3 Key Takeaways from Insurtech Connect 2024

I had a great time at ITC this year with over 50 meetings and 100 interactions with industry professionals. ITC has truly become the ground zero for insurtech, bringing together innovators, investors, and incumbents in one place. I’ve been attending since the beginning in 2016, and it’s hard to believe how much the event—and the industry has evolved over the years. The conversations this time around were particularly insightful, and I wanted to share 3 key take aways that stood out to me:

One of the most noticeable trends this year was the sheer number of companies branding themselves as AI-driven. It’s clear we’re in a revolutionary period for AI, but the journey is far from complete. Many agencies I spoke with were both impressed and frustrated by AI’s capabilities. They were amazed by how far AI has come, particularly in areas like email review, case triaging, and augmenting human support. These are use cases where AI is already adding tangible value.

However, there was also disappointment regarding the results in other areas, particularly when it comes to customer-facing tasks like handling calls. The issue lies in integration—many of these AI systems are difficult to embed into an agency’s core workflows, and trust remains a significant barrier. For more nuanced interactions, agencies are still hesitant to let AI take over completely.

The takeaway here is that AI holds incredible promise, but we’re still a long way from fully automating complex processes. While AI can streamline certain repetitive tasks, there’s still significant work to be done before it becomes a truly integrated, reliable solution across the board. Thus integrating AI into human workflows is key.

Despite the reduction in the number of deals, there’s no shortage of interest from investors in the insurtech space. VCs and private equity (PE) firms were still very active, closely watching developments and looking for the next big opportunity. Many investors I met have learned important lessons from earlier waves of insurtech, particularly the realization that successful ventures will likely be tech-forward businesses, not just pure SaaS plays.

This shift means investors are focusing more on insurtech businesses that blend technology deeply into their core offerings, rather than standalone software products. It’s becoming clear that future success will come from companies that build scalable, tech-driven infrastructures, enabling them to become new-generation insurance businesses. PE firms, especially, are eager to support these more sophisticated models. Meanwhile, VCs that are open to evolving beyond traditional SaaS-focused strategies are well-positioned to capitalize on this growing space. Even though many of the insurtech’s were in such a category from the beginning, they were treated by VCs like SaaS plays which caused a lot of issues in the crash of 2022.

The key takeaway here is that many of the largest opportunities in insurtech are moving beyond pure software and toward businesses that can use tech to transform the way insurance itself operates, and VCs are learning how to handle these opportunities as such.

In the agency space, there’s no shortage of innovative tools being built, but adoption remains a significant hurdle. While there are plenty of great technologies in development, agencies—especially those in the retail sector—are cautious about embracing new systems. Even with strong technical capabilities, simply building tools isn’t enough to guarantee widespread use, and many solutions struggle with unit economics, making it hard to sustain growth without substantial investment.

Creating a new agency management system (AMS), for example, has proven much more difficult than expected due to complexities around data integration, workflow customization, and, most critically, getting agencies to adopt these new systems. Even the most well-built tools face obstacles when it comes to convincing agencies to change their established processes.

As a result, many of these tools, though highly functional, may not succeed as standalone businesses that attract major VC investment. Instead, they are more likely to thrive as profitable small businesses or, more likely, as pieces of a larger platform through consolidation. This trend is already emerging, and we can expect to see more mergers and acquisitions as companies look to combine forces and provide more comprehensive solutions to the market.

In summary, ITC 2024 underscored the immense promise of AI, but also the practical challenges of integration and trust. Investor focus is shifting toward tech-driven insurance businesses rather than standalone SaaS products, and the agency space is grappling with slow adoption of new tools, despite strong tech innovation. Consolidation seems inevitable as smaller solutions look to integrate into larger plays for long-term success.