Written by Dr George Shelton

At this year’s ITI Europe, one message stood out: that the real competitive edge for insurers isn’t solely AI, but about how well we combine technology with trust, purpose, and long-term thinking. 

AI might be transforming insurance, but it's not the full story.

"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run." Amara's Law

What ITI Europe Revealed About the Possible Future of Insurance: Can It Be Simple and Socially Conscious?

Daniel Schreiber kicked off ITI Europe this year with a bang, boldly claiming that AI mastery will emerge as the ultimate competitive differentiator for insurers.

His logic? That insurance can essentially be boiled down to two numbers—loss ratio and expense ratio—and the right AI is the key to unmatched performance in both. His argument is that AI can quantify risk more accurately, resulting in a better loss ratio and that AI bots can serve customers more cheaply and as effectively (or better), resulting in a smaller expense ratio, aligning with the insurer’s unique business model.

There is no question that Schreiber’s rockstar keynote got the room talking and thinking. Is traditional insurance dead? While insurtech and fintech are related, they operate in different domains within the financial sector, with insurtech companies primarily focusing on insurance services rather than financial services. How will hefting incumbents compete with this bright, agile, customer-friendly offering? However, whilst risk is a fundamental part of the insurance industry, other very human customer-centric elements, including trust (in the insurer), are essential.

It could be argued that this is the greater challenge for our industry - that no matter how good your data, or your technology, or even your price point, consumer trust, which includes AI, transcends them all. Trust is hard to build, easy to lose, and fundamental for products like insurance.

What Daniel missed is that from the customer’s perspective, and therefore the business perspective, perceived risk is just as important as actual risk, because that’s how customers work out whether or not they trust you.

As the conference unfolded, a range of discussions revealed a slightly more nuanced reality. Technology may power efficiency, but trust and value remain the cornerstone of long-term success. The UK's status as a leading hub for insurance innovation, with its significant concentration of insurtech companies, was also highlighted, emphasizing the impact of favorable regulations and digital transformation efforts on cultivating a vibrant environment for startups and established firms alike.

Introduction to the Insurance Industry of Today

The insurance industry is undergoing a shift—technological, cultural, and strategic. Traditionally viewed as a complex sector focused on risk mitigation, the industry today finds itself at the intersection of innovation and human impact.

At its core, insurance offers financial protection against uncertainty. But behind the scenes, it’s a dynamic ecosystem of traditional insurers, insurtech startups, and adjacent players, all working to deliver tailored insurance solutions that match customers' evolving needs.

Regulation, too, is shaping the pace of change. With the introduction of the Digital Operational Resilience Act (DORA), insurance companies are being pushed not just to digitize, but build systems that can withstand and recover from serious disruptions. It’s not just about compliance—it’s about survival and trust.

In this high-stakes environment, insurers are rethinking everything from underwriting to customer experience. The goal? To not only meet new digital standards but to remain relevant in a world where customer expectations are rising, and attention spans are shrinking.

The Role of Insurtechs

Insurtech companies are no longer on the sidelines—they’re driving the industry forward.

These firms use advanced technologies to streamline operations, reduce costs, and redesign the customer experience. But their impact goes deeper than just digitization. Insurtechs are redefining what insurance can feel: simpler, faster, and more intuitive.

While many traditional insurers still grapple with legacy systems, insurtechs are setting the pace, offering agile, AI-driven insurance solutions that appeal to modern consumers. As DORA raises the bar for cybersecurity and digital resilience, these firms are proving they're not just fast—they're built to last.

At the heart of it all is trust. Customers want insurance that feels transparent and reliable. By merging technical innovation with user-first design, insurtech companies are creating models that do more than perform—they connect.

As the broader insurance industry evolves, these companies are showing what’s possible when speed meets stability, and when innovation serves not just the business, but the people it protects.

Customer Journeys: Mapping the Path to Loyalty

Mapping the customer journey is no longer a back-office exercise—it’s a strategic priority. Leading insurers are starting to see each customer interaction as part of a broader trust-building continuum. Take American Family Insurance, for example. After analyzing the full customer journey, they streamlined their digital touchpoints and improved retention by identifying key drop-off moments during claims and renewals.

Others, like Lemonade, have built their journey around immediacy and simplicity, from onboarding to claims, reframing insurance as something fast, fair, and even delightful. But the lesson isn’t about speed alone. It’s about anticipating where friction happens and designing around it—whether through proactive communication, intuitive UX, or human support at the right time.

Ultimately, loyalty doesn't start with rewards or discounts. It starts with clarity, responsiveness, and being there when it matters. Insurers who get on the journey right turn satisfied customers into advocates.

How Customer Experience, Trust, and AI Drive Insurance Loyalty

We're taught at business school to think of the lifetime value of customers, build long-term relationships with them, and that loyalty is a function of satisfaction and trust. When building a new insurance company, speed and growth, necessary ingredients for investors, rarely go hand-in-hand with stability and limited risk, essential pillars for an insurance company. Arguably, what matters the most is long-term stability, customer centricity, and good governance. However you look at things, this takes time. Time required to build organisational wisdom, time to make market and customer credibility, and time to establish stability.

Can Insurtechs Like Lemonade Build Loyalty Through Speed and Simplicity?

Lemonade has nailed customer experience. From a customer perspective, Lemonade's approach is very attractive, especially to a generation that values speed, simplicity, social impact, and socially conscious values. 

Their chatbot Maya can have you insured in as little as 90 seconds, and filing and claims settlements can take mere minutes. Contact center operations also play a crucial role in enhancing customer interactions, integrating emerging technologies like artificial intelligence to improve service delivery and align with the needs of various stakeholders, including customers and partners.

For Lemonade, the real challenge lies in achieving the longevity of a conventional insurer while behaving like a disruptive digital consumer brand that has to please investors. Transitioning from a fast-moving, high-growth startup to something less sexy but more stable requires Lemonade to demonstrate that relying heavily on AI and forming strong partnerships with insurers and brokers is not a vulnerability but a superpower, despite the fact that mainstream AI regulation is in its adolescence.

The Role of Insurtech in Improving Customer Experience

Insurtech is revolutionizing customer interactions within the insurance industry, offering a more personalized and seamless experience. By harnessing the power of artificial intelligence, machine learning, and big data, insurtech companies can analyze customer journeys and provide tailored solutions that meet their evolving needs. This approach not only enhances customer satisfaction but also helps insurers reduce operating costs and improve business performance.

Emerging technologies such as blockchain and the Internet of Things (IoT) are further enhancing the customer experience by streamlining claims processing and providing more efficient service delivery. For example, some insurtech firms utilize AI-powered chatbots to offer 24/7 customer support, significantly reducing customer complaints and improving overall satisfaction. These technological advancements are setting new benchmarks for customer service in the insurance industry.

Customer-Centric Innovation vs Long-Term Stability in Insurance

So, what can we learn from this unicorn rocketship, and how can we balance innovation with longevity?

• Customer centricity - Lemonade has designed a truly customer-centric offering. They made it their mission to address and resolve real pain points, such as sluggish and bureaucratic interactions, opaque internal processes, and the sometimes adversarial attitude that other insurers are perceived as having. They provide examples of how various industries innovate and address customer experience challenges, highlighting best practices and cautionary tales.
• Bold thinking and control - by committing to being a full-stack carrier, Lemonade understands and has retained control of what they were doing, and how they did it. This long-game approach has allowed them the autonomy to defy the status quo when required.
• Values really matter - Lemonade's Gen Z customers care about purpose, and align their spending with their values. By promoting their “do-good” ethos, and demonstrating their commitment to sustainability through elements like their B-corp certification, customers are reassured that Lemonade is ‘one of the good guys’.
• Time tells - There is no doubt that Lemonade is an innovative trailblazer, doing things differently. However, only time will tell if Lemonade can cement itself as a multi-generational insurer, able to accrue decades (or even centuries) of wisdom and goodwill from customers.

Why Purpose-Driven Insurance Matters in the Age of Digital Disruption

Lemonade is redefining the insurance value chain through its ambitious, tech-driven, customer-centric approach. The importance of first movers in the insurance industry cannot be overstated, as they set the pace for digital transformation and innovation. Will incumbents learn from them, adapt their operations, and realistically compete for the same customers by embracing innovations and offering lower prices? Or will the fear of innovation and change leave existing carriers out of breath and struggling to keep up with the preferences of younger generations?

Artificial Intelligence in Insurance: From Prediction to Personalization

Artificial intelligence (AI) and machine learning (ML) are no longer fringe tools in insurance—they’re fast becoming core to how insurers operate. From automating underwriting to enhancing customer experience, these technologies are driving efficiency and reshaping customer expectations.

Insurtech companies are leading the charge, using AI and ML to make faster, smarter decisions. Thanks to AI-powered chatbots and digital assistants, risk assessment is becoming more precise, fraud detection is more agile, and customer service is more responsive. According to recent reports, AI and ML adoption in the insurance industry is expected to grow by 50% over the next two years, unlocking new levels of speed, accuracy, and cost savings.

But it's not just about automation. The real power lies in personalization—designing coverage and communication around individual needs and behaviors. In a digital-first world, insurers who can predict and meet customer needs before they're voiced are the ones building lasting loyalty.

Climate Risk and the Push Toward Sustainable Insurance

The impact of climate change on the insurance sector is undeniable. More frequent extreme weather events are increasing claims and straining traditional risk management models, pushing insurers to adopt more advanced tools to stay ahead.

Insurtech firms play a vital role here, harnessing big data and AI to track environmental trends, model future risks, and design innovative insurance products that respond to climate-related challenges.

But adaptation isn't just technological—it's cultural. More insurers are embedding environmental, social, and governance (ESG) factors into their strategies, aligning with customer values and demonstrating a broader sense of accountability. In a market where trust is currency, a strong ESG posture is becoming a competitive advantage.

Big Data: The New Backbone of Insurance Decision-Making

Data is the new infrastructure of the insurance industry. It informs every touchpoint, from underwriting to claims to customer retention.

Big data allows insurers to go beyond traditional actuarial tables. Instead of relying on static historical models, they can analyze dynamic, real-time inputs—driving smarter pricing, more accurate risk scoring, and proactive customer engagement.

This shift is also improving customer experience. With deeper insights into preferences and behaviors, insurers can personalize policies, communications, and services, meeting expectations before they become complaints. In short: better data, better decisions.

How Technology Is Reshaping the Insurance Business

Technology isn't just transforming insurance—it's redefining what insurers are. Digital platforms, cloud infrastructure, and AI-powered tools are modernizing everything from policy administration to claims processing.

Insurtech companies are helping legacy players upgrade their systems, streamline workflows, and reduce operational costs. These improvements aren't just back-end wins—they translate into better, faster customer service and increased agility for insurers.

As digital transformation continues, success will depend on more than tech adoption. The most resilient insurers will be those who combine innovation with governance, speed with stability, and automation with a human touch.

The Future of Insurance: Moving Fast, Staying Trusted

Two powerful forces are shaping the future of insurance: emerging technologies and rising customer expectations. Insurers must now operate with the speed of a digital startup while retaining the trust of a century-old institution.

AI, ML, blockchain, and data analytics give insurers new adaptation tools. But tools alone aren't enough. What matters is how they're used to streamline, personalize, and build trust.

Digital-first players are winning over younger generations with seamless experiences and social impact values. At the same time, traditional insurers are being pushed to evolve—to simplify products, humanize service, and modernize their models.

The industry is changing. Those who embrace innovation while honoring the fundamental promise of protection will lead the next era of insurance.

Conclusion: Insurance at a Crossroads

Climate pressures, customer demands, and digital disruption are testing the insurance industry. But with every challenge comes an opportunity to rethink what insurance can be.

By investing in technology, using data wisely, and prioritizing trust, insurers can create lasting value not just for shareholders but also for customers, communities, and the next generation of policyholders.

This is not just a moment of change—it's a chance to lead.

The real takeaway from ITI? 

Insurance has to move with the times. We must serve a new generation of customers on their terms while preserving the stability and wisdom of an ancient industry and highly experienced workforce.

That's why we're committed to preserving what our industry is great at, whilst supporting carefully validated transformation through a range of different initiatives that consider both profit and purpose. These include venture client service, detailed expert-led research initiatives, and specialist thought-leadership and insights harvesting events. Adjusting product lines in response to evolving customer demands and technological advancements is crucial for staying relevant and competitive in the market.

We'd love to hear what you think. To keep the conversation going, book a virtual coffee with George here.