large within the discussions at Airmic. Recognizing its importance stems from the understanding that all risks are multifaceted, intricately interwoven within a vast and unpredictable tapestry of events. These events, frequently entangled with the catastrophic manifestations of climate change, amplify the urgency and relevance of raising the bar of sustainability in the insurance industry.
The realisation that risk, in its entirety, cannot be viewed in isolation from the broader environmental context has become increasingly apparent. As a catalyst, climate change exacerbates the complexity of risks the insurance sector faces. Its far-reaching impacts permeate various spheres of life, from extreme weather events to rising sea levels and ecological disruptions. The symptoms of climate change intertwine with risk profiles, forging an intricate relationship that cannot be overlooked.
Recognising this intricate web of cause and effect, stakeholders within the insurance landscape are compelled to embrace sustainability as a core concern. Insurers, brokers, and insurance buyers are empowered to adopt a proactive approach by acknowledging the profound interconnectedness between risk and the broader environmental context. By integrating sustainability principles into their operations, they can effectively identify, assess, and mitigate risks arising from the ever-evolving climate landscape.
By fostering sustainable practices, insurers, brokers, and insurance buyers can bolster their resilience and adaptability, fortifying themselves against the ever-unpredictable tide of events and safeguarding the future of the industry as a whole.
Data clarity for the win
A common thread emerges among the industry voices at the forefront, emphasising the correlation between the abundance of information and the accuracy of risk assessment. These proponents argue that access to a wider array of data sources can pave the way for more precise evaluations, enabling stakeholders to make informed decisions and tailor their approaches to individual circumstances.
Conversely, amid these discussions, other speakers raise a crucial concern, shedding light on the challenge of fragmented and dispersed data sources. They underscore that while data is undeniably valuable, its full potential often remains untapped due to the scattered nature of its origins. Data is currently dispersed across multiple platforms, systems, and repositories, resulting in a fragmented landscape that hampers the industry’s full ability to harness its power.
The ramifications of this fragmented data ecosystem are far-reaching. The lack of cohesion and integration between disparate data sources poses significant obstacles. It creates an unnecessary duplication of work (repackaging the same data sets for different audiences). It inhibits comprehensive and holistic risk assessments, hindering the ability to discern patterns, detect emerging trends, and accurately evaluate potential exposures. Consequently, the industry grapples with incomplete pictures, potentially leading to suboptimal decisions and outcomes.
To fully realise the benefits of data, it becomes imperative to address the challenge of fragmentation. Recognising the need for cohesive and standardised data sources, stakeholders must collaborate to develop frameworks and technologies that facilitate seamless data integration. By establishing robust systems that consolidate and harmonise diverse data streams, insurers, brokers, and buyers can unlock the true potential of data-driven insights.
Furthermore, the industry must remain vigilant regarding data quality and reliability. While the quantity of data may increase, ensuring its accuracy, consistency, and relevance is paramount. Striving for data excellence requires robust validation processes, stringent quality controls, and the establishment of trusted data networks that promote transparency and accountability.
It all starts with collaboration
The challenges faced by the industry are undeniably immense, forming an intricate web of obstacles that demand attention. At the forefront of these hurdles lies the ever-changing and complex landscape within which industry players must operate. This dynamic environment, characterised by its volatility and unpredictability, requires a proactive and adaptive approach to stay ahead.
The rapid pace at which technology evolves demands constant adaptation and a willingness to embrace digital innovations. Embracing technologies such as artificial intelligence, automation, and advanced analytics can unlock efficiency gains, improve customer experiences, and enhance risk management capabilities.
In our rapidly evolving landscape, collaboration is no longer a mere suggestion but an imperative. By breaking down silos and fostering an ecosystem of cooperation, insurers, brokers, and other stakeholders can collectively pool their expertise, resources, and insights to confront challenges. Together, they can co-create innovative solutions, share best practices, and jointly navigate the industry’s present and future complexities.
The industry must envision a future where collaboration becomes the norm rather than the exception. By cultivating a culture of openness, trust, and shared purpose, the industry can overcome its hesitations and embark on a transformative journey towards resilience, agility, and sustainable growth. The challenges may be immense, but the industry can harness collective strength through collaboration and pave the way for a brighter and more prosperous future.