AI in Insurance
AI and the Future of Insurance
With scrupulous implementation and judicious oversight, AI can supercharge the industry and provide better services to customers.
KEY TAKEAWAYS:
- With many traditional life insurance agents retiring, AI can step into the gap and present customers with the right proposal at the right time.
- AI-powered chatbots can also sweeten the customer experience by providing 24/7 customer service, answering questions and resolving issues in real time.
- Insurance agents can also use AI to refine their messaging process across different media channels, as well as to reduce fraud
Breakthroughs in machine learning and AI mean that insurers can tap into insights from vast troves of data and refine their operations on a more granular level than ever before. Consequently, insurance companies are finding new ways to enhance the customer journey, streamline operations and make better decisions.
Siddhartha Jha, founder, chairman and CEO of Arbol, a global climate risk solutions platform focused on data-driven parametric insurance
Liberate’s Generative AI-Powered FNOL Plugin Revolutionizes Claims Communication
Liberate Innovations Inc. (Liberate) has introduced a generative AI-powered FNOL plugin that promises to revolutionize insurance claims processes by eliminating language barriers and providing more uniformity in customer experiences.
The FNOL AI plugin enables enhanced communication and understanding across all ethnicities with a multi-faceted real-time translation process..
“With the insurance industry’s current talent shortage and declining levels of claims satisfaction, more accessible, efficient and transparent processes are needed,” says Amrish Singh, Founder and Chief Executive Officer of Liberate. “The FNOL is a crucial touchpoint, which is why many insurers are already migrating to di
InsurTech/M&A/Finance💰/Collaboration
Hub raises $6.9B in debt refinancing move
Hub International Ltd. on Thursday said it has raised $6.9 billion in debt to refinance its $6.4 billion term loan debt while its banking group raised the broker’s revolving credit facilities by more than $200 million to increase capacity for additional acquisitions and investments in organic growth.
The deal extends the maturity of the new debt to 2030 from 2025 when the original $6.4 billion was due, a Hub statement said.
In 2022, Hub closed 68 acquisition deals and has publicly announced 22 deals in 2023.
The $6.9 billion issuance was split between $4.75 billion of a new first lien term loan B and $2.18 billion of new senior secured notes and was offered to qualified institutional buyers.
Marc Cohen, president and CEO of Hub International, said in the statement the new funding “greatly enhances our liquidity profile.”
The deal follows Hub’s recent announcement of a minority investment agreement with Leonard Green & Partners, which valued the broker at $23 billion. Hub also “expressed its intention to explore the opportunity to bring on additional minority investors in the coming months.”
Insurance Broker Acrisure Interviews Banks for 2024 IPO
Acrisure LLC, a large, closely-held insurance broker, is interviewing banks to go public next year, people with knowledge of the matter said, in a sign that equity markets may be opening up to new listings from strong companies.
Grand Rapids, Michigan-based Acrisure is expected to be valued at well over $20 billion in an initial public offering, the people said, asking not to be identified discussing confidential information. The company raised $725 million for a $23 billion valuation last year from backers including Abu Dhabi Investment Authority.
Deliberations are ongoing and no final decisions on the size or timing of an IPO have been taken, according to the people. Acrisure could also opt to stay private, they said. A representative for Acrisure declined to comment.
Brokers like Acrisure, which act as intermediaries between businesses and insurance providers, have enjoyed rising revenue because of inflation. That’s because the runup in home prices and other assets that require insurance translate into higher fees for brokers when they connect clients with policies. Brokers including Marsh & McLennan Cos Inc. and Aon Plc have seen their stock price soar in the last 12 months.
Acrisure, which says its platform is powered by artificial intelligence, describes itself as the “fastest growing brokerage in industry history” with $4.1 billion in proforma revenue.
Its move to consider going public hints there may be an end in sight to the slump in the US IPO market, which is on pace for its slowest year since at least 2009. Fast-casual restaurant chain Cava Group Inc. almost doubled in its trading debut this week.
ServiceNow and Guidewire Collaborate to Improve Insurance Experiences
Through the integration, insurance companies can now optimize their claims and other high-impact processes by creating repeatable, automated experiences for handling exceptions.
ServiceNow (Santa Clara, Calif.), a provider cloud-based solutions aimed at defining, structuring, managing, and automating services for enterprises, has announced an integration between ServiceNow Financial Services Operations and Guidewire (San Mateo, Calif.) InsuranceSuite on Guidewire Cloud to improve insurance experiences. Currently available in the ServiceNow Store, the integration extends Guidewire Cloud capabilities for claims, policy servicing, and underwriting onto the Now Platform.
Tammi Shapiro, ServiceNow VP and Global Head, Financial Services Products, ServiceNow
Through the integration, insurance companies can now optimize their claims and other high-impact processes by creating repeatable, automated experiences for handling exceptions that would otherwise drive outsized costs and resolution times, according to a statement from Tammi Shapiro, ServiceNow VP and Global Head of Financial Services Products at ServiceNow.
“Carriers can also use prebuilt insurance process workflows, insurance agent workspaces, dashboards, and process mining capabilities already available in ServiceNow to get to value even faster,” Shapiro says.
Anthony R. O’Donnell, Executive Editor, Insurance Innovation Reporter
News
Insurance litigation increased 30% in 2022
Business liability, hurricane and home insurance cases were the major drivers of the increase.
In 2022, insurance cases litigated in federal district courts increased 30% compared with the year prior, according to Lex Machina. In total, there were more than 18,912 insurance cases litigated in federal district courts this past year.
Overall, $381 million in total damages were awarded across 123 cases in 2022. Business liability, hurricane and home insurance cases were the major drivers of the increase.
Wearable technology and how it's revolutionizing the workers' comp space
This article was produced in partnership with AmTrust.
Desmond Devoy, of Insurance Business America, sat down with Woody Dwyer, director of loss control at AmTrust Financial Services, about the emerging technology that can make workplaces safer and pre-emptively reduce workers’ compensation claims.
Wearable technology the size of a cell phone and smaller can help prevent workers’ compensation claims before they become an issue by providing real-time insight.
A recent webinar by AmTrust Financial Services – available now on demand - helped brokers learn more about the technology being developed, and currently available, that can help their clients keep employees safe, and lessen workers’ comp interactions.
“There’s a wearable sensor that is like the size of a smartphone that you wear,” explained Woody Dwyer (pictured), director of loss control with AmTrust. It sits in a harness or on your belt and “measures a number of things from ergonomic risk factors to ambient temperature to noise.”
For the companies that utilize these wearable sensors, there will need to be accommodations made – such as possibly boosting the power of Wi-Fi on site.
Technology versus the human touch – why it doesn't have to be one or the other
This article was produced in partnership with Duck Creek Technologies.
Desmond Devoy, of Insurance Business America, sat down with Sasha Korol, senior director of research and innovation at Duck Creek Technologies, to discuss the results of a worldwide survey looking at how consumers viewed insurance.
People need people, and a new global survey has found that, when it comes to communicating with their insurance companies, many still want that human touch.
In Duck Creek Technologies’ newly-released “Global Consumer Insurance Insights” survey for 2023, the second-annual report underlined that while technology is here to stay, people still have a massive role to play. The survey found that 44% of consumers would prefer to interact with a human – up from 35% in 2022 – once a policy is in place.
Pennsylvania governor signs insurance data security act
Pennsylvania governor Josh Shapiro has signed into law a bill designed to safeguard the insurance industry from cyber threats.
Pennsylvania Insurance Data Security Act, also known as House Bill 739, was signed last week as Act 2 of 2023 after it passed both the Pennsylvania House and Senate with unanimous, bipartisan support.
Under the new law, insurance licensees, including companies and individuals (with certain exceptions for small businesses), are now required to perform thorough risk assessments to identify potential cyber threats and determine the likelihood and potential damage associated with these threats.
Fitch: US Insurance Market Forecast to Withstand Losses From Large Hurricane This Year
With ample capital, Fitch Ratings’ latest annual ‘U.S. Hurricane Season’ report indicates U.S. property and casualty (P/C) and reinsurers can absorb losses if a large hurricane makes landfall this year.
Hurricane Ian was the only storm to touch down in the US in 2022 but brought sizeable insured losses totaling $60 billion, turning the year into one of the costliest on record.
The homeowners insurance market in Florida bore the brunt, with direct loss ratio climbing to more than 125 percent.
“Several of the largest homeowners’ insurers in Florida have actively reduced policies in force through significant rate adjustments, targeted non-renewals and enhanced underwriting restrictions as a way to manage overall exposure,” said Senior Director Chris Grimes.
In April, the Florida Office of Insurance Regulation levied a 1 percent emergency assessment on all covered lines of business except auto, according to Fitch, in order to secure funds to cover claims payments relating to the liquidation of United Property & Casualty Insurance Company.
Preliminary hurricane forecasts for the year indicate a below average season is expected, “with the probability of a storm hitting the U.S. Atlantic coast comparable to long-term historical averages,” the report stated.
June/July midyear 2023 reinsurance renewals will be challenging for Florida primary underwriters, according to the report, due to increased selectivity and the many companies that have “either partially or completely withdrawn from the property catastrophe market.”
“Sharp changes in reinsurance pricing and underwriting conditions have improved market profit potential, spurring actions indicative of renewed optimism by several established carriers,” said Senior Director Brian Schneider.
Commentary/Opinion
Fortune Favors the Bold, Gen Z Favors the Bold Tech
To welcome this generation into the fold, carriers need to be able to meet Gen Z where they’re most comfortable—in the digital world, and how and when they choose.
Although financial planning—including the purchase of life insurance—is one of the last things on the mind of a Gen Z’er, if started early enough, one can realize its vast benefits down the road. Yet trying to convince the latest generation of adults to apply for life insurance isn’t as simple as getting them to jump on the latest TikTok viral trend. As carriers look to woo the newest wave of customers, it’s critical to have the right tools in place for when individuals start thinking about life insurance.
Andrew Doerman, vice president of digital distribution & strategy, Legal & General America
Canada
iAAH Implements Mitchell Solutions
Mitchell, an Enlyte company and leading technology and information provider for the Property & Casualty (P&C) claims and Collision Repair industries, today announced that Industrial Alliance Auto and Home Insurance, Inc. (iAAH) has implemented its workflow management and collision damage appraisal solutions to help improve claims handling efficiency and accuracy.
The Quebec-based insurer, a subsidiary of iA Financial Group, was founded in 1973 and is a leading provider of auto, property, casualty and liability insurance. After careful consideration, iAAH chose Mitchell's advanced technology solutions to help power its future claim’s ecosystem.
“Industrial Alliance Auto and Home Insurance is committed to simplifying the claims process and supporting our customers through every step," said iAAH Vice President of Claims, Hugo Fortin. "Mitchell's technology enables us to optimize the process, deliver a digital experience and provide our customers and partners with tools designed to streamline auto insurance claims.”
Through Mitchell WorkCenter, iAAH has accelerated claims handling activities including loss profiling with integration, estimating, review and repair management. Now assigning work electronically to its network repair facilities, the carrier has eliminated inaccuracies due to hand-keying data as well as reduced cycle time. Additionally, in just a few days, the insurer’s staff appraisers and partners were able to quickly deploy Mitchell’s appraisal solution—Mitchell Cloud Estimating. iAAH’s appraisal resources can now write estimates from any Internet-enabled device, access integrated OEM procedures, and onboard new network repair facilities faster and more efficiently. The solution’s scalable, cloud-based architecture also minimizes software development and maintenance costs as well as ensures that Industrial Alliance has immediate access to the latest product features.
“We are delighted that Industrial Alliance has selected Mitchell and its technology to meet the auto insurance needs of policyholders in Quebec,” said Debbie Day, executive vice president and general manager of Mitchell’s Auto Physical Damage division. “As the organization grows and continues to optimize its claims process, Mitchell will be there to support iAAH with innovative solutions designed to enhance workflows, automate manual tasks and enable proper, safe vehicle repairs.”