blankCorporate Insight recently attended the 2019 Auto Insurance Report National Conference at the beautiful Breakers resort in West Palm Beach. Every year, host Brian Sullivan of Risk Information invites industry leaders and key decision-makers to offer their takes on the latest industry innovations and auto-related products and services.

Each year, Mr. Sullivan concludes the conference with his highly anticipated 20 Trends presentation, wherein he aggregates a year’s worth of market assessments, data analysis and primary research to make predictions about the coming year and beyond. In this post, we discuss the highlights of the presentation.

1. Marijuana and distracted driving are massive industry-wide problems

Sullivan spotlighted these two issues as the primary conundrums facing the industry in 2019. He noted that both marijuana and distracted driving are particularly worrisome because no solutions have emerged despite the rapid pace of innovation in the auto insurance industry. Marijuana poses an especially significant threat because of how little the industry understands about how consumption impacts risk it at this stage. Matt Moore of the Highway Loss Data Institute delivered a compelling talk that underscored this very obstacle, arguing that despite significant research, it is clear only that marijuana impairs drivers to some extent, but this varies significantly by individual and no method exists that can accurately measure intoxication levels. Further compounding the marijuana problem is the mainstream public perception that marijuana consumption does not impair driving ability.

As for distracted driving, an overwhelming majority of people believe it is bad, but that does not stop them from engaging in high-risk behaviors. Sullivan expressed cautious optimism that solutions to the distracted driving issue are on the horizon thanks to the immense volume of driver smartphone data available, but he noted that it will not be easy to tear people away from their phones.

2. Insurtechs are now a permanent part of the insurance ecosystem

Sullivan declared that the insurtech movement has recently moved into “phase two” of its existence. He described the initial phase as marked by the idea that insurtechs were “going to disrupt and displace incumbents,” but pointed out that this did not ultimately happen due to deep-seated industry complexities. However, Sullivan said that insurtechs have pivoted to creating very specific tools that can solve niche problems for insurers and argued that this change is a sign of maturity. He believes that this development is ideal for the traditional incumbent insurers, for whom innovation can be difficult due to the penalties of failure—indeed, incumbents can rely on the insurtechs to innovate. In this brave new world of partnerships, Sullivan opined that insurers who successfully manage their third-party relationships for data, products and services can develop a significant competitive advantage.

3. Insurers must invest more in web and mobile

Sullivan acknowledged the challenges insurers face when building websites and mobile apps but called on them to “step it up” because the bar has risen. He argued that the need to invest in digital channels stems from rising consumer expectations, which are driven by best-in-class experiences in other areas of their online lives. In this case, Sullivan drew a parallel to early successful insurtechs, most of which boast new-age websites with a more modern look and feel than those of industry incumbents. Corporate Insight’s industry research service, P&C Insurance Monitor—which examines the digital presence of 19 leading insurers—has also observed this trend: over the last two years, nine coverage group firms have revamped their private sites. In eight of the nine instances, the revamped sites featured a tiled web design, an interface popularized by early insurtechs.

To learn more, check out other P&C Insurance Monitor blogs such as our recaps of firms’ response to Distracted Driving Awareness month and recent mobile app innovations.