InsurTech 2024: A Year in Review & Predictions for 2025

James BenhamHowdy, folks. Welcome to a special year end episode of the InsurTech Geek podcast. Today, we're reflecting on an incredible year for the InsurTech community, InsurTech Geek, and all things insurance 2024 was packed with innovation, new ideas, and transformative technologies that are shaping the future of insurance. We'll dive into the biggest breakthroughs, the challenges we've seen evolve, and what lies ahead as we step into 2025. The InsurTech Geek podcast is all about technology that's transforming and disrupting the insurance world. We'll be interviewing guests and doing deep dives into specific tech we see changing the industry.

We're taking you on a journey through insurance tech, so enjoy the ride and geek out. Terra, this week's episode sponsor, is revolutionizing the world of workers' compensation claims and policy management. Terra's cutting edge platform empowers insurers with comprehensive benchmarking tools, robust management systems, and an integrated ancillary services marketplace. Discover how Terra is driving innovation and efficiency in workers' comp at terra.insure. That's terra.insure. I'm your host, James Benham, your InsurTech Geek, and joined by my cohost, the most interesting man in insurance, Rob Galbraith.

Rob GalbraithRob, how are you doing today? Doing well, James, man. It's, I cannot believe we're here at the end of, 2024, so I'm excited to be here. We're eager to do another year end recap episode. This is definitely one of my favorite ones to record throughout the year, and it's been a remarkable year for SureTech, so I I can't wait to dive into everything we've learned. It has. It's been a a fast paced year. It does feel like the year

James Benhamstarted yesterday. I guess every year feels like it accelerates a little bit faster. That's what my parents always told me. As you get older, the the days are long, but the years are short, and they they appear to be shorter every year. But it is Christmas time, New Year's time, holiday time, whatever you wanna call it. It is the it is the time to the denouement of the year, the unwinding, the the wrap up. And it's been a it's been a busy one. I I thought we'd start out by first, I just wanted to say it was a busy year and definitely insurance and InsurTech is back to a full event schedule.

2020 got canceled in March and then 2021 was pretty much dormant completely. There was very, very little going on. And, '22, I'd say we were at half speed. '23 was was about full speed. '24, this this felt like warp speed from a just the the number of events, the frequency of events, the scope scale. It's definitely back to where it felt like in 2019. You know, I I I did hit the road a lot this year, and I thought I would just recap some of the more interesting events that happened.

I got to go and and hang out with Insurtech New York, and we're seeing that Insurtech franchise, Robin, I know you've hung out with someone that's really kinda started it. I think Insurtech Hartford was kind of the the mothership, and and and I'm I'm sorry for not knowing all the history of of the the organization, but certainly met a lot of the great key players there. But it's expanded and expanded and expanded, and they've, in fact, this this past this week Insurtech Tampa kicked off this week.

And it's, you know, the the latest in a string of these InsurTech franchise organizations, probably the wrong word to you franchise, but just locations of the InsurTech organization.

Rob GalbraithSo that's that was really cool. I got to go to InsurTech New York. Rob, you've you've been to some InsurTech events before. Right? Yeah. I haven't. And, no, I actually like the idea of franchise because I I think, you're right, some of these have have have occurred organically, right, over the years. But there were definitely parts where some communities were thriving more than others. And so just trying to figure out how do we stand this up? If it's not happening just organically within that community, well, what are some organizations?

What are some resources? How can we kind of get this going? And sometimes you just need a little nudge or a little guidance or that little push. And so having people that have successfully done it elsewhere, working with people in that local community to figure out how to tailor it to their needs, but yet use the best practices that they've developed. So yeah, you're right. Like that's a big part to me was being able to kind of see more and more communities have that in person networking.

I know it's 2024, like you said, but it's like, okay, it's not just all Zoom calls and we're all dialed into, you know, webinars from various companies. Right? But having these kind of meetups, having speakers come in, having events, having expos and stuff like that. Yes, of course, there's the national conferences, but not everybody can get to that or or, you know, has the potential means or the family situation or what have you. Right? So, you know, having that community locally and folks that you can just kinda meet up with, bounce ideas off of, I think it's fabulous.

So to see that deployed in more communities, definitely exciting.

James BenhamYeah. Exactly. And and, you know, these are these are really, like, local organizations that that have, you know, regular scheduled meetings, and I think it's really great to see that there. Insurtech Hartford is part of the global Insurtech Alliance, which actually has these Insurtech associations from all over the world. I think also what you're seeing is have the big for profit event companies, a lot of them out of London, that are running big insurance technology and innovation events, like InsurTech Insights. You've got some of those type organizations that are out running it.

That's all they do. Those organizations are event businesses. They have multiple industry verticals. They run events in. Have great events. It's a it's a lot of fun. And then you have ITC, which this year was was a monster. It was massive. It was just a absolute massive event. And then then you have this this proliferation of Insurtech associations where it's it's, you know, local and national organizations are pulled get together on a regular basis. And that's really where you see a lot of like regular collaboration and networking when you can be part of a chapter and then go there regularly and have speeches.

It's it's really neat to see the industry evolve. When an industry evolves, you definitely see associations evolve and then coalesce and then form alliances. And then, you know, they they group together. There's almost this natural inertia that happens. So definitely saw that a good bit this year. I got to go and also start getting involved in, like, some some state level events like Insurance Council of Texas. And of course, I had no idea how it's no surprise how big the Texas insurance market is, eight eighty insurers just in Texas.

I mean, it's a big big state. You got to go to ask if for the first time state comp insurance funds. I got to, you know, speak at WCI, work comp insurance. Of course, lot of my stuff is comp related but also property. And then, you know, national comp, ITC Vegas, Army was a construction risk. I mean, there's a lot of really good, conferences I got to go and participate and and check out and and have a lot of fun with. The State Insurance Trade Association, that was another really good one, CETA.

So there's a lot of these really good organizations that exist that that exist to to support and buttress the insurance and insurance innovation and technology community. And I'd say this year was a bumper year for them on events and attendance. So that was really good to see that people just want they wanna network. They wanna be face to face as much as online is proliferating and work from anywhere is still persisting even though we're definitely seeing some return to work, return to the office going on.

So on events, that was something to look at and something to be excited about in 2025 that we're going to have a robust set of events. Over the past year, Rob, we've encountered some fascinating innovations and inspiring individuals as well. What what did you and a lot of them came on the show. Right? We had, I don't know, 25, 26 episodes this last year. What do you think was, like, the single most disruptive advancement in InsurTech this year?

Rob GalbraithYeah. I'm I'm fascinated to hear your answer, James. As a technologist, that's definitely more into the day to day, like, impact. I mean, you're building technology. You're leveraging technology. You know, you're seeing new advancements. Obviously, we've talked about, you know, chat, GPT, and and various kind of, you know, offshoots and and perilous. But, you know, to me, I I may be ahead of the curve here, but I'm gonna say computer vision. And, you know, we recently recorded an episode with Josh Butler from Comp Science. And I say that just because, you know, in the past, this is something that we've theorized, talked about.

Specifically, I certainly remember kind of, you know, in my time in the work hump space talking about, well, yes, you can have, say, ergo people, right, show up and they observe people and they kinda give you a list of things to do, but you just never know. Right? The act of being observed. Like, those workers actually, you know, bending at the knees when they're lifting stuff or whatever rather than bending over at the the the ways that they shouldn't be. And and I I just worried about kind of stuff like that.

Hey, you're coming on this day, but is this a typical day? Have they been coached ahead of time or whatever, right? And so that ability to say, no, no, no, we're going to use like security cameras that you've already got in, we're observing everything, we can see slip trips and falls, we can see behavior and we can analyze it. Again, like, you know, you can't if if you're a safety manager, right, you might say, hey, we had an incident. I need to go back and look at the video and you can do that.

But like nobody's looking at those, you know, security tapes twenty four seven three sixty five, right? Especially all the stuff that didn't happen before. You there's know, things like wearables and other stuff, but I don't know. I just think there's so much that you can do with it, but it it obviously takes a lot of data, a lot of training, you know, robustness of, you know, just the competing horsepower, being able to train AI models, etcetera. And I just feel like now we've hit that tipping point here in 2024 where we're actually starting to see the fruits of the labors.

I know a few years ago, he was kind of interested in exploring some pilots on that. And honestly, was like, I had go to the university, you know, folks that were kind of doing it as like research, r and d, like it was just a little bit ahead of its time. Mean, people were working in it obviously, but just in terms of being something that was being actively used and beneficial to businesses and we're starting to see that. So to me, that's exciting. It hasn't been deployed to my knowledge, like kind of at scale, but we are seeing companies built around it.

We are seeing companies integrated. And so that to me is the biggest game changer, I think, over the next decade. So I'm thinking about something that happened this year that's gonna have, you know, ripple effects, right, for a decade or more to come. That would be the one that I pick. So what about you? If you had to pick one development, James, from 2024 that had the greatest impact, what do you think it would be? And then do you think that would kind of carry on, as I I mentioned, to 2025 and beyond?

Yeah. I think as far as impacting average everyday workers and insurance, you know, one one tool

James Benhamthat permeated, you know, insurance professionals, underwriters, claims adjusters, business development executives definitively chat GBT. Like, it wasn't even on people's desktops a year and a half ago, and now it's replaced Google. And I I never thought anything would replace Google, but I don't even I barely use Google anymore. And and it it really, really took took the world by storm. Just to give you an idea but I have I have a few elements of this that wanna cover because it's not just that it's that one app where you can just talk to something.

It does it's way more advanced than that. For example, this week alone, ChatGPT released the ability to process real time video, which means it turns the camera on and it can tell you everything it's seeing while the camera is streaming video to the app, which is crazy. When you think about people with disabilities and what that means for them, it's huge. But also back to processing real time video streams and then looking at what's going on in those video streams, it's incredible. Now mind you, there have been models that do this for quite some time wrapped around safety systems and loss prevention systems that have been able to stream cameras off of industrial sites and construction sites and then analyze them in real time.

But now ChatGPT is available making available to everybody with the camera on their phone, which is bananas. Just to give you a a crazy just a crazy stats on how how long it took Netflix three and a half years to reach a million users. It took Airbnb two and a half years. It took Facebook ten months. It took Spotify five months. It took ChatGPT five days to reach a million users. And when you look at their usage over time, they had 1,000,000 users December 2022. So really, not a lot of people were using it two years ago, this month.

By February '23, it had a 100,000,000 users, two months to a 100,000,000, which is the fastest any tool in human history has reached a 100,000,000 ever in the history of humans. And then you go to today, by October, estimates are that it had a quarter of a billion users to two fifty million users by October 2024. So this has permeated everybody's What this changes is their expectations of what software and computing can do. Because now they have this extremely powerful multi tool that can help them with a lot of different tasks, and then they go back to their enterprise software, they're like, Oh my gosh, there's so much I can't do compared to what I can do in my personal life with ChatGPT.

So that's why it creates those expectations. Certainly, a lot of us in the software space, because I run just under a 300 person software organization, we do professional services, custom development and integrations and customization and data services for insurance. We also have a SaaS product for policy and claims. I can tell you, we started incorporating AI into a whole bunch of areas, intelligent document processing, you get into text summarization and note summarization. We started incorporating it into a few different areas of the application. But then also, for those of us who like to build and deploy technology, one of the things Chad to BT is the best at is writing code.

So you can dramatically accelerate your code writing process and your application deployment process. You still need coders because an engineer still has to assemble all this and pull it all together. But instead of hand typing every sentence, every I say sentence, every line of code, now you have code completion tool and of course, can just generate the entire code segment. That's a big, big, big, big, big deal in product engineering and the ability to deploy applications quickly. So I think that and it's not just ChatDBT.

Mean, I use Anthropic, which is Cloud AI. It does an amazing job at writing code. It also does an amazing job at language translation, by the way. Super good. So there's a we are approaching the universal translator from Star Trek. Essentially, have it right now. There are AI enabled large language model enabled to hear pieces that will translate in real time. I've got the new meta, I don't have them with me right now, but I've got the new meta AI glasses that are incredible. You know, you have a large language model on your face.

It's like, oh my gosh. It's so cool. And it can take pictures. It can tell me what's going on. I can I can look at what I'm looking at and identify everything in my line of sight? I mean, it's you know, it takes photos and videos. That's that's like the table stakes for what it can do. So that was a really, really, really big deal. And certainly, this was the year I started to see machine learning models and large language models being incorporated directly into enterprise software for insurance.

I thought that was a really big year as it gets out of the lab. We're not just talking about it anymore. We're using it and certainly computer vision because it's also the year of multi model, right, where you're actually pulling the other multiple AI models. So it can do computer vision, speech to text, text to speech, It can do text generation, text analysis, sentiment analysis. All of those things are different models that are coming together and being synthesized into a multi model experience for the user.

And and this was the year of that actually being pushed to production, not not just being stuck. Because for so long in speeches and podcasts, we've talked about what's coming, and now it's now it's, like, definitively here in production scale releases.

Rob GalbraithYeah. It's mainstream. Right? Like, that's the exciting part. I think about this is the the time, right, to go back, like, in the eighties when everyone finally has their own desktop PC. Right? Right? Rather than a dumb terminal and stuff. So it just yeah. I mean, it it's it's it's here. It's now. It's actively being used. I think about stuff like RPA, right, or what you're excited about a couple years ago. It just feels like kids play now. Right? Like, that's just It is what I mean.

You know, RPA RPA is in for a big shake up. You know? You have you have Blue Prism. You've got UiPath.

James BenhamWell, Anthropic has computer mode where it takes over your computer and actually runs it for you, which is the definition of RPA. And it learns and it's adaptive. So now you have these general multi tools that are actually taking over segments of software that used to be their own dedicated product category. RPA is a phenomenal tool for insurance companies. We're seeing widespread adoption of RPA across all of our insurance clients because it allows you to automate boring, menial tasks like downloading files, modifying them, and uploading them.

You know, there's also a whole proliferation of low code platforms. I I still I think there are some that are being used really well. The jury's still out on some other ones, because often you still end up having coders doing the doing the low code work because there's, you know, engineering and assembly work, and it's often cases can be a little too technical. But it is allowing you to build applications and deploy them faster with less technical resources. I'll say less, not zero. That's been really interesting too.

We've also had no shortage of discussions about the challenges facing in the industry. Of course, we had you know, some really hard markets in some areas. Well, some really soft markets, you know, hard markets like personal property continued to be really challenging and soft markets like work comp continue to see, you know, both both, you know, severity and frequency come down and rates continue to soften. Cyber. I was on a call this morning. Cyber is even softening. That market hardened up big time, and it's actually rates are kind of coming down there.

Evidently, it got a little fat. So now it's coming back. So Rob, from everything we talked about this year, what would you say the most persistent obstacle insurance companies and Insurtech companies are facing? And are there specific tools or strategies that can help address the challenges moving forward? Yeah. I I still think the pace of technological

Rob Galbraithchange is outstripping our ability to effectively incorporate it. Right? And and so for insurance companies, I've talked about this with, you know, different clients, it's like build versus buy to me isn't a thing anymore. It's definitely buy. Right? But it's like who not just do I purchase like, but who do I partner with? Right? You know, that that relationship that you're gonna have, whether it's with JBKnowledge or somebody else, like, you know, you gotta think long term. So you're not just buying, right, like one single system or product or capability, whatever, but you're kind of embarking like, how is that gonna evolve over time?

You know, what is their plan for incorporating the latest in technological innovation? So, you know, if I was asking you and I was considering, you know, JV Knowledge as a partner, like, these are questions I'd be asking. So hearing those kind of responses, like, those would be, you know, checking the the yes boxes for me. But I I think we actually talked to a lot of people over the years that wasn't just straight from a tech standpoint, right, but this kind of challenge of, like, how do I build an innovative cult culture of innovation?

How do I incorporate? How do I change management, transformation, etcetera? So I would point, you know, listeners or viewers, you know, episode one twenty nine early in the year with David Mokla from MSIG North America. He definitely talked about kinda leading transformation. Episode one thirty was with Brian Gabe from, you know, CSAA, and and he talked about kind of, you know I mean, they've been pioneers kind of in leading innovation efforts from within a carrier, so fantastic episode. We talked to, you know, Albert Betts. You know, you talked about, the insurance council of Texas, right, and talked about, you know, all the stuff that they're doing, right, for all of their members.

So he gets to see both sides of kind of both InsurTech startups. We talked about with Hanno Meyer episode one thirty six. He's been an InsurTech advisor over in Europe with a lot of different companies. So, there's more out there. You guys can definitely check him out, but that's been kind of a common theme. We've had people that are either advisors that are working in InsurTech communities like Kobe Bendelek of InsurTech Israel. We've talked from people working within the carriers themselves, right, just about how they do it.

And so I think there's a lot about best practices that you guys can gain. I'm not gonna rehash everything they said here, but I just felt like we had more of those conversations this year, James, than we never really had in the past where we talked, you know, more, I think, in the past with just a pure start ups, like, what's the tech? What's coming down the road, etcetera? I think that was really valuable, and we're still definitely having some of those conversations. But, I think, you know, if you're somebody that's working within the space, you know, the the some of those like, well, how do I put all this together?

And then definitely even from an in sure tech startup state space, right, hearing from that side of it, think is very valuable as you try to differentiate yourself, your company, your product. I would say that the larger firms and more traditional firms, like, they're they're they now have different processes, right, to kind of, scout startups, to work with startups. It's not a one size fits all the way. It used to be kind of an, you know, old procurement models. So that's the good news. The bad news is I think there's only so many of these they can handle.

I don't know if it's a half dozen or whatever. Right? But like, you're just fighting for shelf space, right? Time, attention, etcetera. It's very, very competitive. There's obviously hundreds, if not thousands of startups out there. So how do you differentiate yourself in the marketplace? I think is, you know, definitely some some takeaways in our episodes this year as well.

James BenhamYeah. And I and I'm I think this year, we've seen tech first, tech enabled. Do you want to call them real deal? Insurtechs, like, actually insurance companies who are tech companies. We've seen them really write some premium, like real premium numbers coming through these Insurtechs, Real numbers, real data. I think that's exciting too because you end up saying, Okay, this is for real now. They're writing paper on really big companies' paper. In some cases, they're producing materially different results on loss ratios. And that's really what we've been looking for, Rob?

It's like, where's the the proof in the pudding when does tech really work? Like, does it does tech really work to to drive down losses, to improve pricing, to improve risk selection? We had an interview two years ago. We've had quite a few around this space, but we we had one two years ago with a cyber MGA that really kind of hit its stride this year, and I think you'll be seeing them back on the show, coming up AlphaSecure, Gordon Mallon. That was from May 2022.

Hopefully, we'll get Gordon back on to get an update. But you have companies like his that have radically changed customer expectations of what you should get from a tech stack along with your cyber insurance. And it's radically changed the losses they're experiencing and the risk that they have exposed. You can look at some other companies. I referred a friend of mine the other day to two of these companies that really are in the industrial space that have, again, combined software and technology offerings with an MGA.

And it's exciting to see what they've been able to do both with pricing, rates, underwriting, and then, of course, loss prevention by really having a really, really good offering. One of them is a good friend of mine, Chad Hollingsworth at Insight Risk. He's up there in in Connecticut, they've done a, you know, really neat combination of of of technology and insurance to be an MGA and provide provide insurance. Another one is Peter Grant, who started SafeSite, which is all about construction and industrial job site safety.

And they ended up building an MGA foresight commercial insurance, where you use their safety technology and then you can get your coverage. So there's a bunch of examples of these where now they're not in the lab anymore, they're not in early launch phase, they're not pre premium. They're writing real GPW numbers, and it's like, okay. This is this is this is for real. And then you're able to see that they've been in business long enough this year now that you're seeing, you know, loss ratios really paying out.

And I'm I'm really excited about that. Yeah. No. It's it's legit. Right? Like, you're in the tens of millions and not 100 hundreds of millions of premium, and they're paying claims. Right? And you're getting loss ratios. And, you know, we talked

Rob Galbraithprobably, you know, a year or two ago in the summary episode just about the challenges in the marketplace, right, and and that shift, you know, there was some challenging with, like, VC funding because a big part was, you know, that focus on profitability, right, and it kinda turned when the market shifted around COVID, interest rates got higher, etcetera, etcetera. Well, to your point, now these companies are proving, right, no. No. No. Like, this is sustainable. This is a profitable model, and they're just, you know, ready to scale at this point.

So it is exciting. So James, I wanna ask you because you've been traveling. I mean, you've you've talked a ton on our podcast, but I know you've been traveling. You've given a lot of talks at at many of the conferences you kinda mentioned about the role of technology, particularly AI, right? So where did things stand? I mean, it's definitely mainstream as we've kind of talked about, but like what are you looking for that's going to happen in like 2025? Is it just like more of the same or do you think there's still kind of, you know, leaps and browns and leaps and bounds in terms of kind of, you know, exploring new functionality and leveraging it in many myriad different ways?

James BenhamYeah. I mean, we're in the infancy of this really as far as real adoption of using AI for building code, writing code, incorporating in code, deployment into production environments. We're we're still I mean, we're we're still in the in the in the baby infancy phase. So I'm I'm looking for a a broader set of technologies to leave the lab and enter production this year. Right? I think that's really going to happen. I'm seeing it happening in my client base, and I'm and it's not just it's not just AI.

It's it's workflow automation software. It's it's API implementation. It's it's easier to build and scale and deploy APIs now too, by the way. AI has enabled a lot of that to happen. So a lot of the things that we've been talking about and wanting, which, you know, APIs in front of insurance data, like in front of policy data and claims data allows us to connect and interconnect other applications together, get more secure as an industry, and then streamline the movement of information around organizations. And a lot of that's enabled by, you know, more AI tools.

And so I I actually think you're just gonna continue to see a logarithmic, not linear, but like a, you know, hockey stick curve of adoption of technology. For those that are are really willing to to step out of their comfort zone on on what on how on how they've always on how they've always done things. I'm seeing the the other the other interesting thing I'm seeing in the in the production environment out there is that even the the long time legacy mainstay, large scale ERP providers are forcing their clients to move to cloud computing.

And you're really like a forced move off of on premise. And, you know, you're you're seeing this in the big three, out there that are that are really pushing people to get their policy and claim system into their cloud computing platforms. And so that that's a that's a big deal because you're you're looking at a real sea change in a lot of insurance organizations around hosting and managing their own data centers and their own, I mean, their own servers and everything else, that's a that's a big deal for them.

But it also enables you to leverage a whole bunch of cloud based computing resources once you do it. Like, once you're in Azure, then leveraging Azure Cognitive Services is a lot easier if all of your databases are there and all your files are there. So it it's it's just this beautiful confluence of events. The other thing that that's you know, and I've gotta mention it because this was a huge freaking year for Elon Musk, and we are not talking about politics. K? We're not talking about politics.

We're gonna stay away from the election, and I wanna talk about it. Not not because I not positively or negatively. I'm actually very political in my personal life because I I'm a I've been, like, elected official in a in a in a now I'm currently a governor's appointee. I wanna stay out of that. I wanna talk about the fact that they've launched thousands of satellites into space. And Starlink is going to radically change a lot in insurance. I can't even describe how important Starlink is to broad scale deployment of IoT networks, of device networks, of data collection, all the things that are going to help us with loss control and loss prevention and diagnosis and triage of a claim after it happens.

I mean, there is a lot that that kind of global scale connectivity. I have two satellite dishes already. Just personally, I have a you know, the the big one that you can stick on top of a car RV. I've got a small in the Rome that, by the way, works as well almost anywhere. And I've got access to ultra high speed broadband, but they if you look at their commercial offering, they're about to they're about to roll out their direct to cell technology. He's already tested it.

It's already working. They're about to roll it out with T Mobile in The United States as their launch partner in 2025. Wow. This level of satellite based technology of direct yeah. And by the way, it's not just text. It's data. It's voice. It it Starlink is going to be the the largest telecom company on the planet. You you will be able to make calls over it, text, data, video streaming, gaming, all it's a comprehensive technology stack, but they also have a commercial offering for telematics and for IoT device networks, which you and I both know is massive for auto insurance, home insurance, commercial property, work comp, all of them.

So there's some crazy stuff all coming together at the same time. And it's important to not forget that. And on device computing capacity is going through the roof. The new m four chipsets by Apple, I've got them, and they are unreal. The new iPhone 16, of course, has AI built in. They just did the the 16.2 release, or eighteen point two release on iOS, which has a whole bunch of new, AI functionality. And I'm I'm actually logging in to check. Oh, yeah. And tonight's my update for 18.2.

18.2 brings a whole bunch of integrated large language model support into phones. So I'm not trying to get too off topic here, Rob, but like, these things have big time consequences when you're pushing these legacy enterprise ERPs for insurance into the cloud, and at the same time, you're offering a lot more cloud, you know, AI and cognitive services. And at the same time, you're rolling broad scale connectivity around the planet. And it's like, oh my gosh. The other you know? Well, well, we can talk about I have I have another topic for for next.

But when you bring it all together, it makes for something really, really amazing. This year, another big theme has been collaboration. And we've seen more partnerships between traditional insurers and InsurTech startups than ever. We're seeing a bunch of InsurTech MGAs get paper for some huge mainline companies that are stepping in big time, like serious capacity. They're giving them power of pen over. And also InsurTechs, like like, we you we're an InsurTech that provide tooling, and and they're getting play at some major, major, major companies. Do you think this trend is gonna continue into 2025, and how do you see it evolving?

Rob GalbraithI do, James. I mean, I think the big question and, you almost touched on it a little bit with kind of, like, what is what's coming down the pike. Right? Because I think what happens is and I talked about this in, my book, The End of Insurance as We Know It, and and, you McKinsey had even done a study, right? This is years ago, but they kind of asked like, you a startup? Are you looking to disrupt the industry? Are you looking to kind of push the industry forward or kind of make things more efficient within the industry essentially, right?

And there was 9%, only 9% said, as a start up said, were looking to actually disrupt the industry. And, you know, lemonade's one where we kind of talk about is kind of, I think it's the most, you know, airtime. There's certainly a few others out there, but I I I think those companies, even if they themselves don't become the market leaders, whatever, like, they can create enough of a competitive you know, threat may be too strong, nudge. Right? The the FOMO. I mean, I know State Farm, if you remember this, James, like, two, three years ago, they had made kind of a a robot weird ad that was kind of, like, you know, making fun of lemonade or whatever.

And people were like, you're State Farm. Like, what? It's a small like, why are you like, you're making them actually seem more of a threat by actually creating an ad, right, kinda targeted when most people have ever heard of them yet that aren't in the the insurance space or whatnot. So, you know, that's where I really look of, like, I don't know that there's that next lemonade out there yet. I definitely feel like in, you know, niche markets. Right? Whether it's like, you know, we talked to Jan Marbaro from Autonomy, right, and supply chain management, or we talk about, you know, high hazard work comp and stuff like that.

Like, there's definitely MGAs for a lot of niche areas that I think the primary market wasn't serving well. Like you said, they're even enabling it, providing the paper, but they're willing to let everybody else kinda, like, you know, take it and run with it. And no none of one even though it's, you know, tens of millions of dollars in premium, like, at the end of the day in a 5,000,000,000,000 plus global industry, right, it it it's not enough to really move the needle. So, like, you know, you look at the top 10 carriers in The US, and this is probably true in many other developed countries as well.

Right? It's like those countries have those companies have been around for decades, and you just see more dynamism in other markets where the top 10 in that marketplace change over time. And, you know, this is probably a poor analogy, but I think of, like, you know, Sears Roebuck. Right? Then Walmart takes over. Then Amazon takes over. So even, you know, if you have twenty, thirty year cycles, right, this gonna kinda happen. We haven't really seen that in the insurance industry, and I don't know that that kind of exists yet.

So, yes, we've definitely seen, you know, a lot more collaboration. I think this is my personal opinion that the insurance industry still needs that nudge. You know? They still need that perceived threat from outside. There's always people worried about what if Amazon gets an insurance? What if Google gets an insurance? Right? I mean, we've kind of heard this. We've had these freak out conversations probably over the years. Hasn't happened yet. Right? Lots of regulatory reasons and all that, but

James Benhamwill it ever. Right? And so Capital too. I mean, capital reasons. I mean, it's it's it's it's not just it's not just regulatory. I mean, there's some practical to raising that much money to Absolutely.

Rob GalbraithAbsolutely. Right? But but will one of these hit? Will one of these be you know? Yeah. I think a progressive, right, kind of, you know, hey. They were kind of this niche nonstandard auto carrier, and, obviously, they become, you know, top top 10 rider of of personal lines over time. Right? They've really kind of grown and expanded from that niche kind of company, right, to kinda mainstream top 10. You see their ads everywhere type company. So, yeah, just kind of curious. Like, I don't think that's necessarily gonna happen in 2025 or beyond, but, you know, who knows?

And it is funny when, there is that perceived kind of competitive threat out there, right, how quickly people kind of respond. I think about too, like, James, you know, we haven't talked about blockchain in a long time. We haven't really talked about, you know, Bitcoin or crypto or whatever, but there are people like It was a big year for crypto, man. But but But, I mean, after the crypto winter, you know, with with Bitcoin at a $100, I mean, oh my goodness. Big year. I I I just wonder, you know, is there this decentralized finance, right, kind of community, and is there something in the insurance offering on that side of the house that could disrupt things?

So, anyway, just something to kinda throw on on people's radar. I don't think that this is anything imminent, but, yeah. I mean, I think collaboration will continue. I think it will get deeper. I think companies have actually gotten a lot better about collaborating. You might differ because I know you're talking to a lot of these companies out there. Right? But I think to your point about linear versus logarithmic, I still think that improvement in the industry is linear. And so that's where I think there's an opportunity.

I'm just kinda thinking looking ahead, James, for you, how do you see the global insurance industry changing the next year? And if you have a bold prediction of how you think InsurTech is gonna evolve by the 2025.

James BenhamWell, I think that you're gonna see a a new slate of entrance into the InsurTech market. Funding is finally loosening up because, it's it's going 2025 is going to be a big year for deals. Just in general, you're gonna see you're going to see exits. You're going to see fund rate. You're gonna see a lot more round raise announcements. I'm a limited partner in a few VC funds, and I can tell you the funds I'm in are going to be doing deals this year. They're going to be investing, they're going to be deploying capital, and they're also going to be pushing exits because it's time for exits.

So that's going to change the landscape. Look, and you're already seeing, you have some monster merger activity going on in the broader insurance space. I mean, need we discuss Arthur J. Gallagher buying Assured Partners for 13,000,000,012 billion dollars acquisition of Assured Partners by AJ Gallagher, which so you're so you're gonna continue to see, and you've seen the big brokerages continue to roll up and roll up and roll up. And then even in the in the in the insurance space, you said that I agree there there does need to be some more pushing because what you're seeing is that now because so many have moved into being MGAs, the same paper is behind everybody.

Like, you like, you really roll it back to the companies that own the companies that are writing it, like, because you have the investment companies that own the insurance companies that are writing this. You actually have a small number of players deploying capital through these licensed carriers and through to the MGAs. And so there's we're probably missing the large scale disruption a lot of people called for. They called for, you know, brokers to be completely disrupted. That totally didn't happen. In fact On top of that.

Yeah. Totally. That totally didn't happen at all. I I didn't call for that just because I know how valuable my broker is to me, and I I was like, there's no way I'm gonna rid my broker. Like, there's no way. There's no way on the commercial side of the show. GBT now. You don't need a broker. Right? Yeah. The because it would totally get it right. I mean, come on. Right? Exactly. And I I I agree with you completely. Yeah. So it it it's very interesting to see the the deal making and the deal volume that's going on.

And that's a different type of collaboration. And I and I but I think I think this this coming year is gonna be big for for for actual investment rounds and exits, which, again, will present some maybe some new threats to the status quo as money gets deployed. Certainly, lemonade posed a threat, and you can say until their combined ratio really materially changes, I'd say that threat's been more discounted and that's been reflected in its share price. Let me see where it is right now, but it was down 90% at one point.

And that's tough. You know? Mean, it's five year high. Now here we go. Yeah. So it it it it got a nice bump this year. It went from you know, it spent most of the year in, like, $18, and it's at, like, $49. But, of course, its peak was a $163. It's still down it's still down 75% from its peak. It was down 95%. So, you know, it's they've they've gotta they've gotta make some real changes and drive profit to the bottom line. And that that's the that's the other thing that I think the whole industry got a really solid reminder of is that in in insurance, unlike tech, you are expected to make money.

You know? You are. You are expected to make money.

Rob GalbraithWell, the other thing too, James, is, you know and I talk about this in the book. It it's like being a tech enabled, right, or tech forward insurance company to me isn't gonna get it done. Right? That might've got it done ten, twenty, thirty years ago, but that's not gonna get it done. Right? You really have to differentiate your your offering in a different way. And so, again, as we talked about, like, we've seen companies have success in in niche markets. We've seen companies have success when their product can be simplified in terms of digital distribution.

Right? And stuff like that. But like these are all kind of in the margins. They were probably quite frankly low hanging fruit from within the industry of where can you do it better. But it's the the companies that are so well established. It's not just, you know, 5¢ cheaper or whatever. Right? You're gonna have to make a material leap improvement in the minds of of of customers, right, over and above. And I also think, you know, we talked about this a little bit, but particularly, you know, a lot of our conversations over the years have been a work comp, which makes sense.

We both have kind of that work comp background. Right? But yet, the thing that I think we've touched on it here and there in some of those conversations, but it's like, you know, a lot of companies, their work comp is one of several different lines that they're gonna buy. So, right, if even if you're differentiated on your work comp product, how does that compare to the entire package, right, of needs of of that client? And sometimes, yes, people do. Right? They they have different companies hold different lines, but sometimes it's better to be like, hey, I just want everything with Travelers or whoever it is.

Or sometimes they'll say, hey, we won't give you our comp unless you bring in other lines as well. So there's that aspect of you know, how much difference can you make within one line versus that kind of fundamental, you know, all personal line offering or or all commercial lines or robust offering. So, yeah, that's where it's like, okay. We need something that's, like, a radical improvement. Just as you said, ChatGB is a radical improvement over Google. Right? It's like, what's that equivalent in the insurance space?

And I don't know that we've quite seen that yet outside of, right, some some areas here and there. Well, there you have it, folks. That's time for our episode. 2024 has been an extraordinary

James Benhamyear for Insurtech and the Insurtech geek podcast. Rob, thank you for joining me today and throughout the year. It has always been a pleasure

Rob Galbraithto, to go on this ride with you and to get to talk with you, every other week and have so many great conversations. And, you know, I really, really appreciate it. Yeah. Thanks, James. No. I I can't believe we've doing this. I don't know how many years now. Five or you can go to five years. So it's it's been amazing ride. I'm super grateful for the opportunity to share the conversations with you and our our listeners. And, yeah, I just continue to to be blown away, right, by the people that we talk to that are experts in their domain.

Right? Whatever it is. And and I feel like, you know, we just continue to speak to a wider variety of guests each and every year. And so I learned so much from from them in these conversations, and I hope that our our listeners and viewers do as well. That's great. And to our listeners,

James Benhammost importantly, and our viewers, because we have, actually, a lot of video viewers now on YouTube, on on Instagram, on Reels, I mean, on LinkedIn, especially. Thank you for tuning in, listening in, watching, and geeking out with us. If you enjoyed this episode, be sure to check out InsurTech Geek.com for more insights and episodes. Until next year, have a happy New Year. Enjoy the ride and keep geeking out. The InsurTech Geek podcast is all about technology that's transforming and disrupting the insurance world. I've been your host, James Benham.

That's jamesbenham.com with co host Rob Galbraith at endofinsurance.com. We're taking you on a journey through insurance tech. So enjoy the ride and geek out.