“The future is here; it’s just uneven”


“The future is here; it’s just uneven.”



  • Bill Pieroni, CEO of the Association for Cooperative Operations Research and Development (ACORD), discusses the vital role of risk managers in the ever-changing insurance industry.
  • Pieroni emphasizes the significance of understanding the customer’s role and digital maturity in shaping the industry.

The Role of Risk Managers in Shaping the Industry:

  • Pieroni highlights the customer’s role in insurance and the influence of risk managers as buyers.
  • Digitally mature carriers are experiencing faster growth and higher profits, mainly due to risk managers’ decisions.
  • ACORD’s annual study shows that highly digitally mature carriers outperform others in growth, combined ratios, customer satisfaction, and shareholder returns.

ACORD’s Contribution to the Insurance Industry:

  • ACORD has developed data standards defining key insurance elements, supporting 1,200 standardized transaction types across various stakeholders in the insurance industry.
  • Data and connectivity are essential in the insurance industry, enabling efficient and effective operations.

Uneven Distribution of the Future:

  • Pieroni notes that the insurance industry’s future is unevenly distributed, with highly digitally mature carriers outperforming others.
  • The COVID-19 pandemic accelerated digital transformation in the industry, impacting digital laggards negatively.

Challenges in Attracting Talent:

  • Attracting high-skill talent is crucial for insurance organizations, especially as the industry faces an aging workforce.
  • Insurance ranks low as a preferred profession among recent graduates, making it challenging to attract top talent.
  • Legacy-powered firms with outdated infrastructure struggle to attract talent.

Focus Areas for Insurtechs:

  • Pieroni advises insurance companies to focus on improving claims adjudication and underwriting processes.
  • Claims and underwriting represent significant expenses in the insurance industry, making them critical areas for innovation.
  • Addressing these areas can lead to greater efficiency and effectiveness in handling premium dollars.

AI as Applied Statistics:

  • Pieroni views artificial intelligence (AI) as applied statistics and believes it will augment, not replace human roles.
  • He emphasizes that AI is transformative but should not be feared and likens it to other technologies that enhance productivity.
  • The key to AI’s success lies in improving individual productivity.

Addressing the Underinsurance Gap:

  • Pieroni suggests that regulators should support insurance in emerging markets to promote stability.
  • He notes that there has been more growth and profitability in mature markets over the last decade.
  • Risk managers should prioritize understanding their insurance providers’ financial stability and claims-paying ability.

The Darwinian Evolution of the Industry:

  • Pieroni describes the insurance industry as a “Darwinian evolution” where natural selection plays a role.
  • Competent risk managers prioritize value over the cheapest price, contributing to the industry’s evolution.
  • Pieroni encourages risk managers to understand their role in shaping the industry’s future.

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