Commentary/Opinion
May 2025 ITL FOCUS: Customer Experience | Insurance Thought Leadership
ITL FOCUS is a monthly initiative featuring topics related to innovation in risk management and insurance.
FROM THE EDITOR
Since the dawn of the Insurtech movement a decade-plus ago, we’ve had three waves of innovation concerning the customer experience.
The first was based on the fear of being “Amazoned.” Insurers looked at the company’s One-Click capability and general ease-of-use, then stared in dismay at all the forms that were required in insurance, at the legalese in the lengthy contracts, at the lengthy back-and-forths. Insurers worried that some tech giant could do a cannonball in insurance and displace the incumbents as Amazon had done to so many traditional retailers, so they tried hard to become friendlier to the customer.
Nobody would confuse insurers with Amazon, but they made progress. Then the second wave came along. That was caused by COVID. Suddenly, it was no longer possible to meet face-to-face to talk through insurance issues or to sign documents. It wasn’t even possible for a while for insurers’ employees to get into the office to mail checks. A burst of innovation had to occur to bring insurers more into the digital age, removing a lot of inconveniences for customers.
Now we’ve moved into the generative AI wave, and this should be the most important yet. Already, Gen AI is proving itself to be a remarkably efficient compiler of data. That allows speeding up all the processes that touch (and frustrate) customers – from interactions with agents or brokers and, through them, with underwriters to, down the line, the handling of any claims.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
Climate/Resilience/Sustainability
ClimateTech Connect Sets New Course for Industry Collaboration | Insurance Innovation Reporter
Founder and CEO Megan Kuczynski reflects on conference highlights, sharing key takeaways and what’s next for the new conference held this year in Washington, D.C.
The inaugural ClimateTech Connect conference, held April 15-16 at the Ronald Reagan National Building and International Trade Center in Washington, D.C., brought together nearly 450 leaders from insurance, finance, government, and technology sectors to discuss the urgent challenges of climate resilience and innovation. Founder and CEO Megan Kuczynski, a veteran of global B2B events, described the event as a “Zeitgeist moment” for the industry, marked by candid conversations, cross-sector collaboration, and a surge of optimism for technological solutions.
Personal Highlights: Curated Content and Global Energy
Kuczynski, who drew on her experience launching major tech events, emphasized the unique energy and diversity at the conference. “We worked hard to bring the A-list in terms of speakers, but a highlight was the different lenses of the speakers and attendees,” Kuczynski said, highlighting panels that spanned fire, wind, and flood perils, and included voices from PG&E, San Francisco’s former fire chief, and NASA. “The differences of opinions and different lenses that people are bringing to tackle climate change problems are really fascinating,” she added.
She was particularly struck by the global reach and innovation on display: “We had people attending from Brazil, Mexico, Bermuda, Croatia, Norway and India. That, along with the innovation on display at the conference was really exciting.” The conference’s pitch competition, which drew startups from around the world, was a personal highlight for Kuczynski, who noted, “The most exciting aspect is the electrifying innovation with the startups.”
Megan Kuczynski, Founder and CEO, ClimateTech
News
State Farm takes actual cash value lawsuit ruling to U.S. Supreme Court
[Ed. Note: There's a lot on the line here for State Farm, Audatex/Solera and in fact all insurers and information providers who are involved in Total Loss vehicle valuations and settlement]
[T]he only thing policyholders were ‘owed’ was the ‘actual cash value’ of their vehicles,” State Farm wrote last week. “You’d never know it from reading respondents’ brief but the regulations they invoke specifically define ‘[a]ctual cash value’ as ‘the fair market value of the loss vehicle immediately prior to the loss.’
The plaintiffs allege that State Farm applied two putatively unlawful negotiation and condition discounts in calculating its vehicles’ actual cash values (ACVs).
On State Farm’s appeal of the district court’s partial ruling in favor of the plaintiffs, the Ninth Circuit concluded that, “Washington’s insurance regulations set forth various ways in which an insurer may go about ascertaining actual cash value, including by basing it on data for comparable vehicles in the local area, obtaining quotes from licensed dealers, analyzing data of advertised comparable vehicles, and so on.”
Financial Results
Berkshire Outguns Market as Buffett Reaches 60 Years in Charge
Berkshire Hathaway BRKa.N has held up well in a rocky year for stocks, and shareholders this weekend will be seeking reassurance from Warren Buffett that they remain in good hands as tariff turmoil disrupts corporate America.
At Saturday’s annual meeting in Omaha, Nebraska, the 94-year-old billionaire will mark 60 years in charge of what he built into a $1.15 trillion conglomerate.
Buffett will spend 4-1/2 hours fielding shareholder questions, which typically focus on Berkshire’s operating businesses, markets, the economy, life lessons, and the company’s future after the Oracle of Omaha departs.
Berkshire’s businesses are disparate, and include Geico insurance, the BNSF railroad, Berkshire Hathaway Energy, Dairy Queen, Fruit of the Loom, and retro brands such as Ginsu knives and the World Book Encyclopedia.
For many, they serve as a proxy for the American economy.
Yet through April 30, Berkshire shares have trounced the Standard & Poor’s 500 .SPX, rising 18% while the index was down 5%.
GEICO ends Q1 with $2.1 billion profit
GEICO ended the first quarter of 2025 with a $2.1 billion underwriting profit, a ~13% increase compared to the same period last year.
Premiums written increased $710 million (6.6%) in the first quarter of 2025 compared to 2024, reflecting an increase in policies in-force and higher average premiums per policy.
Losses and loss adjustment expenses increased $10 million (0.1%) in the quarter compared to 2024. GEICO’s loss ratio (losses and loss adjustment expenses to premiums earned) was 69% in the quarter, a decrease of 3.5 percentage points compared to 2024. The loss ratio decline reflected the impact of higher average premiums per auto policy and lower claims frequencies, partially offset by increases in average claims severities and less favorable development of prior accident years’ claims estimates.
Underwriting expenses increased $263 million in the first quarter of 2025 compared to 2024. GEICO’s expense ratio (underwriting expense to premiums earned) was 10.8% in the quarter, an increase of 2.1 percentage points compared to 2024, attributable to increased policy acquisition related expenses, partially offset by increased operating leverage.
Insurtech Kin reaches $100 billion in insured property value By Investing.com
Chicago-based homeowners insurtech company, Kin, has seen a significant increase in its total insured value over the last four years. From 2021 to 2024, the company expanded its insured value from $10 billion to a staggering $100 billion.
During this four-year period, Kin also successfully reduced its gross adjusted loss ratio, net of excess of loss recoveries, from 66.6% down to 25.9%. This was achieved through the management of reciprocal exchanges.
Kin’s CEO and co-founder, Sean Harper, expressed his satisfaction with the company’s progress, stating, "Reaching $100 billion in insured property value represents a pivotal moment in Kin’s journey." In 2021, the majority of Kin’s total insured property value was based in Florida, accounting for 95% of the total. By 2024, however, Florida’s share had decreased to 75% of the total insured property value. This change is a direct result of Kin’s strategic decision to diversify its risk and expand geographically. In line with this strategy, Kin has launched operations in several states that are prone to natural disasters, including California. Despite its expansion, the company continues to maintain its commitment to providing insurance services to underserved homeowners.
InsurTech/M&A/Finance💰/Collaboration
NEXT Insurance Eyes Growth Following ERGO Acquisition | Insurance Innovation Reporter
The California-based digital small business insurer says its acquisition by ERGO, Munich Re’s primary insurance arm, removes capital constraints and enables a long-term strategic focus, while preserving its commitment to digital simplicity.
NEXT Insurance has always positioned itself as a digital-first, small-business-focused carrier with a mission to simplify commercial insurance for America’s smallest enterprises. Now, as it prepares to become part of ERGO Group, the primary insurance arm of Munich Re, NEXT enters a new phase—one of expanded resources, capital freedom, and intensified technological ambition.
We’re doing fantastic,” comments Effi Fuks-Leichtag, Chief Product Officer, NEXT Insurance. “We’ve surpassed 600,000 active customers, and our fundamentals—growth, loss control, profitability—are where we want them to be.”
NEXT’s success is grounded in its direct-to-consumer digital strategy, but the company now maintains a balanced distribution mix that includes agent-driven sales and embedded insurance solutions. The agency channel, once a long-term bet, is now growing rapidly and may soon become the largest.
A Clear Small Business Focus
NEXT was founded in 2016 to serve U.S. small businesses—especially microenterprises and sole proprietors—with streamlined, digital insurance products.
“A large portion of our customers have zero to one employee,” Fuks-Leichtag notes. “We’re particularly strong in professional services and construction and gaining traction in food and beverage, with retail products coming soon.”
**Anthony R. O’Donnell Executive Editor
AI in Insurance
AI Agents Will Transform Insurance Operations | Insurance Thought Leadership
While off-the-shelf AI brings modest gains, autonomous AI agents are the key to operational excellence for insurers.
Artificial intelligence is set to transform the insurance industry. According to one study, 99% of insurers are either already investing or making plans to invest in Generative AI (GenAI).
They're targeting ways to streamline operations, improve decision-making and enhance customer service. The opportunity is clear: One study found that GenAI could reduce payouts by between 3% and 4%, and drive a 20-30% reduction in loss-adjustment expenses in claims alone.
Yet intent does not guarantee success. Insurers are not investing in AI to secure small gains, but that is often what happens because they start with off-the-shelf AI models.
Spear Technologies Launches Next-Generation AI Capabilities to Transform Claims Management and Policy Administration
Spear Technologies (“Spear”), a leading provider of award-winning core software solutions for the insurance industry, today announced a suite of advanced AI enhancements designed to streamline operations, boost productivity, and enable faster, data-driven decision-making across SpearSuite™—its award-winning suite for claims management, policy administration, billing, and portal solutions.
The new capabilities deliver a more seamless, intuitive experience, allowing business users to tailor AI models to their specific needs and domain realities - ensuring the AI not only works, but works for them - with no developers needed.
The new capabilities leverage generative AI, predictive analytics, and intelligent automation to address key pain points for insurers and public entities. They deliver a more seamless, intuitive experience, allowing business users to tailor AI models to their specific needs and domain realities—ensuring the AI not only works but works for them. No developers are necessary, saving time while giving teams greater control, enhanced capabilities, and a stronger return on technology investment. With these capabilities, Spear empowers insurance organizations with actionable insights, automation, and optimized business processes across policy and claims management. This comprehensive, AI-driven approach helps insurers maximize operational efficiency and elevate customer satisfaction.
Key features of the new release include:
- Predictive Analysis –
- Smart Summarization
- Claims Assistant Email Agent
- Automated Responses & Sentiment Analysis
- Intelligent Document Processing _ Virtual Agents
- Smart Paste
- CoPilot Assistant CoPilot
Telematics, Driving & Insurance
LightlyEdge, a vehicle data collection solution introduced – Telematics Wire
Swiss AI startup Lightly has introduced LightlyEdge, a data collection solution.
LightlyEdge captures the relevant data directly at the source. It intelligently resolves redundant data by filtering out unnecessary data at the point of capture, streamlining what enters storage and processing systems.
LightlyEdge employs smart models on vehicle cameras and sensors, analyzing video in real-time to automatically detect rare and significant events—such as a child near a crosswalk or an accident in snowy weather—while disregarding irrelevant data. This approach significantly reduces excess storage and bandwidth expenditures, ensuring that training datasets are more comprehensive, diverse, and aligned with real-world driving scenarios.
LightlyEdge builds on the foundations established by LightlyOne in data centers by bringing intelligence directly to vehicles’ edge devices. This enables developers to receive real-time feedback and enhance their AI models on the road, thereby accelerating the pace of innovation through a user-friendly interface that facilitates rapid deployment and continuous improvement.
Announcements
AgentSync Unveils Contracting Solution, Completing End-to-End Automation for Agent Onboarding
AgentSync, a leader in insurance distribution channel management (DCM) software, today announced AgentSync Contracting, a groundbreaking solution designed to fully automate the critical contracting stage of insurance agent onboarding.
With the introduction of Contracting, AgentSync provides an end-to-end platform that seamlessly connects distributors and underwriters, accelerating the ready-to-sell process for agents and their distribution partners, from carriers to managing general agencies (MGAs), managing general underwriters (MGUs), field marketing organizations (FMOs), insurance marketing organizations (IMOs), and everyone in between.
AgentSync Contracting addresses longstanding industry challenges by eliminating manual processes, reducing administrative burdens, and minimizing errors common in traditional contracting workflows. Contracting complements AgentSync's existing APIs, which enable carriers to effortlessly accept and process contract requests from a variety of submission sources, in a standardized format. This flexibility positions AgentSync as the modern infrastructure upon which distribution networks can reliably and efficiently operate.
AgentSync Contracting addresses longstanding industry challenges by eliminating manual processes and minimizing errors.
"Contracting was our 'last mile' in achieving complete automation of the distributor-to-underwriter workflow, which has always been our North Star," said CEO Niji Sabharwal. "With this release, we're establishing AgentSync as the definitive system of record for agent onboarding and contracting in the insurance industry."
Initially designed for the life and health insurance sectors, Contracting rapidly expanded its capabilities to serve property and casualty (P&C) agencies. Contracting now caters equally well to small agencies with as few as five agents as it does to large-scale FMOs and IMOs managing upward of 50,000 agents.
Today
Warren Buffett shocks shareholders by announcing his intention to retire at the end of the year
Earlier, Buffett warned Saturday about the dire global consequences of President Donald Trump’s tariffs.
Warren Buffett shocked an arena full of his shareholders Saturday by announcing that he wants to retire at the end of the year.
Buffett said he will recommend to Berkshire Hathaway’s board that Greg Abel should become CEO at the end of the year.
“I think the time has arrived where Greg should become the Chief Executive office of the company at year end,” Buffett said.
Previously the 94-year-old investor has always said he had no plans to retire.
Earlier, Buffett warned Saturday about the dire global consequences of President Donald Trump’s tariffs while telling the thousands of investors gathered at his annual meeting that “trade should not be a weapon” but “there’s no question that trade can be an act of war.”
Recommended Events
InsurTech Summit 2025 | June 3| NYC| McDermott Will & Emery
Join us this June for the annual McDermott InsurTech Summit in NYC!
Connect with the brightest minds in insurance at our exclusive event, hosted in the stunning One Vanderbilt building on McDermott’s newly renovated 67th and 68th floors. This half-day Summit is your ticket to the future of the industry, where we will explore the latest trends, tackle pressing challenges, and uncover groundbreaking opportunities.
What to Expect:
- Engaging Panels: Dive deeper into emerging trends and critical issues shaping insurance with industry leaders.
- Networking Opportunities: Connect with innovators, insurance-focused investors, and founders from across the country, all in one room.
- Cocktail Reception: End the day with fellow attendees and breathtaking city views.
Register today and join us at the forefront of insurance innovation