9Insurance Business ReviewDECEMBER 2025attracting too many customers, which is typically the case when you have a gap in your policy wording, i.e., they cover a risk that will lead to many or high claims. These platforms are adequately manageable with Auto Machine Learning and sophisticated pricing engines. As an insurer, if you can underpin pricing with additional data, including external sources, identify trends and properly assess other economic factors, you can use digital to gain an edge. Embedded Insurance Unlike Price Comparison Websites, Embedded Insurance is the seamless integration of buying insurance coverage with the purchase of products or services: Buying or leasing a new car covering Motor Third Party Liability and Motor Own Damage, protecting a leisure trip, buying an e-bike with theft protection and many others. A variant of Embedded Insurance is the integration into banking apps. Insurers require reliable real-time API services and orchestration capabilities to engage easily with new distribution partners. New products and product variations must be 100% configurable, there is no time for a 2-week IT project with coding. Broker-Led DistributionWith the increasing adoption of digital solutions, brokers and agents are also under pressure to respond faster to client requests and inquiries. All major carriers and brokers are optimizing their IT landscape to interact more effectively digitally with each other via APIs. And they are investing in Underwriting workbenches to abstract from their underlying insurance core systems, which tend to be too clunky or slow for rapid adoption and state-of-the-art user experience. Keystones to staying competitive include a much faster triaging and processing of submissions, leveraging internal data assets, including risk profiles and risk scores, and additional external data enrichment services to provide underwriters with more accurate data to inform their decisions. Investing in Core Competencies Pays Out in Strengthened Resiliency An insurer's core capability is business resilience. Carriers need to quickly understand the risk of individual submissions at any time to keep their regional exposure within defined boundaries and fully account for the rising costs of claims payments due to inflation. Data analytics, AI, ML, and NLP are powerful tools, especially for the data-intensive insurance industry. However, even ChatGPT, which is being touted as a ubiquitous technology right now, won't rewrite a basic rule. Every Insurer needs to get the data basics right first: establish a proper Data function that improves the data quality, fully matches claims data to policies, and leverages benchmark data for markets and specific lines of business. Best-in-class insurers have successfully implemented this new function and can now fully understand their book of business. They can now actively steer the development of their customer portfolio, including churn prediction and churn steering. Reinsurers are improving on this "muscle" for their own units and offering these functionalities as a service to clients. Investing in a data function is fundamental. Only successful investment in data quality and management will open up a reasonably meaningful opportunity for insurers to truly exploit AI in terms of value creation. Only on this basis can our industry leverage the opportunities of the cloud or interact more effectively with customers and sales partners via APIs. Data helps insurers to develop the portfolio in a targeted way: not only limit control, risk management, or pricing are continuously optimized against the data backdrop. Any company that embraces technological trends and combines them with its core values and competencies will be rewarded for this investment in its business model with increased competitiveness. For insurers, more technological trends must be discovered and invested into. Munich Re shares its own monitoring, the Tech Trend Radar, with the industry annually. My credo towards all leadership teams is: The most important ability is to adapt to technical-driven change in a sustainable way for your business and to leverage expert knowledge in a targeted way.
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