Leonardo Felician has been working in the motor insurance sector for 30 years. He was the former CEO of Genertel and Genialloyd, and is now the visionary CEO behind BeRebel Spa. 

In addition to his entrepreneurial achievements, he is a respected Data Science Professor at the University of Trieste, MIB School of Management and Bologna Business School (BBS). 

Drawing on his unique blend of innovative business leadership and academic excellence, Leonardo Felician shares his insights on the recent changes in the insurance industry, highlighting emerging challenges and opportunities.

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Taking a step back, what was unique about 2023 in the insurance field, and how did it impact new trends and challenges?

In 2023, we observed the first impacts of the end of the pandemic. While its long-term effects initially boosted insurers’ profitability due to reduced driving, 2023 ultimately saw an increase in insurers’ claims ratios. Consequently, every insurance company entered a ‘hard market’ cycle with rising premiums. This shift dramatically changed the business landscape, causing existing customers to switch to other insurers and increasing competition.

Another major trend was the increase in extreme weather events, with 2023 serving as a stark example. Climate change became a major topic of discussion globally, and particularly in Europe. As a result, insurers could no longer maintain the same prices, forcing them to rethink their pricing strategies.

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How do you see new technologies opening up opportunities for innovation and driving growth in the insurance industry?

For CEOs, the primary goal is profitable growth. This has always been the main objective, and technology supports this aim. Achieving profitability is particularly challenging in the insurance industry due to high operational costs. Data, people, and tools are the three key elements for success. 

Data is essential for staying competitive and ahead of the competition. The goal is to outperform competitors by a small margin. While different countries have varying regulations, everyone must compete with their peers. To gain an edge, it is important to utilize data more effectively than your competitors.

In my view, technology not only helps reduce these costs but also plays a crucial role in transforming the competitive landscape by leveraging different data sets. This enables insurers to position their pricing and underwriting strategies more effectively.

With the right people leveraging the right data and tools, insurers can achieve profitable growth. 

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How do you anticipate the actuarial profession will evolve over time, particularly in relation to the integration of data science principles and techniques?

I teach Data Science for Insurance and often speak with young actuaries in the classroom. I am always telling them how fortunate they are because the techniques they learn, such as building Generalized Linear Models, will never become obsolete.

The actuarial profession is secure. What is new is how they will apply the techniques they learn to a broader set of data. The future of the profession involves collecting enormous amounts of data, cleaning it, and applying various models and techniques to this data, including machine learning. The richness of the results and the complexity of the data are much greater than in the past. 

In the company I led, we discovered new data, analyzed it, and used it in our market. Obtaining data is the focus of both IT professionals and data scientists, but analyzing the data is where actuaries come in. Of course, the techniques can be enhanced by machine learning and AI. These technologies weren’t taught in school 20 or 30 years ago because they simply did not exist.  

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In 2023, the insurance industry was transformed by increased losses and climate-related challenges, prompting a reassessment of pricing and competitive strategies. In this challenging environment, innovations in technology and data science became key drivers of growth, underscoring the importance of continuous adaptation and forward thinking in this industry.

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Want to learn more about the evolution of the actuarial profession?

In Akur8’s latest report "Pricing teams in a changing world", 100 insurance pricing professionals worldwide participated in a survey to share their challenges and expectations. 

Download Akur8’s report below: