AI in Insurance
Generative AI: Coming Faster Than You Think
In the decades I've been immersed in technology and innovation, I've never seen anything adopted nearly as fast as generative AI.
While you've been hit in the face for months now with articles about the importance of generative AI models like ChatGPT, and while they aren't always that helpful — "Generative AI is really important"; "Actually, it's really, really important"; "No, it's really, really, really important" — I'm going to risk another one.
I won't get into the broad significance, which will play out over many years and which others are speculating on at great length. But I do think it's worth noting some ways that financial services firms are already taking advantage of the leap forward in AI.
Paul Carroll, Editor-in-Chief, Insurance Thought Leadership
Decrypting AI for insurance | Part 2 [Part 1 published yesterday ]
Part 2: Opportunities of AI in insurance
Decrypting Artificial Intelligence for insurance part 2 looks a the opportunities of AI in the insurance value chain. AI capabilities can improve efficiency.
Predictions of how Artificial Intelligence can change industries – and even lifestyles – rarely fail to inspire. And we have to admit: the idea that AI could take care of some of life's tedious paperwork, allowing us to spend more time doing things we love, is a nice dream.
When it comes to the re/insurance industry, a recurring vision for the future is that AI will potentially enable more precise coverage and pricing adjustments. While this is an attractive long-term goal, let's discuss where AI is delivering benefits today and the opportunities for the insurance value chain in the near future.
Current insurance AI applications are based on a narrow type of Artificial Intelligence.
Pravina Ladva, Group Chief Digital & Technology Officer & Antonio Grasso, Entrepreneur, Technologist, Founder & CEO @dbi.srl, and author
Cognizant Launches Platform to Help Companies Deploy Generative AI
Cognizant announced a new, enterprise-wide platform – Cognizant Neuro AI – designed to provide enterprises with a comprehensive approach to accelerate the adoption of generative AI technology and harness its business value.
“It is fast becoming clear that businesses must embrace AI without delay to remain competitive,” said Prasad Sankaran, executive vice president of Cognizant’s Software and Platform Engineering. “This is an exciting moment, as Cognizant’s Neuro AI platform goes beyond proof of concept, aiming to accelerate the adoption of enterprise scale AI applications, increase ROI potential, minimize risks and get to better business solutions faster.”
The Cognizant Neuro AI platform will guide firms through identifying company specific use cases and operationalizing AI, as well as data engineering and continuous improvement. The platform enables AI and software engineering teams to build flexible, reusable, safe, and secure solutions and design conversational and generative user experiences, embedding AI models to create fully functioning apps – all supported across multi-platform, multi-cloud ecosystems.
Artificial Intelligence Revolutionizes Customer Experience In Insurance
“Artificial intelligence is already part of MAPFRE’s daily life. We have dozens of AI algorithms and use cases, developed in two main aspects: improving the efficiency of our internal processes and the customer experience”, explains Miguel Angel Rodríguez Cobos, Global Head of Innovation at MAPFRE. Process automation and decision making There are two functions that MAPFRE is finding most useful in this area.
On the customer side, customer service is rapidly evolving and responding faster and more accurately to user needs, thanks to artificial intelligence. This is a revolution whose results, due to the learning capabilities on which AI is based, are only just beginning.
Here are two of MAPFRE’s most outstanding projects that show how this transformation of the sector is becoming tangible:
Esencia Project: AI to streamline claims management as much as possible Insurance is an unusual area in that, normally, after paying for a policy, you don’t get a tangible product or service, but rather a commitment that the company will respond should a problem arise. In those moments, the process can become a hassle for the client, and the key to a good solution is that it is simple and fast. With this objective, artificial intelligence is an ideal ally, which can be seen in this project.
When a customer declares a claim, the AI is able to process all the information the user provides: what is communicated in their own words and what images and documents are attached (for example, a quote or Invoice). This allows you to make automated processing decisions.
There will be cases in which the use of AI will lead to immediate resolution of a claim without the need for human intervention, the most common example being a claim in which a customer provides an invoice, and the system verifies that everything is correct, directly authorizing it. pay. In other cases, the AI takes on the task of gathering all the necessary information (asking the customer for missing information) and performing a preliminary analysis, to transfer it to a professional who will already have all the elements to enable the final analysis. To decide In either case, the customer will benefit from a faster resolution.
Three technologies that could drive insurance's 'Blockbuster moment'
It’s not the first time that the insurance industry has been forewarned of a “Blockbuster moment” careening down the tracks, but this time it’s not competing businesses like insurtechs that are keeping one chief innovation officer up at night, rather the rapid pace of technological innovation.
Speaking at an event last week, George Beattie, CFC head of innovation, cautioned of emerging technologies and a ballooning protection gap that could put the entire sector on the back foot.
“We stand on the start line of the new industrial revolution, one that is not defined by one technology, but by several,” Beattie told broker attendees at the 2023 CFC Summit in Chicago. “It’s a really interesting time to be alive, it is going to become harder for companies in our sector and in the sectors that we serve to avoid a Blockbuster moment – the moment at which a company’s products and services are no longer good enough to serve their target demographic and they’re replaced by more agile players.”
Beattie highlighted three technologies that could be set to disrupt the insurance status quo:
News
The U.S. insurance landscape: The good, the bad and the ugly
The insurance industry plays a critical role in safeguarding individuals and businesses against financial risks. Since the turn of the century, rapidly advancing technology has catalyzed permanent changes within the industry and, as a result, has left insurers seeking to manage change on all sides.
With this in mind, earlier this year, AutoRek published its 2023 Insurance Industry Outlook, which sought to examine the good, the bad and the ugly issues facing the industry.
The good news for U.S. insurers is that they report healthier margins than their UK counterparts. Almost three-quarters (72%) of U.S. firms are profitable, compared to just over half in the UK (54%). Over one-quarter (28%) of firms in the US are highly profitable.
However, while U.S. firms might be winning the race when it comes to profitability, that doesn’t mean the road ahead is smooth. There are plenty of ugly bumps and an unhealthy reliance on outdated technology.
Looking back
Over the last two years, the main focus for U.S. insurers has been customer experience, acquisition and retention, as well as back and middle-office optimization.
As with most customer-based industries, the rapid change in customer expectations has been difficult for insurers. The arrival of the SoftBank-backed insurtech Lemonade eight years ago — along with the rise of Amazon — completely overhauled how customers “shop” for insurance and the level of service they expect from their insurance provider. This sparked a riptide of change across the industry and took customer service expectations to levels not previously seen or imagined.
As part of this, firms have recognized the importance of a more personalized, seamless and digitally-driven service and, where possible, have sought to provide this to policyholders.
Piers Williams is the Global Insurance Manager at AutoRek
Progressive out front on commercial auto rate hikes in Q1 2023
The Progressive Corp. continued to increase commercial auto insurance rates during the first quarter of 2023, according to an S&P Global Market Intelligence analysis.
Overall, Progressive and its subsidiaries received approvals for 17 rate hikes across 15 different states during the quarter. The aggregate of the calculated premium change for the filings is $102.5 million.
Progressive County Mutual Insurance Co. received the most significant increase during the quarter with a $68.1 million calculated premium change after a 5.3% bump in Texas. This rate increase went into effect Dec. 21, 2022, for new businesses and Jan. 27, 2023, for renewals and is expected to affect nearly 130,000 policyholders.
Texas regulators busy in Q1
Texas regulators were busy during the first quarter, with the Lone Star State approving 58 commercial auto rate hikes totaling $125.7 million in calculated premium change.
Caliber Signs Enterprise Agreement to License Mitchell Cloud Estimating at All Locations
Mitchell, an Enlyte company and leading technology and information provider for the Property & Casualty (P&C) claims and Collision Repair industries, and Caliber Collision, the nation's largest auto collision repair provider, today announced that they have signed a multi-year, enterprise licensing agreement. The agreement gives all current, and future, Caliber locations access to Mitchell Cloud Estimating, Integrated Repair Procedures, a Paintless Dent Repair (PDR) Calculator and miScore. It also includes enhancements to the company's software solutions and data analytics designed to better assist Caliber in monitoring center performance and meeting the needs of both insurers and policyholders.
"Mitchell's focus on innovation and support of proper and safe repairs are the perfect complement to Caliber's purpose of Restoring the Rhythm of Your Life® for customers nationwide," said Caliber Chief Client Officer, Shawn Hezar. "This agreement ensures that we will continue to exceed customer expectations by delivering safe, efficient and accurate repairs, while also assisting a growing network of carriers with their direct repair programs."
"Transitioning from single-location contracts to an enterprise agreement represents a significant milestone in our longstanding relationship with Caliber," said Debbie Day, executive vice president and general manager of Mitchell's Auto Physical Damage division. "We look forward to working alongside our largest collision repair client as Caliber expands its choice of insurance partners, gains new market coverage and reaches new customers."
Fired Root CMO Accused of Stealing Millions Spends ‘Lavishly’; Judge Appoints Receiver
According to court records, Root Inc’s former chief marketing officer – accused of stealing about $10 million from the company – has not made court appearances, spent money in violation of court orders, and has a bench warrant out for his arrest.
Judge Sarah D. Morrison in U.S. District Court for the Southern District of Ohio on May 10 issued a bench warrant for Brinson Caleb “BC” Silver after he failed to appear in court to answer a motion for contempt filed by Root Inc, parent company of Root Insurance, over Caleb’s alleged violation of a restraining order preventing or limiting him, his companies, or associates from spending money or selling properties or possessions Root said were bought with stolen funds.
Silver, employed by Root from November 8, 2021 to November 9, 2022 when he was let go as part of company-wide layoffs, was unable to get to a May 9 appearance because he was in the United Arab Emirates, according to court documents.
Root alleged in an amended lawsuit filed in February that Silver and others defrauded the insurtech of at least $9.9 million. Root said Silver “misused his position as CMO to steal breathtaking sums from Root through a three-step plan” that included payments to an outside advertising agency. These funds, totaling $13 million, were then transferred back to Silver via via Collateral Damage, a company owned by Silver and/or Silver’s sister Paige McDaniel. That firm then sent funds to others, including Eclipse, another company allegedly owned by Silver, who used the money to purchase luxury real estate in Venice, California and Miami, Florida, Root claims
A Predict & Prevent™ Approach Works When Tech Innovation, Underwriting and Risk Management Work Together
Unlocking the full potential of Predict & Prevent™ strategies takes teamwork.
We need insurers, tech innovators, policymakers, customers and others working together to create, test and launch solutions that stop losses in their tracks. It’s an exciting idea, but how do we make it happen?
Here are my thoughts.
First off, the role of technology innovators is crucial. There is an abundance of insurance technology increasingly capable of analyzing, identifying and quantifying risk in real time. But so far, the primary focus has been on using this data to enhance the efficiency of underwriting and claims.
It’s time to direct these efforts to also include Predict & Prevent strategies.
Insurers see the value in Predict & Prevent and have the power to drive change. They possess the necessary resources and motivation to identify and invest in emerging technologies that can prevent losses on a large scale.
Importantly, insurers can link these solutions with the risk managers responsible for managing these risks within their organizations.
Peter L. Miller, CPCU, MS, MBA, is president and chief executive officer of The Institutes Risk & Insurance Knowledge Group and a member of its Senior Management Team
InsurTech/M&A/Finance💰/Collaboration
Axa Venture Partners to raise 1.5 billion euros for tech
It will keep AVP's current focus on software, fintech, insurtech, digital health and consumer technologies.
Axa Venture Partners announced a new €1.5 billion ($1.6 billion) late-stage fund to invest in European and North American tech startups, targeting companies that expect to go public within three to four years.
French insurance company Axa SA, AVP's biggest source of capital, plans to make a €750 million anchor investment, the fund said in a statement Wednesday. The first closing is expected in the first quarter of 2024, with a final close expected the next year, it said.
Liberty Mutual Selling LatAm Businesses to Talanx for $1.5B
Liberty Mutual and Talanx Group announced that the retail international division of the Talanx agreed to acquire the Liberty Seguros personal and small commercial business in Brazil, Chile, Colombia, and Ecuador.
The joint announcement over the weekend put the purchase price at about EUR 1.4 billion, or roughly $1.5 billion.
Talanx, a major European insurance group based on Hannover, Germany with premium income of EUR 37 billion (or about $40 billion, 2022), operates under a number of different brands. These include HDI, delivering insurance solutions to retail customers and industrial clients, and Hannover Re, one of the world’s leading reinsurer.
Marsh McLennan’s Guy Carpenter to acquire Re Solutions, Israel’s leading reinsurance broker
Guy Carpenter, a business of Marsh McLennan (NYSE: MMC) and the leading global risk and reinsurance specialist, today announced that it is to acquire Re Solutions, the leading independent reinsurance broker in Israel. Terms of the transaction, which is expected to close later this quarter, were not disclosed.
Founded in 2010, Re Solutions combines industry experience with sophisticated actuarial and analytics capabilities, together with a strong reputation for developing innovative, client-focused solutions, including an extensive facultative reinsurance offering. These are delivered by a highly-regarded team of experts based at its office in Bnei Brak. As Re Solutions has been Guy Carpenter’s correspondent broker in Israel since 2011, the transaction builds on the already strong relationship between the two firms.
On completion, the combined entity will be Israel’s leading reinsurance broker, offering a comprehensive range of capabilities, solutions, and advice. It will also provide a platform for Guy Carpenter to provide its full complement of services, including its deep insurtech expertise to the Israeli market, one of the world-leading insurtech and fintech hubs.
As part of the transaction, Re Solutions’ current CEO, Asaf Grinstein, will become CEO of Guy Carpenter Israel, reporting to Dorothée Mélis-Moutafis, Interim CEO of Guy Carpenter Europe, and all Re Solutions’ colleagues will join Guy Carpenter. Mr. Grinstein will be responsible for leading all reinsurance business in Israel, and will collaborate with Marsh McLennan’s other businesses, including Marsh Israel, Mercer and Oliver Wyman.
Recommended Events
The Future of Insurance USA 2023 | June 27-28 | Chicago
We have now confirmed the full speaker line-up: 80+ CEOs, C-Suites and industry game-changers are ready to share their experience and knowledge in a few weeks time.
Insurance is facing a serious profitability crunch, talent shortage, and unsettled customer expectations. In just a month’s time, Reuters Events will gather 450+ industry leaders at The Future of Insurance USA 2023 to help you navigate this challenging environment.
Insurance is facing a serious profitability crunch, talent shortage, and unsettled customer expectations. In just a month’s time, Reuters Events will gather 450+ industry leaders at The Future of Insurance USA 2023 to help you navigate this challenging environment.
Join us June 27-28 in Chicago to benchmark against your competitors and discover new strategies together to ensure your next step is the right one.