ACORD Presentation

Federal Advisory Committee on Insurance

Bill Pieroni

ACORD President & CEO

June 1, 2023

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Forms & Standards

800+ forms, 400K elements

Reference Architecture

7 Models & frameworks

Research & Development

20+ Market studies

Training & Certification

3K Validations & sessions

Idea-Sharing Platforms

350+ Standards events

6K+ Regulatory Submissions

7K+ Core systems

400M+ Annual transactions

50+ Years of

Industry Service 36000+ Participating

Organizations 1200+ Standardized

Transaction Types

NUMBERS BY

THE

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Value

Technology

◼ Digitalization

◼ InsurTech

◼ 20-Year Outlook

Execution

R&D: AREAS & SELECTED STUDIES

© 2023 ACORD. All rights reserved.

NUMBERS BY

THE
Technical

Debt

Capability 

Deficiencies

Architecture & 

Infrastructure

Features & 

Functionality

IT Investment

-3σ

μ

μ 3σ

TSR

3σ

ACORD Presentation

Digitalization: Spend & Investment

Source: ACORD analysis 2023 © 2023 ACORD. All rights reserved. Dilutive Accretive

Explicit Implicit
Localized

Digitization

Digital

Aspirations

Digitized 

Firm

Digitized

Competitor

Digital 

Laggard

ACORD Presentation

Digitalization: Scope & Approach

© 2023 ACORD. All rights reserved.

◼ 200 insurers – $3.4T GWP, 61% world

◼ 10 years – TSR, Revenue, EBITDA

◼ Maturity vs. outcomes – implications & imperatives
ACORD Presentation

Digitalization: Selected 10-Year Metrics, %

© 2023 ACORD. All rights reserved.

Premium

7.6

6.1

EBITDA

9.7

-0.7

TSR

326

137

Localized

Digitization

Digital

Aspirations

Digitized 

Firm

Digitized

Competitor

Digital 

Laggard

18

6

48

17

11
ACORD Presentation

InsurTech: Scope & Approach

Trigger Peak Decline Leverage Plateau

Expectation

© 2023 ACORD. All rights reserved.

◼ $50B+ investment since 2012

◼ 2,500+ funding rounds

◼ 100+ technologies
ACORD Presentation

InsurTech: 2012 – Q1 2023 Cumulative Investment, %

© 2023 ACORD. All rights reserved.

➢ 7 discreet factors determine technology viability

. . .required but not sufficient

Solutions 39 End-to-End 61

Carriers/MGAs 41

Distribution 20

Back Office 8

Customer & Policy Administration 2

Claims

3

Service

11

S&D

10

UW

5

Claims

3
Potential

Probable

Inevitable

Knowledge 

Anchors

ACORD Presentation

20-Year Outlook: Scope & Approach

© 2023 ACORD. All rights reserved.

◼ Global survey of 36,000-participant community

◼ Past and future business and technology perspectives

◼ Stakeholder implications and imperatives
Potential

Probable

Inevitable

Knowledge 

Anchors

Data

Network

Computation

ACORD Presentation

20-Year Outlook: Technology Predictions

© 2023 ACORD. All rights reserved.

Interface

ARPANET Internet Sense & 

Actuate IoT Connected Devices RFID

Flat Relational Cognitive 

Automation AI Descriptive Analytics

Predictive

Analytics

Mainframe Mini C/S Edge Cloud Quantum

Command

Line GUI Voice BrainComputer

WebbasedTouch & 

Motion
ACORD Presentation

20-Year Outlook: Technology Predictions

© 2023 ACORD. All rights reserved.

Potential

Probable

Inevitable

Knowledge 

Anchors

Data

Network

ARPANET Internet Sense & 

Actuate IoT Connected Devices RFID

Flat Relational Cognitive 

Automation AI Descriptive Analytics

Predictive

Analytics
ACORD Presentation

20-Year Outlook: Technology Predictions

© 2023 ACORD. All rights reserved.

Potential

Probable

Inevitable

Knowledge 

Anchors

Network

ARPANET Internet Sense & 

Actuate IoT Connected Devices RFID
ACORD Presentation

20-Year Outlook: IoT Overview

>45 Billion 

Devices

~6 devices/person

Decreasing 

Cost

<$0.40 in 2023 to

~$0.01

Source: IoT Analytics; McKinsey; THOMAS; ACORD Analysis 2023

$20T+ Connected 

Economy

Enabled cross-sector 

Economic value

 Acceleration & Velocity  Chemical & Gas  Gyroscopic  Humidity & Hygroscopic  Image & Trace  Infrared & UV  Level & Altitude  Location & Motion  Optical  Pressure & Density  Smoke  Temperature  Vitals  Water Quality

Sensor 

Capability

Data 

Generation

80 ZB annually in 

2023 to 100EB

© 2023 ACORD. All rights reserved.
ACORD Presentation

20-Year Outlook: Selected IoT Use Cases

Agriculture

Automotive

Consumer 

Electronics

Healthcare

Logistics Industrial

Smart Energy

Digital Twin

Wearables

Telecom

IoT

© 2023 ACORD. All rights reserved.
ACORD Presentation

20-Year Outlook: Technology Predictions

© 2023 ACORD. All rights reserved.

Potential

Probable

Inevitable

Knowledge 

Anchors

Data

Flat Relational Cognitive 

Automation AI Descriptive Analytics

Predictive

Analytics
ACORD Presentation

20-Year Outlook: AI Components

Computer science field focused on learning, AI problem-solving, and decision-making

© 2023 ACORD. All rights reserved.

ML

DL

AI subset involving algorithms

to analyze, learn, predict, decide

ML subset using neural networks 

to extract higher-level data features
ACORD Presentation

20-Year Outlook: AI Evolution

AI

© 2023 ACORD. All rights reserved.

2011 Watson wins 

Jeopardy

2022 Chat 

GPT

1950 Turing 

Test

1956 AI 

coined

1986

Backpropogation

1966 ELIZA

NLP

2015

AlphaGO

2012 Siri 

introduced

2017 MSFT 

quantum dev kit

2016 Self-driving 

Uber pilot

2020

Waymo

1997 Deep Blue 

defeats Kasparov
ACORD Presentation

20-Year Outlook: AI Key Enablers

AI

High-performance computing power at scale – hardware, software, architecture

Large, diverse, high-quality data sets – text, image, audio, video, sensor

Recognition, prediction, decision learning algorithms – supervised, unsupervised, reinforcement

Advanced computer & human language interaction– understand, interpret, generate

Human expertise across domains – design, refine, interpret, decide

© 2023 ACORD. All rights reserved.

Regulatory & ethical support – privacy, security, transparency, accountability, impact 
ACORD Presentation

20-Year Outlook: AI Levels

AI

Level 1: Reactive Machines

Specific situations/inputs (computer chess)

Level 2: Limited Memory

Past informs future actions (recommendations)

Level 3: Theory of Mind

Emotion, belief, intention-based prediction (self-driving)

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Level 4: Self-Awareness

Hypothetical: conscious and autonomous
AI

Insight &

Implications

Delivery & 

Execution

Acquisition & 

Synthesis

ACORD Presentation

20-Year Outlook: AI Context

Volume &

Variety

intent capability capability

Velocity &

Veracity

Value &

Impact

© 2023 ACORD. All rights reserved.
ACORD Presentation

20-Year Outlook: Selected AI Use Cases 

Finance & 

Accounting

Product 

Management

Claims Marketing

Policy 

Acquisition & 

Servicing

UW & Risk 

Management

Sales & 

Distribution

AI

© 2023 ACORD. All rights reserved.
Time

Rate of Change

Strategic & Technology Context

Laggards

Leaders

ACORD Presentation

Industry Change Imperative

© 2023 ACORD. All rights reserved.