American roadways carry 13 million trucks, 2.9 million of which are semis that keep the country moving and connected. There's a lot at stake every time a driver gets in the vehicle, leaving fleet managers to face daily challenges and potential safety risks. 

Due to the increase in inflation, fleet managers have had to focus less on making fleet improvements and investing in software to help navigate driver safety and vehicle maintenance. Thankfully, with inflation easing and the fleet management market expected to grow to $16 billion by 2025, managers have the opportunity to reassess their operational strategies, particularly when exploring advanced telematics solutions that were previously out of reach.

Operational Efficiency Through Real-Time Data

Telematics solutions have proven critical for managing fleet-related risks, and now, with reduced financial pressures, there's room for investment in more advanced systems. These platforms provide real-time data on vehicle health, performance and driver behavior, which can directly affect the fleet's bottom line. This data also improves underwriting accuracy and helps fleets adopt safer driving practices, thus reducing accident-related claims.

With these real-time data and actionable insights, fleet managers can cut fuel consumption, reduce vehicle downtime and enhance operational efficiency — all factors that also help insurers manage their risk portfolios more effectively. Modern telematics systems can bridge the gap between reducing fleet operational costs and offering insurers more reliable data to support policy pricing and claims adjustments. Telematics provides more than economic relief; it's a risk mitigation solution that helps push fleets toward a safer future.

Mitigating Risk With Safety Measures

The ability for fleets to maintain real-time visibility into the location and status of assets can prevent costly delays and improve the overall reliability of operations. Here are some ways telematics solutions offer fleets the ability to reduce insurance premiums:

• Improved Driver Behavior: Telematics tracks driver habits such as speeding, harsh braking, rapid acceleration and excessive idling. With real-time data, fleet managers can coach specific drivers on safer behaviors, leading to fewer accidents and lower risk. Driver behavior monitoring through telematics has decreased speeding incidents by 34%, harsh braking by 26% and idling by 9% on average.
   
• Maintenance Scheduling: Solutions monitor vehicle health, ensuring that preventative maintenance occurs before breakdowns or safety issues arise. Well-maintained vehicles are less likely to be involved in accidents.
   
• Accurate Data for Claims Management: Comprehensive data can provide accurate, real-time information about an accident, including speed, location and impact details. This data can speed up the claims process and reduce the chances of fraudulent claims.
   
• Compliance With Safety Regulations: A strong compliance record reduces the risk of regulatory penalties, making fleets more favorable candidates for lower insurance costs. Telematics assists fleets in adhering to safety regulations by tracking compliance through inspection and certification requirements.
   
• Reduction of Idle Times and Improvement in Fuel Efficiency: Telemetry data can help optimize routes and reduce idle times, leading to more fuel-efficient and cost-effective operations. Fleets using telematics for route optimization and idle time reduction can achieve up to 15% to 20% fuel cost savings. Reduced insurance premiums can also reflect improved efficiency and lower operational risks.

By improving overall safety across fleets, reducing risks and streamlining operations, telematics makes fleets more attractive to insurers, leading to significant reductions in insurance premiums over time.

A Way Forward: Choosing the Right Telematics Provider

For fleet managers, finding the most technologically advanced system must include having the right partner. A good telematics provider isn't simply a vendor offering a product; they are a strategic ally who works closely with fleet managers to ensure the system delivers accurate, actionable data that enhances day-to-day operations.

The newfound financial flexibility offered by today's easing inflationary pressures provides an opportunity for fleet managers to reassess whether their current provider is meeting their evolving needs. The best telematics partners will provide seamless implementation and continuous support, helping fleets navigate current economic conditions and future challenges.

As the inflationary tide begins to recede, the once-distant horizon of advanced telematics solutions is now within reach, offering a strategic advantage for those who invest. By leveraging this economic opportunity, fleet managers can reduce operational costs, enhance safety and lay a solid foundation for sustainable growth.

As we head into 2025, client retention remains a top priority for agents navigating the current insurance landscape. While market conditions have softened for certain lines and could soften for others, the lingering effects of rising premiums, coverage restrictions and evolving client expectations are making retaining business and maintaining strong relationships paramount.

In this environment, agents must prioritize strategies that enhance the client experience and drive individual and agency growth.

Retention is no longer a reactive process. It's a continuing strategy. Agents who are proactive in their communication and offer personalized solutions will stand out in 2025.

Here are five key focus areas to help agents retain clients and navigate the year ahead:

1. Prioritize Client Communication Early and Often

One of the biggest lessons from 2024 is the importance of proactive communication in a challenging market. Clients, facing rising premiums due to factors like inflation, supply chain disruptions and increased litigation costs, are more likely to shop around if they feel underappreciated. Agents who establish consistent touchpoints and address concerns early on can foster stronger relationships and build trust.

To make the most of your communication strategy, agents should focus on the following:

• Start renewal conversations early. Engage clients at least 90 days before their policy's expiration date to review coverage, explain market conditions and address any life or business changes that could affect their renewal.
• Provide regular updates. Keep clients informed throughout the year about changes in coverage, potential premium increases and risk management strategies to mitigate surprises.
• Manage expectations. Set clear expectations on the renewal process and any potential changes in coverage to reduce frustration and ensure transparency.

See also: 5 Tips for Client Acquisition in a Volatile Market

2. Focus on Personalization

As the insurance landscape becomes more complex, clients expect a more tailored experience, and data plays a critical role in meeting those expectations. By tapping into various data sources — such as customer demographics, claim history and purchasing behaviors — agents can tailor communications and policy recommendations more precisely, helping them stand out.

To effectively personalize your client interactions, consider the following strategies:

• Segment your clients: Group your clients based on risk factors, demographics and needs. For example, those in catastrophe-prone areas may benefit from more frequent updates on potential rate changes due to weather-related risks.
• Customize coverage recommendations: By leveraging a broad range of client data — such as financial profiles, lifestyle preferences, business performance metrics and claims history — agents can deliver more relevant and personalized policy suggestions. Whether it's adjusting coverage to reflect a recent life event or a significant business expansion, tailored recommendations not only enhance client satisfaction but also foster loyalty, reducing the chances of clients seeking alternative coverage.
• Incorporate client feedback: Use client reviews and feedback from platforms such as Google and Yelp to continually ensure that clients feel heard and valued.

3. Streamline the Renewal Process

A smooth and transparent renewal process is essential to client retention, especially in a challenging market. Many clients are wary of premium increases and coverage changes, which makes it crucial to simplify the process.

To streamline the renewal process, focus on the following:

• Highlight coverage changes: Use the renewal as an opportunity to assess clients' needs and adjust their policies accordingly. This includes evaluating new risk exposures, such as a home purchase or a growing business.
• Leverage technology: Incorporate digital tools to streamline routine tasks for agents, such as automating policy renewal reminders, processing claims and handling paperwork. Digital tools can help agents save time, reduce errors and maintain better client records.
• Offer self-service options: Provide clients with user-friendly online portals, where they can review their policies, manage renewals and make payments. Self-service tools empower clients to take control of their insurance needs with real-time access to documents, payment options and coverage details, enhancing their overall experience and satisfaction.

See also: 10 Reasons to Stress Customer Retention

4. Offer Value-Added Services to Build Long-Term Loyalty

In today's insurance market, it's not enough to simply provide coverage. Agents need to go above and beyond by offering services like risk management consulting and educational resources, which positions them as trusted advisers.

Here's how to provide value-added services that foster long-term client loyalty:

• Offer risk management consulting. Help clients manage their risks, reducing exposure and improving their insurability. For instance, an agent could use a tool to identify hazards in a client's home, such as living in a high-wildfire-risk area. Based on these insights, the agent can recommend preventive measures like installing fire-resistant landscaping or upgrading roofing materials, which not only minimize risk but also improve the client's chances of qualifying for lower insurance premiums.
• Provide educational resources. Equip clients with the knowledge to make informed decisions, whether about emerging risks or understanding complex coverage. For example, a webinar on cyber liability insurance could help small business clients understand the importance of data protection and lead them to invest in additional coverage.
• Create a loyalty program. Implement a loyalty program that rewards clients for renewing their policies with exclusive benefits, such as discounted premiums or free annual risk assessments.

5. Use Data Analytics

Data has transformed the insurance industry, and, in 2025, leveraging analytics will be critical to building effective retention strategies. Agents who harness data to understand client behavior, preferences and risk profiles can create more targeted, helpful communication and improve client satisfaction.

To maximize using data analytics in retention strategies, agents should:

• Identify at-risk clients. Use an agency management tool or customer relationship management system to track client behavior, such as delayed payments, which may indicate dissatisfaction. For example, if a client frequently contacts customer service about billing issues, this can trigger an outreach with a personalized offer, such as flexible payment options or a review of their premium, to prevent them from shopping elsewhere.
• Measure client satisfaction. Implement surveys through platforms like SurveyMonkey or Net Promoter Score (NPS) tools to gauge client satisfaction and identify areas for improvement. Agents can use this feedback to improve processes and enhance overall customer experience.
• Optimize cross-selling opportunities. Use built-in analytics tools from your agency management system to identify existing clients who may benefit from additional products. For example, if a client holds home and auto insurance but not an umbrella policy, the system can flag this gap, allowing the agent to offer a tailored bundle, deepening the relationship and providing more comprehensive coverage.

Navigate 2025 With Confidence

As agents prepare for 2025, client retention will rely on proactive communication, personalized service and a smooth renewal process. By focusing on these strategies, agents can strengthen client relationships, improve satisfaction and confidently navigate 2025's challenges. Leveraging data-driven insights, offering value-added services and building long-term loyalty will set agents apart in an increasingly competitive market.

Agents who approach 2025 with a thoughtful, strategic plan — their "why" — will not only retain clients but also strengthen their individual relationships and build a more stable and resilient foundation for future growth.

Juries in the U.S. have ordered a record number of supersized verdicts against companies in recent years. "Nuclear" verdicts have almost tripled since 2020, while the median verdict value has more than doubled.

In 2023 alone, the number of nuclear verdicts (more than $10 million) grew by more than 27%, while the number of "thermonuclear" verdicts (more than $100 million) increased by 35%, according to Marathon Strategies, affecting industries ranging from automotive to entertainment to chemicals. Such verdicts are not just a problem for U.S. companies as they also affect international firms doing business in the U.S., according to a new report from Allianz Commercial.

See also: Top Causes of Business Insurance Loss

The rise in nuclear verdicts

Growth in the number and size of these verdicts is down to multiple drivers, including growing mistrust of corporations, the changing tactics of plaintiff attorneys, the erosion of tort reform, changes in jury pool demographics, and the normalization of such verdicts, including the rise of billion-dollar awards for personal injury. Awards can be driven by a combination of punitive, compensatory and non-economic damages, such as pain and suffering, all of which are increasing. Such upward trends in social inflation are not sustainable for the long term, as the increasing costs from nuclear verdicts ultimately fall back on businesses, consumers and insurers.

Pharma class actions more complex and volatile

Recent years have also seen a growing list of pharmaceutical, food and chemical products become the target of billion-dollar class action litigation, including opioids, talcum powder, indigestion remedies and herbicide. Cancer is increasingly a feature of such litigation. Scientific research, regulatory orders or voluntary withdrawal of products that may be carcinogenic can trigger litigation. Such claims create volatility for liability insurance due to the long latency of cancer symptoms, with risks only understood many years after a product was sold and the insurance underwritten.

PFAS litigation mounts

A class of synthetic chemicals used widely in industrial and consumer products such as food packaging, cosmetics and household goods and even firefighting foams since the 1940s, PFAS, also known as forever chemicals because of their resistance to degradation, have been the subject of mounting litigation in recent years. This has largely been focused on three main areas: environmental pollution; water and waste treatment/contamination; and personal injury, such as people working directly with products, like firefighters.

While litigation has so far concentrated on the U.S. – environmental contamination-related PFAS settlements are already in the double-digit billions of dollars – there have also been cases elsewhere, for example in Europe. The extent of future litigation is uncertain, although further regulatory measures may play a part in shaping the trends.

See also: Climate Change and Product Liability

Collective actions outside of the U.S.

Social inflation is predominantly a U.S. phenomenon, but moves to increase access to justice in Europe could result in a rise in collective actions.

Collective actions are already becoming more prevalent in some European countries, as consumer groups start using collective redress frameworks and legislative change to chastise companies and fund remedial work, while consumer protection agencies have already brought claims in areas like water quality and pharmaceuticals. A record number of class actions were filed in Europe in 2023 (133), up 10% from 2022, according to law firm CMS, with the U.K., Netherlands, Germany and Portugal accounting for over three-quarters of these. Product liability, consumer and personal injury were the largest sources of litigation.

Major causes of liability claims

Defective product incidents account for more than 40% of the value of all liability claims over the past five years, with the other most expensive causes of claims including collision/crash incidents, faulty workmanship/maintenance and bodily injury.

Read the full Allianz Commercial Liability Loss Trends Report here.

The threat of climate change is an urgent reality that businesses across industries and regions are increasingly grappling with. As global temperatures rise, extreme weather events — including wildfires, storms, heatwaves, floods and droughts — are growing in both frequency and intensity. These events affect employee health, property and supply chains, underscoring the importance of understanding climate change's effect on not only the environment but also the operational viability of businesses.

Extreme weather can spoil perishable goods, damage packaging and weaken critical infrastructure like asphalt, which limits transportation. Water shortages disrupt global supply chains in agriculture, manufacturing and energy. For instance, Emirates Airlines suffered a $110 million loss due to severe rainfall in April 2024, while floods in Malaysia disrupted semiconductor supplies. These incidents serve as stark reminders of the pressing need for businesses to adopt strategies that mitigate climate-related risks and enhance their resilience in the face of such challenges.

See also: Climate and Catastrophe Risk Strategies

Adapting to Climate Challenges

As climate challenges intensify, businesses, local communities and governments must adapt swiftly. The Marsh McLennan Flood Risk Index reveals that nearly a quarter of the world's airport capacity and a third of global trade are at risk from flooding, with these risks expected to double if temperatures rise by 2 degrees Celsius. Adapting to climate change is essential for effective risk management;;according to a Marsh survey, half of corporate respondents reported experiencing extreme weather events in the last three years. Recognizing this urgency, companies already have the tools to respond to these unpredictable events, from risk management frameworks to business continuity plans.

While 83% of companies are aware of climate-related physical risks, only 48% assess them quantitatively, often overlooking connected, system-wide factors such as suppliers, regulators and ecosystem services. However, it is encouraging that 90% have begun climate adaptation discussions, focusing on business continuity planning, asset engineering and adapting work patterns to manage climate risks. This growing awareness indicates a shift toward recognizing the importance of embedding climate resilience into corporate strategies.

Building Comprehensive Adaptation Strategies

Effective adaptation requires a comprehensive approach that includes assessing supply chain vulnerabilities. Businesses must look beyond core operations and consider the dependencies of their suppliers and partners to understand how climate risks might disrupt supply chains. Increasingly, companies are aware that aligning resilience planning with these external factors is critical; however, true risk mitigation requires a collaborative, cross-organizational approach. By fostering partnerships across their supply chains and engaging with stakeholders on resilience efforts, businesses can create more robust strategies for managing climate-related risks.

Although many companies acknowledge the value of climate adaptation, only 43% currently apply cost-benefit analysis when planning for it, and few integrate resilience considerations into insurance strategies. Products like parametric insurance provide options for companies to mitigate financial losses from extreme weather. Corporate risk managers also play a vital role in embedding resilience through infrastructure and technology investments that can withstand climate disruptions.

See also: Parametric Insurance Can Tackle Climate Risks

Engaging Stakeholders for Long-term Resilience

Adaptation strategies must encompass factors like government regulations, ecosystem dependencies and community well-being. Viewing adaptation as an investment rather than a cost positions businesses for greater resilience over the long term. Collaborative efforts across stakeholders — including governments, capital providers and local communities — are critical to building a climate-resilient framework. This collaborative approach not only enhances individual business resilience but also contributes to broader community stability in the face of climate challenges.

To ensure adaptation strategies remain effective, businesses must set measurable resilience goals and continually review and refine them as climate risks evolve. Here, corporate risk managers can apply the "3 As" — Ambition, Analysis and Action — as guiding principles:

• Ambition: Establish clear resilience goals and define the level of climate preparedness required.
• Analysis: Assess risks across assets, operations and stakeholders to identify the most important adaptation strategies.
• Action: Prioritize adaptation measures, build a strong business case for funding and guide implementation.

Concentrating on the "3 As" framework empowers businesses to avoid disruptions, recover quickly from losses and adapt to continuing changes in climate risk.

Closing Points

Through a holistic strategy that protects operations, assets and supply chains, businesses can ensure that they not only survive but thrive in the face of intensifying climate challenges. Now is the time for businesses to act by embedding resilience into their strategies and securing a sustainable future for themselves and their communities.

Commercial property insurance managers face an increasingly intricate set of challenges, from heightened risk complexity and regulatory demands to fluctuating market dynamics and data overload. Although challenging, these conditions offer an opportunity to change the risk landscape. 

By embracing data-driven strategies and advanced analytics, insurance professionals can move toward a future that is more resilient, efficient and client-centered.

This piece explores how commercial property insurance is changing, driven by cutting-edge technology that's making risk assessment more precise and portfolio management smoother. Internet of Things (IoT) devices, for example, enable real-time monitoring, which means potential risks are spotted early. With artificial intelligence-powered predictive models, insurers gain the insights they need for strategic decisions. These tools work together to help insurers enhance risk assessment accuracy, reduce risks, make smarter decisions and improve operations, all of which benefit both clients and the business.

Challenges in Commercial Property Insurance Management

Commercial insurance managers face challenges:

• Preparing for Emerging and Increasing Risks: As commercial properties become more advanced, the complexity of risks grows. Managers now face a range of challenges, from cybersecurity threats in smart buildings to the effects of climate change and emerging risks like pandemics and social inflation — issues that traditional models may not fully cover.
• Managing Data Overload: Huge amounts of data come from IoT devices, climate models and economic indicators. While this data can be valuable, it's overwhelming. Managers have to sift through it to find the important bits that will truly help with risk assessment and pricing.
• Dealing with Increasing Regulatory Pressures: Regulations are constantly changing, and insurance professionals have to keep up, especially across different regions. Staying on top of all the shifting rules can make risk management and pricing more complicated.
• Coping with Mounting Pressures for Precision: In a competitive market, there's pressure for accurate and detailed pricing. Insurance managers need to use advanced tools and methods to evaluate properties more thoroughly.
• Balancing Market Fluctuation: Property values and construction costs make it challenging for insurance managers to maintain accurate risk assessments and pricing. To stay competitive, insurers must quickly adapt to these changes while balancing the need to offer attractive rates and maintain profitability amid rising claims and costs.

These growing challenges mean that traditional methods of risk assessment and management are no longer sufficient. Commercial insurance managers are feeling the pressure to innovate, adapt and use new technologies to stay ahead in an increasingly complex environment.

See also: The Growing Need for Real-Time Data

The Importance of Infrastructure Management for Insurance Leaders

For commercial insurance managers, understanding a property's infrastructure is key to accurate risk assessment and pricing. Well-maintained systems don't just keep things running smoothly — they're also crucial for preventing claims and minimizing risk.

Take electrical systems. According to the National Fire Protection Association (NFPA), electrical equipment failures, particularly in distribution, lighting and power transfer systems, were the leading cause of structure fires in industrial properties from 2017 to 2021. This makes it clear why insurance managers need to closely evaluate electrical maintenance and upgrades when underwriting policies.

Water damage is another concern. For insurers, this highlights the need to encourage measures like regular plumbing checks and installing leak detection systems in the properties they cover.

Advancing Risk Management Through Technology

The adoption of advanced property risk management software offers commercial insurance managers a comprehensive solution for addressing today's multifaceted challenges. These platforms are designed to enable:

• Risk Identification through Analytics: Analytics allow managers to recognize issues before they escalate, equaling more accurate underwriting and pricing.
• Predictive Maintenance: Tools that predict maintenance needs allow managers to address looming issues ahead of time, lowering the chances of claims.
• Real-Time Monitoring: IoT-powered monitoring devices deliver real-time risk profiles, enabling insurance managers to make prompt adjustments.
• Risk Mitigation Plans: Comprehensive strategies can be added into policy terms and pricing models, supporting clients and insurers.
• Sustainability Integration: Sustainable practices reduce risk and also lower costs, allowing insurers to offer additional competitive premiums.

These innovations give commercial insurance managers the tools to take a more proactive approach, which can lead to fewer claims and healthier portfolios. By assessing risks more thoroughly, insurers can create personalized policies that better meet client needs, strengthening those relationships in the process.

The Importance of Building Stronger Client Partnerships

There's a growth opportunity in strengthening client relationships. Studies show that less than half of commercial insurance clients are happy with their carriers, which highlights the need for a more collaborative approach.

By moving past the traditional annual renewals, insurance managers can build stronger, long-term partnerships with clients, offering continual insights into their changing risk profiles. With data-driven strategies, managers can give more personalized recommendations, leading to better risk management and higher client satisfaction.

See also: How External Data Is Revolutionizing Underwriting

On the Horizon

As the commercial property insurance industry continues to evolve, those who embrace data-driven strategies and active risk management will be in the best position to navigate its challenges. With tools like AI-powered risk assessments, real-time monitoring and predictive analytics, forward-thinking insurance professionals are raising the bar for efficiency and client service. By turning challenges into opportunities, commercial insurance managers can drive sustainable growth and lead the way toward a more stable, transparent and mutually beneficial future.

From synthetic identities to AI-powered scams, fraudsters are becoming increasingly sophisticated in their attacks, adapting their tactics and leaving organizations scrambling to protect their assets and customers.

Fraud is also becoming more costly, responsible for businesses worldwide losing an estimated 5% of their annual revenues through various schemes.

Forbes estimates that insurance fraud costs companies more than $300 billion annually. Of course, companies aren't the only victims as fraud is associated with a $900 increase in customer premiums.

That's why insurers face a difficult task: combating fraud and implementing consumer protections without eroding the customer experience.

Fortunately, it is possible. Here's how.

See also: How GenAI transforms insurance fraud

Adapt to the Latest Fraud Trends

Few technologies garner as much attention and trepidation as generative AI (Gen AI) and machine learning (ML). Just two years after OpenAI's ChatGPT made Gen AI known and accessible to the masses, 65% of companies say their organizations are "regularly using Gen AI."

Fraudsters feel the same way, leveraging these advanced technologies to develop more sophisticated schemes, automate attacks and exploit vulnerabilities faster than ever before.

More specifically, Gen AI poses a threat to insurance providers because it allows fraudsters to quickly fabricate realistic and difficult-to-detect fake identities and documentation that can be used to carry out fraudulent activities.

Among the most troubling developments is the evolution of familiar types of fraud, such as synthetic identity fraud (SIF) and phishing.

For instance, 60% of insurers report seeing an increase in SIF at their organization, and 67% say they are concerned about SIF increasing in the future.

To be sure, SIF, phishing and fake documentation are not new tactics. However, Gen AI is taking them to another level, making implementing these tactics easier and more effective. A recent fraud report found that business leaders and decision-makers rank Gen AI (and the tactics it enables) as the most significant fraud trend over the next three to five years.

Awareness is the first step to fraud prevention. Understanding the potential dangers of Gen AI allows organizations to stay ahead of emerging threats, implement advanced detection methods and adopt a multilayered approach to safeguard against the evolving fraud landscape.

Account for Omnichannel Fraud

Fraudsters are looking to exploit customers where they are, making mobile and online channels the top targets.

However, fraud isn't just a mobile problem. It's increasingly cross-channel, so contact centers and in-person channels can't be ignored.

In response, insurers need to cultivate a holistic, multilayered approach to identity verification to effectively mitigate the threat of fraud on connected systems of online and offline channels.

With a multilayered approach to identity verification, insurers can effectively balance security with customer expectations for an experience that builds trust, deters fraud and increases revenue.

As a result, more than three-quarters of decision-makers say that identity verification can be a strategic differentiator, allowing them to outpace the competition in fraud prevention and customer experience.

See also: Deepfakes: An Emerging Cyber Threat

Collaborate to Maximize Impact

Fraud moves fast, and Gen AI and other technologies are only accelerating its evolution. This makes it more likely that bad actors will do more damage faster across industries. A single insurer's database provides a limited view of wider fraud activity and behavioral trends.

To stay one step ahead of the fraudsters, the insurance sector must collaborate with cross-industry intelligence consortiums to better evaluate risk and remain competitive.

In total, 81% of companies think cross-sector identity intelligence sharing and collaboration can be a strategic differentiator when combating fraud.

By combining insights from multiple commercial and government sources, insurers are best positioned to authenticate genuine customers and spot fraud signals or suspicious identities.

Simply put, fighting fraud is a team effort. Insurers that want to stay ahead of fraudsters and maximize the customer experience will collaborate to share intelligence, leverage broader data ecosystems and adopt unified strategies that enhance fraud detection while streamlining the customer journey.

Security and Customer Experience Without Compromise

For the insurance sector, fraud is becoming more common, sophisticated and consequential.

Insurers face a difficult challenge. They must protect against increasingly sophisticated fraud attempts while also delivering seamless customer experiences.

That's why the future of insurance belongs to companies that can turn the fraud prevention challenge into an opportunity for customer excellence.

As the insurance industry forges ahead in its digital journey, it faces a crossroads: choosing between modern legacy systems and truly cloud-native solutions. This decision is crucial, as the myths surrounding digital transformation can lead to strategic missteps, causing insurers to opt for seemingly modern but ultimately inadequate systems.

Myth #1: Partial Modernization Is Effective

Many insurers believe that upgrading parts of their technological infrastructure is sufficient. However, this often results in a disjointed system that cannot leverage the full benefits of digital transformation. Cloud-native technology, unlike modern legacy systems, offers comprehensive integration and scalability, ensuring that all components work together seamlessly, enhancing overall efficiency and agility.

Myth #2: New Systems Equate to Modernization

The assumption that new systems are automatically superior is misleading. Modern legacy systems, despite being newer, often lack the foundational architecture required for true cloud integration. Cloud-native solutions are designed from the ground up to use cloud capabilities fully, providing flexibility and resilience that modern legacy systems cannot match.

Myth #3: Vendor Solutions Guarantee Latest Technology

Many insurers are under the impression that vendor solutions offer the latest technology. However, many such solutions are grounded in modern legacy frameworks, which are not genuinely cloud-native and require substantial future modifications. Cloud-native platforms, on the other hand, are continuously updated and inherently designed to incorporate the latest technological advancements effortlessly.

Myth #4: One-Size-Fits-All Solutions

The belief in a universal solution is another pervasive myth. Modern legacy systems were built to solve the internal operational needs of an insurance company as they were defined five to 10 years ago. Cloud-native technologies challenge this by offering customizable and scalable solutions that can adapt to new and emerging business needs without the extensive customizations that modern legacy systems often necessitate.

Myth #5: Simple Solutions for Complex Integrations

Finally, the idea that a simple, out-of-the-box solution can address complex integration challenges is flawed. Cloud-native architectures excel in handling complex integrations by using microservices and APIs, which simplify connectivity and enhance data flow between different systems.

The Perils of Modern Legacy Systems

Modern legacy systems, often viewed as future-proof, are merely adapted older solutions, not truly cloud-native. These systems may require significant overhauls within a few years as they struggle to meet evolving technological demands.

The shift from modern legacy to cloud-native is more than an upgrade; it's a comprehensive, sometimes disruptive, transformation. These systems, while recently developed, were not designed with cloud environments in mind, leading to the inevitability of large-scale rewrites within five years.

This cycle of continuous re-implementation could lead to substantial operational disruptions and financial burdens, underscoring the importance for insurers to choose genuinely future-proof, cloud-native technologies from the outset.

The Future of Insurance Technology With Cloud-Native

The adoption of cloud-native technology marks a pivotal development in insurance technology, setting a new standard for flexibility, scalability and integration capabilities. Unlike modern legacy systems that are retrofitted into cloud environments, cloud-native technologies are designed from the ground up to fully leverage the cloud's potential. This intrinsic compatibility with cloud environments enables insurers to innovate faster, scale more efficiently and respond more adeptly to market changes. These technologies provide the following benefits:

• Scalability and Flexibility: They scale dynamically and adapt quickly to changing business needs.
• Enhanced Integration: They support seamless integration with other technologies, facilitating a more connected and efficient ecosystem.
• Continuous Innovation: They enable insurers to leverage continuous updates and innovations without the need for disruptive overhauls.

In the wake of recent data breaches, like the 2023 Infosys McCamish Systems incident affecting over 6 million individuals, the insurance sector faces mounting cybersecurity challenges. The National Association of Insurance Commissioners emphasizes, "Insurers and insurance producers must protect the highly sensitive consumer financial and health information collected." Effective B2B Identity and Access Management (IAM) is crucial for safeguarding third-party identities and maintaining trust in this high-stakes industry.

Protecting the identities of third parties — brokers, partners, subsidiaries, agents, reinsurers and customers — through an effective B2B IAM strategy is critical. Failure to protect these identities can lead to data breaches, regulatory penalties, loss of customer confidence and even legal battles.

Managing Third-Party Identities to Meet Stringent Requirements

In the insurance industry, compliance with regulations like the General Data Protection Regulation (GDPR), California Consumer Privacy Act (CCPA) and Digital Operational Resilience Act (DORA) is non-negotiable. These regulations impose strict rules on how companies handle customer data, including third-party access to sensitive information. This challenge grows as external identities — contractors, consultants and brokers — outnumber internal employees.

According to the Thales 2024 Data Threat Report (DTR), external identities account for almost half (48%) of total users accessing corporate networks, a number that rises to 64% if corporate clients, which fall under the B2B category, are included.

This is critical because data breaches resulting from third-party vulnerabilities can have devastating effects, both financially and reputationally. According to industry research, 54% of organizations suffered data breaches thanks to third parties in the last year, and the average cost of a data breach reached $4.9 million in 2024.

B2B IAM systems designed specifically for third-party users can play a critical role in achieving compliance. By controlling who accesses sensitive data, ensuring consent management and implementing robust authentication processes, insurance firms can maintain regulatory standards.

For instance, relationship-based access control (ReBAC) enables these entities to assign permissions based on roles and relationships. Such fine-tuned control prevents unauthorized access and maintains compliance with data privacy regulations, limiting the risk of violations and hefty fines.

See also: How Insurance Fraud Erodes Consumer Trust

Safeguarding Information Through Third-Party Access Control

Protecting customer data is paramount in an industry built on trust. The insurance sector deals with sensitive personal information, from financial records to medical histories. Any breach of this data can have severe consequences, such as regulatory penalties, legal woes and loss of customer trust.

Third-party access is a chink in the armor, as supply chain attacks and data leaks often involve external identities. According to the DTR report, nearly one-quarter of respondents cited external identities as a top three target for cyberattacks.

Effective IAM solutions mitigate this risk by only allowing third parties access to the data they are authorized to view based on customer consent. Multi-factor authentication (MFA), single-sign-on (SSO) and self-service access requests boost security further by reducing the chances of unauthorized access.

User delegation, another key feature of B2B IAM, further improves data protection. Letting partners manage their own users within defined boundaries means the burden on internal IT teams is lifted, and users who no longer need access are rapidly offboarded. This shrinks the window of opportunity for malefactors and removes standing access privileges, which could be exploited.

Streamlining Access While Minimizing Risks

For mid-sized to large insurance companies with complex B2B networks, operational efficiency is paramount. The cornerstone of effective B2B IAM is delegated user management (DUM), which significantly offloads IT and internal business managers. This feature allows organizations to delegate access rights to business partners, which can then manage their own users, creating a streamlined chain of authorization.

For example, P&V Group, a Belgian insurer, implemented a customer identity and access management (CIAM) solution to provide secure, 24/7 access to services for its vast network of brokers and independent advisers. This implementation reduced administrative tasks, created more efficient workflows and improved customer service.

Similarly, Klaverblad, a Dutch insurer, adopted a cloud-based B2B IAM platform that features complete eHerkenning login capabilities, including SSO and two-factor authentication. This solution not only enhanced security but also improved user experience for their independent advisers and business users.

These case studies demonstrate how B2B IAM solutions can simplify the onboarding and offboarding of external users while ensuring compliance with regulatory requirements. By unifying the management of internal and external identities, these systems grant access securely and efficiently, addressing the challenge of security consistency across workforce and non-workforce identities.

As insurance companies digitize their operations, scalable IAM systems become crucial. Automated workflows for provisioning and de-provisioning access improve security, enable faster response times and ultimately lead to improved productivity and cost savings.

See also: Top 10 Challenges for Data Security

Integrating Security and Business Enablement

As business environments grow more connected, managing third-party identities goes beyond security to become a true business enabler. B2B IAM solutions help streamline all these external relationships, ensuring that security does not become a barrier to business growth.

Insurance firms that effectively implement B2B IAM can cut the costs of administering third-party users while protecting themselves against identity-based attacks. These solutions also help insurers stay on the right side of regulatory watchdogs, protect their customers' personal information and enhance operations.

The adoption of dashcams is skyrocketing. While the global dashcam market garnered $4 billion in 2022, it is predicted to surge to $12 billion by 2033.

Compared with many parts of the world, the U.S. has been slow to adopt dashcams, but that is changing. Recent statistics reveal that between 10% and 18% of U.S. drivers employ dashboard cameras. 

Their growing popularity is linked to an unfortunate trend of insurance fraud. Each year, staged auto accidents cost insurance companies enormous amounts of money, which increases premiums for honest policyholders. Worst of all, these incidents put innocent lives at risk. 

The growing presence of dashboard cameras on the road is proving to be a game changer, ensuring accountability and providing reliable evidence in traffic incidents.

See also: Dashcams for All

Examining the latest viral example of car insurance fraud

Just weeks ago, Ashpia Natasha was driving on the Belt Parkway in Queens when a Honda Civic abruptly cut her off, forcing her to brake hard. The Civic stopped completely, before reversing, and smashing into Natasha's Acura. Three of the Civic's occupants jumped out of the vehicle, acting injured and taking photos of Natasha's car.

Unnoticed by Natasha at the time, a fourth passenger exited the Civic and jumped into a waiting red Kia that fled the scene. Initially confused by the bizarre incident, Natasha later reviewed her dashcam footage and suspected it was a case of insurance fraud.

Fortunately, Natasha sustained no injuries in the crash, but her car will cost over $8,000 to repair. The dashcam video clearly reveals the suspicious activities of the Honda's occupants, which have garnered over 67 million views on TikTok.

Common scams that can be revealed with dashcams

Though what happened to Natasha is shocking when viewed online, the scam, or "swoop and squat," is well known. In a dangerous maneuver, a car (the "swoop" vehicle) cuts in front of a "squat" vehicle, causing its innocent driver to brake abruptly and rear-end the "swoop" car. An even more dangerous version occurs on freeways, where multiple criminals box in the victim, preventing evasive maneuvers. Only with dashcam footage do the suspicious movements and orchestration of the crash become evident.

Another scam to watch for is the "left turn drive down." In this scam, the fraudster waves at the victim to indicate that it's safe to turn, then suddenly blocks the path, causing another vehicle to crash into the victim. Fortunately for drivers caught in this scenario, a dashcam can provide clear evidence that the perpetrator gave misleading signals and purposely caused the crash.

In the similar "right turn drive down," the criminal intentionally crashes into the victim's car as they make a right-hand turn. With a dashcam, the recorded footage can show the exact movements of both vehicles and highlight that the collision was set up.

Finally, during the "curb drive down," a driver leaving a parking spot at a curb and merging into traffic is deliberately struck by another car. In these scams, dashcams provide invaluable proof of the staged nature of the incident, showing fraudsters suddenly and intentionally crashing into the victim.

Dashcam footage is becoming the keystone evidence in disputed incidents

One of the most complex and contentious aspects of traffic incidents is dealing with conflicting accounts. When two parties provide differing versions of the same event, the truth often becomes mired in uncertainty. Witness testimonies, while valuable, are influenced by perspective, memory or personal bias. If available, dashcam footage gives us an objective viewpoint.

Imagine a scenario where two drivers claim the other was at fault during a collision at an intersection. Determining the liable party can be challenging without clear evidence, resulting in prolonged disputes and potentially incorrect settlements. However, with dashcam footage, the sequence of events is laid bare in front of investigators, insurers and the courts. The camera captures crucial details, such as the speed of vehicles, the timing of traffic signals, the presence of road signs and the actions of pedestrians.

See also: Preventing Sophisticated Car Insurance Fraud

Dashcams create safer and more accountable drivers

The advantages of dashcams extend beyond personal protection. With more and more people adopting this technology, the widespread use of dashcams is expected to significantly improve overall road safety and accountability.

Fraudsters are less likely to attempt deceitful claims when they are aware of the presence of dashcams because dashcams capture compelling evidence that can substantiate the events leading up to, during and after an accident. Naturally, reduced instances of fraud lead to lower operational costs for insurance companies and more competitive premiums for consumers.

Research shows that, in addition to preventing fraud, dashcams cause reckless drivers to think twice because they know that risky or illegal driving behavior is likely to be recorded. A study of commercial vehicles reveals that 87% of U.S. crashes are due to avoidable errors or risky driving. Another study claims that commercial accidents are 60% less likely and 86% less expensive when drivers employ a dashcam solution that offers feedback to the driver.

The unexpected can unfold in seconds, but dashcams emerge as a revolutionary tool providing clarity amid chaos. The footage they capture saves countless drivers from unwarranted financial burdens and ensures the truth prevails. The presence of dashcams promotes a transparent and accountable road environment and even prevent accidents.

Imagine a world where insurance carriers can predict claims before they happen, personalize policies with laser-like precision and reduce fraud with pinpoint accuracy. Sound like science fiction? It's not — it's the power of artificial intelligence at work.

In a rapidly changing insurance landscape, traditional methods are struggling to keep up with growing complexities like increasing fraud risks, evolving customer demands and regulatory challenges. Insurance carriers are now at a crossroads — either embrace the potential of AI or put the business at risk.

AI is no longer just a buzzword; it's the backbone of smarter, faster and more controlled operations. From claims processing to customer service, AI helps insurance carriers optimize their operations like never before. But how can AI truly unlock the doors for unmatched operational performance for insurers? Let's dive into the AI-driven future and discover how it's reshaping the way insurance carriers operate today.

Statistics related to the impact of AI implementation in the insurance industry:

• Four out of 10 insurance providers use a form of machine learning
• 74% of consumers say they would be happy to get insurance advice online
• 80% of insurers believe AI will transform how they seek information

How Insurance Carriers Can Prepare for Accelerating Changes

As the industry evolves, AI, hyper-automation and data ecosystems are propelling insurers into uncharted territory. No one can predict exactly what insurance will look like by 2030, but one thing is for sure: Carriers that adapt today will have a maximum survival rate.

Embracing the "Known Unknown" of AI

Artificial intelligence is evolving at breakneck speed. Despite the complexities, insurance carriers are embracing it with enthusiasm. According to the KPMG Global Tech Report 2023, 52% of insurers identified AI — specifically machine learning and generative AI — as the key technology to help them achieve their goals over the next three years.

It's no surprise that confidence in AI is growing and integrating with existing systems, too. The 2023 Insurance CEO Outlook from KPMG found that 58% of insurance CEOs feel optimistic about AI delivering strong returns on investment within five years.

Leveraging AI's Abundant Use Cases

Why is AI adoption accelerating at this speed? The answer lies in its practical, wide-ranging uses. From automating back-office processes like claims handling to enhancing fraud detection and improving customer interactions, AI is making its mark across the board. Many of these functions still involve humans in the loop, but the potential for full automation is on the horizon.

As Ilanit Adesman-Navon, head of insurance and fintech at KPMG in Israel, explains, "AI goes beyond simply prompting agents with answers. It can be trained to understand customer sentiment, empathize and offer personalized solutions in real time — transforming customer interactions into seamless, data-driven experiences."

Carriers that recognize and act on the power of AI today are setting themselves up to navigate the accelerating changes of tomorrow with greater efficiency and control.

AI Uses in Insurance and the Overall Impact

• AI-Enhanced Underwriting: AI algorithms analyze vast amounts of data from external sources (e.g., social media, wearables, IoT devices) to provide deeper insights into customer risk profiles. For instance, Swiss Re uses AI for detailed life insurance risk assessments, streamlining the underwriting process and enabling faster decision-making. This leads to more precise underwriting, particularly in personal lines where customer preferences and behaviors can be analyzed in real time.
• Fraud Prevention and Detection: AI-powered fraud detection systems use machine learning models to identify patterns and anomalies in claims data. Allstate, one of America's largest insurance firms, uses AI tools to scrutinize claims that have irregular patterns, identifying fraudulent claims and reducing fraud-related losses. Additionally, AI systems predict the likely cost of claims and assist in triaging them based on severity, allowing insurers to prioritize cases that require immediate attention.
• Predictive Reserving and Triage: These models help adjust reserves and triage claims efficiently. For example, Lemonade's AI, named Jim, reviews claims and cross-references policy details to settle claims. It takes a few seconds, significantly reducing the timeframe of claims process for customers.
• AI-Powered Chatbots and Virtual Assistants: Insurers leverage AI-driven chatbots to improve customer interactions. Geico's virtual assistant, Kate, is a mobile, AI-enabled chatbot that assists customers with policy questions and updates anytime, providing quick, accurate responses that enhance customer satisfaction while reducing the workload on human agents.
• Next Best Offer (NBO): AI systems analyze customer interactions and behavior to provide real-time, personalized product recommendations. By understanding customer sentiment, these tools enhance the agent's ability to cross-sell or upsell insurance products effectively.
• IoT and Wearable Integration: In commercial lines, AI processes data from IoT devices (e.g., sensors in vehicles or factories) to predict equipment failure and reduce risks. This risk management approach helps both insurers and clients to minimize claims through timely interventions.
• AI-Driven Catastrophe Modeling: AI overpowers traditional catastrophe models by incorporating real-time weather data, satellite imagery and historical claims information. This allows insurers to predict the impact of natural disasters more accurately, improving risk assessment and disaster response strategies.
• Automated Renewal Processing: AI systems analyze historical data to predict which policies are likely to renew and which are at risk of churn. Insurers can reach out to customers with personalized offers or adjustments to increase retention rates.

To stay ahead of technology trends, carriers can leverage insurance solutions. These services offer specialized expertise in automating repetitive tasks, such as data entry, documentation processing and customer inquiries.

Firms offering these services integrate advanced AI technologies, including natural language processing and machine learning algorithms. Insurance service providers can efficiently handle vast amounts of unstructured data, extracting key insights and streamlining routine workflows. This reduces the administrative burden on insurance staff, enhances operational efficiency and allows carriers to focus on more complex, value-added tasks.

Embracing Modern Technology Imperative for Carriers

Today, implementing modern technologies is not just a choice — it's a necessity for insurance companies aiming to thrive. Among these innovations, artificial intelligence stands out as a transformative force, with many sectors still beginning to tap into its vast potential.

To gain a competitive edge, being an early adopter of AI can set you apart from the competition. The digitalization of the insurance sector promises immense benefits for all. Insurers can streamline operations and reduce costs, while customers can access tailored services and better offers that meet their unique needs.