Artificial intelligence (AI) and machine learning is set to revolutionise the insurance industry, according to an exclusive survey of insurance technology specialists set to attend TINtech 2017 in June. The survey from The Insurance Network found that 40% of insurance technology specialists believe AI and machine learning will fundamentally affect their business, closely followed by 35% for the second-most revolutionary emerging technology, advanced analytics (although you could argue that this has already ‘emerged’, it’s interesting to see that analytics retains its perceived potential to disrupt, outscoring both Blockchain and robotic process automation).

1. Inside the InsurTech Revolution:
why insurance needs to up its game
01
TINtech 2017 report
Artificial intelligence (AI) and machine learning
is set to revolutionise the insurance industry,
according to an exclusive survey of insurance
technology specialists set to attend TINtech 2017
in June.
The survey from The Insurance Network found that
40% of insurance technology specialists believe
AI and machine learning will fundamentally affect
their business, closely followed by 35% for the
second-most revolutionary emerging technology,
advanced analytics (although you could argue
that this has already‘emerged’, it’s interesting to
see that analytics retains its perceived potential to
disrupt, outscoring both Blockchain and robotic
process automation).
Despite the much-touted disruptive potential of
connected devices and the Internet of Things,
only 12% of respondents said they thought this
technology was going to have a fundamental
impact on their business.
Overall, the survey respondents said they
expected these new technologies to have an
impact across many areas of insurance including
offering more personalised services to customers,
both personal and commercial, improved pricing
and enabling better back office operations.
Research from Accenture, meanwhile, has found
that personal lines is becoming the dominant area
for InsurTech activity, with 78% deals completed
in 2016 focusing on the personal lines sector,
compared to 72% in 2015 and just 60% in 2014.

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TINtech 2017 report
The biggest driver behind insurance companies
wanting to adopt these emerging technologies is
the ability to improve the customer experience,
with 40% of survey respondents highlighting
customer experience as their number one driver
for digital transformation, compared to 35% for
operational efficiency and just 25% for gaining a
competitive advantage.
“Short-term, there will be significant disruption
to broking and underwriting as technology
allows automation of much of the broking and
underwriting process,”they said.
Another survey respondent, however, said
adoption of all of these technologies could
be aided by a wholesale move to cloud-based
systems and SaaS business models.
“We need to get rid of the big mainframe systems
as they are too slow to enable change and
expensive to manage,”they said.“We need to
move to cloud-based systems and SaaS models to
allow an agile implementation that can respond
more effectively to adoption of new technological
innovations.”
40%highlight customer experience as
their number one driver for digital
transformation
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3. 03
TINtech 2017 report
Traditional Culture: a Barrier to Innovation
It seems that despite all the benefits technological
innovation can bring to the industry, the rate of
change today remains stubbornly slow.
The survey found that the biggest barrier to
further innovation in insurance was culture,
with 86% of survey respondents believing the
industry’s mindset was holding back the UK
insurance sector.
“The culture is still very traditional and the IT
department is not seen as a partner,”said one
survey respondent.“The financial processes and
governance are not fleet of foot and that slows
things down and does not support a culture of
innovation.
“Everything has to be a success and this mindset
stifles innovation.”
This lack of trust in the IT department was
highlighted by another respondent, who said that
the concept that the IT team could add value to a
business was“alien”to many in insurance.
“At a certain level, IT is regarded as a cost centre
with no real value other than making sure the
email is working,”they said.“The concept that IT
can fundamentally alter the way that business
value is delivered via data analytics etc. is a
concept that is alien to a certain demographic.”
Another respondent said that a complacency had
crept into the industry in recent years, and that
this, paired with a dip in the market, has reduced
the funds available for technological innovation.
“There is incredible inertia in the industry. There
is also massive - and misplaced – complacency,”
they said.“This has coincided with a point in the
market cycle where cost cutting is a focus for most
businesses, which means investment in innovation
is limited.
“There is also a generational problem where the
younger generation in insurance who can see the
changes that are coming don’t have enough of a
voice in the market.”
Another added:“The UK insurance market is
slow to innovate, reluctant to spend money
and therefore not able to take advantage of
technology innovations to drive lower margins in
their business.”
Show me the Money
A lack of funds was highlighted as an issue by
44% of survey respondents, while 30% said there
were too many options available to insurance
businesses, but not enough understanding of the
benefits and drawbacks.
44%believe it is lack of funds holding
back digital transformation in the UK
insurance sector
86%believe it is mindset that is holding
back digital transformation in the UK
insurance sector

4. 04
TINtech 2017 report
One respondent said:“There are a number of
‘solutions’available in the fintech market that
promise to solve the issues that legacy insurers
are facing, but these different options can be
confusing.
“There is not always the in-house expertise
to assess the solutions at face value, and
consequently insurers are often unwilling to
promise sums of money in order to utilise the
technology.”
A common thread running through responses to
the survey was the idea that senior management
was reluctant to see the benefits of future
innovations in technology for fear of losing sight
of today’s threats and challenges. Ultimately,
however, this leads to stagnation and an
unwillingness from the industry to move forward
as new technologies become available.
“Mindsets don’t really allow management to
understand that technology will start to have
a fundamental impact on business,”said one
respondent.“Heads are buried in today rather than
what could happen in the next five years.
“That, coupled with lack of money to invest for the
long-term, is impeding innovation.”
Another said:“There is always a tension between
focusing on today’s profit versus investing for an
uncertain tomorrow.”
It’s worrying that both cultural inertia and short
termism remain major obstacles to change
within the sector, and more so that perhaps a
‘generational issue’means that those with their
hands on the levers of change within the sector
tend to be of the generation that are both most
resistant to change, and most disinclined (and ill-
equipped) to perceive the value of that change.
However, these challenges are not insurmountable
and forward thinking organisation are successfully
driving positive change.
Digital transformation; it’s not an easy path
As well as facing barriers to innovation, the
industry is also facing obstacles when it comes
to implementing its digital transformation
programmes.
The biggest barriers cited by survey respondents
were legacy systems and cultural resistance, both
of which drew 43% of the vote, leaving difficulty to
secure investment (10%) and a lack of talent (5%)
far behind.
One survey respondent said:“It is difficult for
many organisations to consider new technologies
as they are simply not set up for them. Lots of
data can be collected but it has no benefit unless
the organisation can consume the data. This
fundamental point makes it nearly impossible to
embed new technologies, as old technologies are
set in stone within the organisation.”
51%have just started down the path of
transforming their digital operations

5. 05
TINtech 2017 report
Despite these barriers, 44% of survey respondents
said they were already deep into their digital
transformation journey, while 51% said they
had just started down the path of transforming
their digital operations. The remaining 5% said
they were making plans to start their digital
transformation, but had not yet started.
The Threat of Disruption
Despite the strides being made on this front, it is
clear that there is still much to be done by market
incumbents to mitigate the threat of disruptive
new market entrants and insurtech-driven start-
ups and spin-offs.
One survey respondent said that they feared
disruptors outside of the established insurance
providers could disrupt the industry if innovation is
not accelerated, particularly in the London market.
One way insurers can stay ahead of their rivals is by
adopting an omni-channel approach to insurance,
enabling them to satisfy the increasing demands of
consumers in an always-on digital world.
Of course, technology will play an important role
in facilitating this transition, but insurers will also
need to make sure they have the right people
and culture in place to ensure the shift is made
successfully, with the needs of their customers
front and centre.
“The organisations we’re in are
so big, to get sign-off or change
is such a long process that the
innovation is outdated by the
time it’s agreed and timescales
are put in place,”
“We can’t keep up with the technology quick enough,”
“As a market, we’re reactive rather
than pro-active, and if the systems
aren’t currently in place, by the
time we’re impacted it’ll be too late
for us to compete.”
“I am worried that companies such as Amazon and
Google, and also aggregators (such as GoCompare and
Compare the Market), will break into the London Market,
and the London Market will be unable to compete.”
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6. 06
TINtech 2017 report
About the author
Matt Scott is an award-winning journalist and edi-
tor with an MSc in Actuarial Finance who specialises in
data-led journalism and research for the insurance and
financial services industries. He has previously worked as
an editor for Insurance Times and as a contributor for the
Chartered Insurance Institute.
www.mattscottjourno.com
About TINtech
TINtech is the UK’s leading insurance technology
strategy event focused on leveraging technology to
enable effective business processes, deliver operational
efficiencies and drive customer focused innovation
across insurance organisations.
15th
June 2017 | Grand Connaught Rooms, London
www.TINtech.co.uk
#TINtech
These issues and more will be no doubt be further discussed at TINtech and I look forward to meeting
some of you on 15th June. I’ll be writing an overview of the event, and sharing some of my thoughts as
well as those of the speakers and attendees – so if you have any thoughts on any of the above, or on any
of the issues discussed on the day that you’d like to see in the report, do come and find me.
Register & join the discussion »
About The Insurance Network
The Insurance Network was established in 2004 and
provides director level executives from the UK insurance
sector with a strategy forum for business networking,
knowledge sharing and benchmarking. The Insurance
Network has been running TINtech for 9 years.
www.the-insurance-network.co.uk 020 7079 0270
@TheInsuranceNet
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