Donald Light
Nationally recognized expert on insurance industry technology and business issues. Works closely with insurer CIOs, and technology firms.
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Articles by Donald Light
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What Insurify’s ChatGPT App Means for Brokers
// (Image source: Insurify ChatGPT app page.) Last Monday, February 9, Insurify (a well-known insurance price comparison site) announced “the insurance industry’s first ChatGPT app, allowing users to browse, research, and compare car insurance directly through the AI platform’s new app library.” This announcement had an immediate, sizable negative impact on the share prices of leading brokers (Marsh, Aon, WTW). I am not a securities analyst.
Mr. Lloyd: Four Cups of Coffee Please . . . and Some Ontology to Share
// (Lloyd’s Register at 71 Fenchurch Street, London. Credit: The Wub/Wikimedia.) A lot has changed since 1688 when Edward Lloyd’s Coffee House became known as a place to hear the latest news about ships and shipping, and was emerging as a place where early forms of insurance were offered to shipowners indemnifying them against the loss of their ships. As 2025 ends one thing hasn’t changed: the value of data, properly analyzed, to make better insurance decisions.
Artificial General Intelligence: What Could Possibly Go Wrong?
I enjoy writing and talking about Artificial General Intelligence (aka AGI). For example, see my Celent report, Artificial General Intelligence: What It Could Mean for Property/Casualty Insurers. On the one hand, everyone (or almost everyone) says AGI does not exist today. That makes it difficult to object to anything anyone says about AGI. It’s a bit like trying to argue with somebody who says that the average length of unicorns’ horns is exactly 4 inches.
Cloud Decisions: A Guide for Cost- and Value-Conscious P&C Insurers
This report is written primarily for small and midsize property/casualty insurers—because they are the segment mostly likely to be facing significant cloud decisions in the next few years. This report does not provide specific tools for analyzing costs in the cloud. Rather it provides a framework for thinking about the cost and value considerations that an insurer should address when migrating on-premises technologies and processes to cloud deployments.
The LA Fires: Loss Control, Pricing Properly, and the California FAIR Plan
// (Image source: California Department of Forestry and Fire Protection.) As I write this blog on Friday January 10, there are multiple large, mostly uncontained fires burning in the greater Los Angeles area. So, this blog begins with an expression of compassion for lives lost, injured first responders and residents, and the devastating losses of homes and possessions.
The LA Fires: Loss Control, Pricing Properly, and the California FAIR Plan
As I write this blog, there are multiple large, mostly uncontained fires burning in the greater Los Angeles area. So, this blog begins with an expression of compassion for lives lost, injured first responders and residents, and the devasting losses of homes and possessions.
It’s Not Your Grandfather’s Actuary’s Pricing Modeling Solution
Pricing models need to change because new hazards are emerging, and some existing hazards are becoming more severe. Pricing models also need to change because they are a foundational element in the underwriting process, which itself is transforming. The report describes 11 capabilities that modern pricing solutions should have.
How Technology Is Shaping the Future of MGAs
The emergence of insurtechs in the 2010–2015 period marked a new stage in the evolution of MGAs. The value propositions of many insurtechs centered on their ability to develop, price, and underwrite products more effectively than incumbent insurers. This report contains profiles of five MGAs whose business models are based on their ability to leverage technology for competitive advantage: Arden Insurance Services: Arden focuses on only one market: residential condominium associations.
Looking Out My Window What Did I See? I Saw a Waymo Staring Back at Me.
In January, this year I peered out my office window, and saw a Waymo vehicle navigating the roadways in my townhouse complex. I live in Menlo Park, California (next to Palo Alto and just up the road a bit from Waymo HQ in Mountain View). So seeing semi-autonomous vehicles being tested is not that big a deal. Although a couple of years ago the quiet street just outside my townhouse complex was a hangout for three or four parked Zoox vehicles, taking a semi-autonomous break together.
Can Technology Enable a Life Industry Transition to More Variable Costs?
This report assumes that expense reductions and improved underwriting results are still critical factors in Life and Annuity. Based on that: ·Future underwriting results will improve with the increased use of artificial intelligence (AI) and access to more data. ·The use of improved technologies can be a major differentiator in profitability. ·Based on an eventual level playing field in underwriting, what should insurers do now?
Can Technology Enable a P&C Industry Transition to More Variable Costs?
This report makes the assumption that the battle for rate adequacy will be won in a foreseeable future. And when that happens: In the short run, declining losses will lead to stronger underwriting results. Over time, however, regulatory and competitive pressure responding to lower losses will lead to lower premiums. Then what should insurers, facing an extended period of lower premiums, do to achieve longer-term success?
Commercial Lines Underwriting: Data, AI, and Automation
Traditional types of data used in commercial lines underwriting have typically been accessed from submissions, public records, and various databases. In recent years, there has been an explosion of types of information available, and technology that has simplified underwriters’ access to that information. Fundamentally there are two kinds of underwriting automation. Complete straight through processing (STP). Process automation in which some, but not all, processes or sub-processes are automated.
One Way to Distinguish Between AI and Gen AI
Since the emergence of widely available Generative AI (aka Gen AI) solutions (OpenAI’s ChatGPT, Google’s Gemini, Anthropic’s Claude, Meta’s Meta AI, and others), there has been a fair amount of confusion (in the general media and even in some trade media) between what is “AI” and what is “Gen AI.” Here is a suggestion of how to distinguish between the two.
An Insurance Score is to Personal Auto as (BLANK) is to Homeowners’
// (Image credit: Thirsty Turf Irrigation/Unsplash.) For many years, personal auto insurers have been using credit-based insurance scores as inputs to pricing algorithms. The insurers state that the resulting premiums are more accurate, and are thus more fair, than premiums calculated without insurance scores. In 2007 the FTC agreed.
An Insurance Score Is to Personal Auto as (Blank) Is to Homeowners Insurance
For many years, personal auto insurers have been using credit-based insurance scores as inputs to pricing algorithms. The insurers1 state that the resulting premiums are more accurate, and are thus more fair, than premiums calculated without insurance scores. In 2007 the FTC2 agreed.
Connecting Insurers to Manufacturers
Today the insurers of manufacturers have a somewhat similar opportunity as auto insurers had nine or ten years ago. The insured automobiles produced a lot of data, which seemed likely to provide valuable guidance for pricing and underwriting. But first the insurers needed a way to access and analyze that data.
Unum: Project Trident, A Customer Intelligence Engine
Maintaining acceptable levels of persistency in employee benefit programs presents multiple challenges.
LWCC: Digital Transformation of Underwriting, Distribution, Submissions
An insurer at the start of a modernization journey has to make a series of choices: which systems, or which features and functions within systems, or what types of improvements in user experience. Then another level of questions arises: build or buy; if build how to access the right skill sets and staff with those skills; and if buy which vendors and which solutions.
ITC 2023 - A Summary of Data and Analytics Sessions
This document was created for Celent customers interested in insurtech and innovation who were unable to attend InsureTech Connect 2023 (ITC 2023) and for those who attended but would like to have a handy recap of the event.
Is Connected Commercial Auto Turning the Corner?
Donald Light // (Image credit: Holden Baxter/Unsplash.) Commercial auto insurance in the United States has, in the aggregate, not been a successful line of business for a number of years. However, within the overall negative picture, there have been individual insurers that found ways to make an underwriting profit. And there has been a significant increase in the range and sophistication of connecting technologies available to fleet owners and fleet insurers.
Rethinking: Will Insurers Be Connected to the Connected Car?
Today more cars than ever are connected, and those connected cars are creating and transmitting a lot of data. This in turn has created a gold rush among automobile manufacturers (aka OEMs), insurers, and others to find ways to monetize that data. For personal auto insurers the stakes and opportunities are greater than ever. Connected cars create data primarily in three ways.
Will Insurers Be Connected to the Connected Car?
Donald Light // (Image credit: Samuele Errico Piccarini/Unsplash.) Today more cars than ever are connected, and those connected cars are creating and transmitting a lot of data. This in turn has created a gold rush among automobile manufacturers (aka OEMs), insurers, and others to find ways to monetize that data. For personal auto insurers the stakes and opportunities are greater than ever. Connected cars create data primarily in three ways.
John Hancock, Allstate, and the Great Cross-Over
Donald Light // January 27, 2022 (Image source: Allstate Drivewise page.) The great cross-over starts. On Monday January 24, John Hancock announced that policyholders participating in its wellness-incentive Vitality Plus program may now receive “Vitality Points” for safe driving—as certified by participation in Allstate’s Drivewise telematics program. This announcement needs some unpacking in order to understand why it is (or will be, or should be) such a big deal.
AXA XL Construction Ecosystem: Model Insurer of the Year
11 March 2021 Donald Light Abstract Viewed retrospectively, many great ideas are obvious. But some great ideas are not at all obvious at an earlier point in time -- except to the person or organization who conceives and executes them before anyone else. AXA XL's Construction Ecosystem meets this standard of a great idea. For years, insurance technology firms have created ecosystems of dozens of solutions to supplement and extend their core system offerings.
ASCOT ARRAY | Celent
11 March 2021 Donald Light Winner of a Celent Model Insurer 2021 Award for Customer Experience Transformation Abstract Through most of its history, Ascot Group has primarily been a Lloyd’s Specialty Wholesale Insurer, with much of its business originating in the United States. It recently decided it also wanted admitted and non-admitted access to some of that US-sourced business, so it established an insurance company in US.
Insurance Innovation Reporter
Donald Light // January 14, 2021 (Sony Bravia TV exhibited at CES 2021.) CES, the mammoth Consumer Electronics Show, was virtual (aka digital), and not so mammoth this year. It was a lot easier moving from session to session. And to tell the truth, I did not miss squeezing into a Las Vegas Monorail car with a lot of my fellow CES attendees.
How to Expand Access to COVID Vaccines without Compromising the Science
The colder months have arrived, and COVID-19 infections and deaths are rising once again—but Americans are breathing a sigh of relief nonetheless, as the first authorized vaccine is finally rolling out. Perhaps surprisingly, though, that will actually make it increasingly difficult for public health officials to judge whether any of the vaccines will work well enough to tame the pandemic.
The Eyes of Investors Are Upon . . . P&C Core Systems Vendors
Donald Light // December 4, 2020 (Image credit: Arek Socha/Quimono.) Even in 2020, a very tough year, certain sectors have attracted the attention of investors. North America-based vendors of core systems for property/casualty insurers have drawn more than their share of attention. They’ve attracted money, a lot of money. Why? And what does it mean for these firms’ investors and for the insurers that their systems?
Sorry, America. Vaccines won't end the pandemic anytime soon | Opinion
With more than 240,000 Americans dead from the COVID virus and far more hospitalized, our country is desperate for a vaccine that prevents serious cases. Billions of dollars in taxpayer money are being spent to put a stop to the virus, yet drug companies are using predominantly mild cases that produce cold-like symptoms, not infections or serious cases, to test the efficacy of their vaccines.
WFH + Corporate Culture = ?
5 October 2020 Donald Light A few years ago . . . well ok, more than a few years ago . . . my undergraduate minor was cultural anthropology. That part of my education has stayed with me. I instinctively try to understand what makes large, complex organizations, like insurers and tech firms, work the way that they do. And specifically, beyond rules and procedures and corporate hierarchies: What makes an insurer or tech firm different from its dozen closest competitors?
IT Spending In Insurance
17 September 2020 Nicolas Michellod, Max Ang, Donald Light, Juan Mazzini, and Karen Monks Making Sense of the Future Insurers' Technology Investments Abstract Following the COVID-19 outbreak earlier this year that is still impacting economies globally, pressure on IT budgets remains, with insurers' CIOs being asked to keep run costs flat or to reduce them.
Something for Everyone: Three Types of Insurance Platform Ecosystems
25 August 2020 Donald Light Abstract This report focuses on the growth and evolution of certain platform elements: third party solutions that are generally not developed and maintained by the platform sponsors. This report calls this set of third party solutions, an insurance platform ecosystem. Various other terms are also in use, such as a platform’s Marketplace or Exchange.
The Road to ADAS: The Use of ADAS Data in Automobile Insurance Pricing
29 July 2020 Donald Light Ok, full Level 5 autonomy is receding in the horizon, no matter how hard we press on the automotive technology accelerator. What we do have today, and will increasingly have in the next few years, is ADAS. ADAS is the unlovely, but widely used, acronym for Advanced Driver Assistance Systems. I personally would have preferred something like “Onboard Collision Avoidance Technology,” but alas “ADAS” is in common usage.
The Eyes of Investors Are Upon . . . P&C Core Systems Vendors
Even in 2020, a very tough year, certain sectors have attracted the attention of investors. North America-based vendors of core systems for Property & Casualty insurers have drawn more than their share of attention. They’ve attracted money, a lot of money. Why? And what does it mean for these firms’ investors and for the insurers that their systems? First let’s look at some of the major deals in late 2019 and so far this year.
How Agents Need to Change Their Role for the Future: A Podcast Conversation with Donald Light | Celent
25 June 2020 Donald Light An Agency Revolution Podcast In this podcast, Celent Analyst Donald Light: How auto insurance will change as autonomous vehicles, telematics, and data-driven safety features become standardized The long-term impact of COVID-19 and how agents need to change course The new technologies shaping the future of the independent agency Presented by Agency Revolution, the Connected Insurance Podcast provides weekly opportunities for listeners to dive deep into the trends...
Policy Administration Systems: North America Property Casualty Edition:
17 June 2020 Karlyn Carnahan and Donald Light 2020 XCelent Awards, Powered By Vendor Match Abstract This report is part of a series on policy administration systems (PAS) in North America, Latin America, EMEA, and the Asia-Pacific. It profiles the majority of the property casualty policy administration systems available in North America today.
COVID-19’s Impacts on the US Economy, P&C Industry Financials, and Tech Spending
2 June 2020 Donald Light A Time for Optimism or for Pessimism? Abstract What's the outlook for P&C US tech spending in the time of COVID-19? This June 2, 2020 report looks at the three forces that will determine the tech spending: The growth and decline of COVID-19 The impact of COVID-19 on the US economy The impact of changes in the economy on P&C insurers' financial results Subscription required Access to this content requires a Celent research subscription.
Revisiting COVID-19, the US P&C Industry Financials, and Tech Spending
On March 29 I did a webinar on “COVID-19, The Economy, The P&C Industry, and Tech Spending”. The webinar’s subtitle is “Time is of the Essence.” In the webinar I looked at how COVID-19 and the various shelter in place orders were impacting the US economy as a whole, and certain parts of the economy with special importance for the US P&C insurance industry (e.g. new cars, new homes, employed workers).
COVID-19: Impact on P&C Insurers' IT Priorities, Budgets, and Plans
20 April 2020 Donald Light North America Edition Abstract As part of Celent’s continuing coverage of the impact of the COVID-19 pandemic, Celent sent a short survey to a number of North American CIOs on April 16, 2020. Responses were received over the next few days. Readers of this report should keep this timing in mind, since the COVID-19 crisis and insurers’ responses are evolving very rapidly.
COVID-19, The Economy, The P&C Industry, and Tech Spending
30 March 2020 Donald Light This webinar examines the links among three sectors impacted by COVID-19 : The US economy Directional financial results of the US Property & Casualty industry And spending on technology initiatives that are underway now, and that have yet to receive approval. The webinar concludes that time is of the essence.
COVID-19, the Economy, the P&C Industry, and Technology Spending
Donald Light // March 20, 2020 (Image source: Shutterstock.) I am a technology analyst covering the P&C industry in North America. I am not an economist, and I am certainly not an epidemiologist. So why would I be writing a short essay with this title? Because, it is clear that public and private COVID-19 counter-measures will have a material negative impact on the economy. And it is equally clear (at least to me) that a significant economic downturn will hurt P&C insurers’ financial results.
Who Wants Some Equity in an Autonomous Car Start-up?
10 March 2020 Donald Light The answer to the question, posed by the title of this blog, is: quite a few automobile manufacturers, VCs, other investors, and at least one automobile supplier. Most recently Alphabet captured headlines by revealing a $2.25 billion investment in its autonomous vehicle subsidiary Waymo, by a blue chip list of institutional and other investors.
COVID-19, the Economy, the P&C Industry, and Technology Spending
19 March 2020 Donald Light I am a technology analyst covering the P&C industry in North America. I am not an economist, and I am certainly not an epidemiologist. So why would I be writing a short essay with this title? Because, it is clear that public and private COVID-19 counter-measures will have a material negative impact on the economy. And it is equally clear (at least to me) that a significant economic downturn will hurt P&C insurers’ financial results.
Innovation for Operational Efficiency - Notes from the Roundtable
There is a collision taking place between the need to build the firm of the future, and the equally pressing need to cut wasted spend, reduce costs, and focus on value. Over the last few years, many insurers have focused their innovation efforts on building the firm of the future – creating new products, focusing on the user experience and investing in insuretechs.These investments are critical for long term survival.
Property/Casualty Insurer CIO Pressures and Priorities 2020
13 February 2020 Donald Light North America Edition Abstract At the end of every year, Celent surveys insurance company CIOs, asking them about their priorities for the coming year. The survey covered nine topics regarding their plans for 2020: Business goals’ influence on IT plans. Application portfolio plans. IT budgets: IT budget as a percentage of DPW. IT budgets: Change in the IT budget 2020 vs. 2019. IT budgets: Maintenance, replacement, and innovation. Utilization of cloud-based services.
CES 2020: Connected Things
13 January 2020 Donald Light CES is bigger than big, HUGE. By necessity, this is a personal view of CES 2020 . . . focusing on connected vehicles, and connected homes/buildings/factories. Connected Vehicles Fully autonomous vehicles (Level 5) continue to recede into the future. BMW offered rides with in an autonomous vehicle with a safety driver The fully autonomous BMW maneuvered around a small closed track The CEO of VW Autonomy was quoted as saying Level 5 was like going to Mars . . .
Celent at ITC: How Insurtechs and Insurers Are Unlocking Value | Celent
26 October 2019 Donald Light With Insurance Functionality as a Service AND Monetizing Data from Connected Cars and Homes At InsureTech Connect, Celent organized and delivered a four hour session to a packed room. The topic was "Unlocking Value with APIs, Connected Car and Connected Home Data." There were three outstanding panels: Unlocking Value with APIs: Offering Insurance Functionality as a Service.
Good Communication Is Good Strategy
17 October 2019 Donald Light Let’s be honest: The insurance industry has never been regarded as a shining example of communication at its best. That is a problem. There is a solution. Let me explain. In its simplest form, communication is the exchange of information between two parties. The intent of the exchange could be to inform, to transact, to maintain or build a relationship.
The Calm After the Storm of InsureTechConnect 2019
30 September 2019 Karlyn Carnahan, John Barr, Craig Beattie, Michael Fitzgerald, Donald Light, Juan Mazzini, and Tom Scales If you felt a strong wind on Thursday accompanied by a loud sigh, that deep exhale was because Insurtech Connect 2019 has ended. At was a whirlwind two days as more than 7000 attendees were there this year. If the composition was like last year, I’m guessing that more than 4,000 were senior executives of insurers looking for new ideas.
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