OLDWICK, N.J.–(BUSINESS WIRE)–A.M. Best has released two separate special reports, the first examining how key events have shaped the U.S. insurance industry over the past 25 years, and a second that takes a prospective look at the industry. In pondering the years ahead, A.M. Best emphasizes the transformative power of technology and contemplates how insurers in the digital age will be able to keep pace with rapid advancements.

The first report, “The Last 25 Years – A Review,” finds that the property/casualty sector successfully withstood the difficult challenges it faced as it navigated natural disasters such as Hurricanes Andrew, Katrina, and Harvey, man-made catastrophes such as the attacks of September 11, 2001, as well as the ongoing repercussions of asbestos exposures. The life insurance sector 25 years ago was recovering from a series of company failures. At that time, and then again later during the 2008 financial crisis, carriers responded by shifting the risk in guaranteed products to separate accounts (i.e., shifting the risk to the policyholder), de-risking a number of variable annuity offerings, and marginally tweaking their portfolios. Health insurers had to navigate an uncertain legal and regulatory environment through consolidations and acquisitions, which continue unabated.

In “Insurance Industry – Looking Forward,” the second of the two reports, A.M. Best stresses that, to be relevant, insurers have to keep pace with technology, as developments such as artificial intelligence, big data, and the Internet of Things alter the view of what is possible. Historically, change has come slowly in the insurance industry, but some in the industry and some insurtech companies from the outside are providing momentum. The report notes that the growing amount of data already has led to many product innovations for insurers, and as these tools become more robust, the number of targeted and customizable insurance products will rise significantly. This should help insurers improve pricing and risk selection. At the same time, there has been a large increase in alternative capital entering the risk transfer market, a trend that reinsurers hoped was temporary but is here to stay.

As connected technology becomes widely adopted, A.M. Best expects a massive increase in cyber risks— such that, within the next 25 years, cyber liability may become the largest line of property/casualty insurance in terms of premiums.

More than two decades ago, A.M. Best stated: “As the sophistication of the consumer continues to grow, successful companies will focus on using technology to provide ‘best in class’ information, service, and administrative support to improve operational efficiency and to enhance customer access and convenience.” The premise since then hasn’t really changed; the technology has.

To access full copies of these special reports, please visit:

• “The Last 25 Years – A Review”: http://www3.ambest.com/bestweek/purchase.asp?record_code=271318.
• ”Insurance Industry – Looking Forward”: http://www3.ambest.com/bestweek/purchase.asp?record_code=271219.

A.M. Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

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