Last but not least, in our 2024 industry trends series, our commercial and specialty team share their thoughts on what to expect this year.

With a hardening market, a second wave of digitisation and hype around GenAI hitting fever pitch, we’re in for another eventful year in the commercial and specialty space.

At the top of our list for 2024 trends at a glance:

  1. The battle for tech talent – while the battle for underwriting talent has been an ever present, the demand for tech leaders in insurance is hotter than ever.
  2. The last of the laggards – no more sitting on the fence on data, even the slowest are acting on the need to improve their data capabilities.
  3. Making hay while the sun shines – with a hard market boosting premiums, the most forward looking are investing ahead of the inevitable softening.
  4. Turning off the capacity tap – last year’s interest rate drop has been putting a stop to the MGA boom that was driven by low rates and greater technological advancements.
  5. The best of times and the worst of times – some will do nothing, some will waste a lot of time and money, and some will see some real value – the hype of GenAI will lead to very different outcomes amongst commercial insurers.
  6. Just do it yourself – no-code, low-code platforms will continue to grow in popularity as speed to market and the removal of IT-shackles catches the imagination.

1. The battle for tech talent

While the battle for talent has been focused on underwriting for decades, this year the fight will be on securing the technology leaders and teams that will drive tech-enabled advantages across commercial and specialty insurers. More than ever, insurers need technology leaders that can cut through the hype coming from their own business leads and the market. Leaders that create the scalable and efficient technology infrastructure that delivers business-enabling tech without eye-watering programme delays and price tags. The demand for this leadership has never been more acute.

2. The last of the laggards, there’s no more sitting on the fence on data

The pain is real with thousands of spreadsheets and old fragile data warehouses still supporting the core functions of some of our commercial and specialty insurers. The operational and compliance risks alone are enough to have driven many to action. Those pushing ahead will tie advanced data architecture to enabling great profitable growth both through the enriching of decision making but also enabling greater plug-and-play with new partners and technologies.

3. Making hay while the sun shines, preparing for the softening

With a hard market boosting premiums, the question will be around how insurers are going to use this time to prepare for the inevitable softening. Deep investments in risk selection, efficient and scalable operations will be the hallmark of the insurers who are thinking ahead. It will also be the mark of those who aren’t left red faced when the tide turns.

4. Turning off the capacity tap

Low interest rates and greater technological advancements helped to drive a serious increase in MGAs before last year’s interest rate rises. As carriers and investors re-think their capital allocation in a higher interest rate world, MGAs will find capacity much harder to find and capacity providers will be more discerning. It won’t be enough to bring a small distribution or underwriting niche, MGAs will need to deliver real returns for carriers.

5. GenAI, the best of times and the worst of time

We’ve already seen the first wave of failed GenAI proofs of concept. Often succumbing to the authoritative tones of ChatGPT without delivering any real accuracy. This year we’ll continue to see a vast difference between those riding the hype with vendors who became GenAI experts only yesterday. To those taking a considered approach to deploying GenAI, building on wider AI expertise, focusing efforts on internal use cases that deliver significant time savings to their teams, sidestepping the risks of exposing a young technology to customers and brokers. And still, we’ll see those satisfied to do nothing, waiting for the technology to mature. We will dive more into how AI is being used across the value chain in an upcoming article.

6. The rise of DIY platforms

No-code, low-code functionality has found its way to the top of 2024’s platform requirements list. This DIY setup enables the design and launch of new products, journeys and models without the need for internal or external technology teams, accelerating speed to market. But similar to my wife’s fears whenever I pick up the toolbox, the concerns around downstream impact on greater complexity on servicing and claims are real and will require effective governance that doesn’t just replace technology inhibitors with internal red tape.

To discuss any of the above and make the most of the unique opportunities 2024 brings, reach out to us today:

Contact us