The first insurance company in the U.S., The Friendly Society, was established in Charleston, S.C., in 1735, according to the Insurance Information Institute’s insurance handbook, meaning the industry is now nearly 300 years old. But experts at the Insuretech Connect conference in Las Vegas in September said the key to ensuring that a centuries-old industry continues to thrive is by innovating toward the future while holding onto past traditional values.

Given the industry’s long legacy, it makes sense that Ed Majkowski, EY Americas’ Insurance Sector and Consulting lead, sees insurance’s biggest challenge as figuring out how to modernize.

“People have assembled here in Las Vegas. Why? Because they don’t know exactly how to fix the big problem of modernizing,” he said, “of leveraging the latest technology, of stitching all that together and making it work for both a legacy carrier and a new carrier.”

This thought was echoed over and over at ITC as thousands of insurance technology providers, carriers and brokers gathered for three days of panel discussions, breakout sessions and networking.

“Insurance has been an industry so focused on paper and applications that the idea of leveraging data in order to reduce paper, in order to make the process easier and faster, has been incredibly beneficial to the industry,” said Shawn Ram, head of insurance at Coalition. “I think the future of insurance is far more technology focused.”

However, he added that this presents unique challenges due to the industry’s longevity.

“This is an industry that has historically been difficult to innovate in. It’s historically been archaic in some of its processes,” he said. “Much of the insurance industry is not built to accumulate that amount of data, to harness that amount of data and then utilize it not only to improve underwriting but also to improve claims.”

Indeed, ACORD Solutions Group CEO Bill Pieroni said he hasn’t seen enough innovation happening in claims and underwriting, in particular.

“The trend that I’m bothered by is the lack of investment in those two core areas,” he said. “I would really want to encourage innovation and investment in that area. There’s lots of innovation here [at Insuretech Connect], but we need more focus on the core of insurance — particularly underwriting, rating and pricing — and gathering that data from meaningful insight in order to understand what you’re underwriting. Then on the claim side, it’s about trying to manage severity and frequency and improving customer satisfaction from claims.”

Although the need exists for leveraging data to innovate, according to many experts at ITC, one big challenge is that the insurance industry’s data is often stored in many different places, said Mark McLaughlin, IBM’s general manager of insurance.

“If you believe that the industry has to integrate digitally, if you believe the industry has to optimize all of those core systems, well, they all live in different places,” he said. “You need infrastructure that can run across all of those different stacks so that no matter where your data lives, no matter which core systems you’re running, you can connect across all of that with a common set of tools with open standards.”

He said once insurers can implement this infrastructure, they can ensure their data is secure across the board so that if one system fails, there is a backup plan.

Despite this focus on modernization of the industry, however, Pieroni offered a reminder that at its core, insurance is still a people-focused business. To truly innovate, he said, traditional relationships must also be retained.

“When I think about the future of insurance, I think despite the fact that people are talking about digitization of online business models, relationships will persist for the foreseeable future,” he said. “This idea somehow that agents are going away would really be bad news for the industry, because some of the best customers globally with the highest customer lifetime value are in fact buyers of insurance with relationships.”

Bryan Davis, executive vice president and head of VIU by Hub, emphasized that while digitization of a legacy industry can be a good thing, too much of a good thing can also lead to difficulties.

“It’s the gap in what consumers should have for their insurance coverage versus what they end up buying, because, you know, they go out and purchase things digitally, and most of the time, consumers don’t even know what they bought,” he said.

“They’re finding that out at the moment of a claim. So, what has happened is consumers went for ease and couldn’t get advice,” he said.

Majkowski said retaining the industry’s longstanding tradition of personal relationships points to the original purpose of the industry.

“There’s not a CEO in our industry who does not believe that our sector has a very noble purpose,” he said. “It provides insurance for the most valuable thing in someone’s life — their life itself. The large commercial carriers help capital flow and help things move around the world, make the world go, make it better. So, our purpose as a sector is really huge.”

That said, maybe insurers shouldn’t be looking all the way back to the first U.S. insurance company in 1735 for ideas, especially since it went out of business just five years later in 1740, according to I.I.I. Orion180 CEO Ken Gregg reminded insurers holding on to traditional values that it’s also important not to get stuck too far in the past.

“The future’s always out there in front, and the reason being is this is an industry that has to continually innovate,” he said. “If it doesn’t, it’s a dying industry, or it becomes stagnant. Where opportunity lies is when people find ways to innovate.”