News
The rebranding of insurance claims: how insurers are modernizing a once antiquated process
As the insurance industry continues to navigate the fast-paced digital revolution, the claims process – often considered the true litmus test of an insurer’s value – has come into sharp focus. In the past, this process was a convoluted maze of paperwork, lengthy wait times, and a lack of transparency. However, driven by technological advancements and changing customer expectations, the sector is now on the cusp of a remarkable transformation.
It is an undeniable truth that insurers have had to re-evaluate their claims journeys and processing methods in recent years. This upheaval and re-think have been driven by several factors.
Firstly, the rapid advancement of technology has played a pivotal role in reshaping the claims process, according to Eileen Potter, VP, insurance marketing at Smart Communications. “Insurers are more aggressively leveraging automation, artificial intelligence, and machine learning to enhance efficiency and accuracy.”
Simultaneously, customer expectations have changed dramatically. Dave Connors, founder and CEO of distribind, notes that insurers have had to increase their focus on the customer experience as consumers are less willing to tolerate complex claims journeys. “Insurers have had to focus particularly on the speed of claims settlement and the customer’s visibility of the process between claim and settlement.”
Moreover, Yam Derfler, co-founder and VP of innovation at Air Doctor, said that the Covid-19 pandemic underscored the importance of efficient and agile claims processes, particularly in relation to travel insurance and healthcare coverage. What’s more, the rise of InsurTech companies and innovative startups have disrupted the traditional insurance landscape, intensifying competition.
“These new entrants leverage advanced technologies, data analytics, and customer-centric approaches to deliver superior claims experiences,” he said.
Will S&P Change ‘Negative’ Reinsurance Outlook to ‘Stable’ in 2023?
While no one directly asked the question of this article’s headline at the S&P Global Ratings June annual insurance conference, the prospect that an outlook change is near came into view during the industry meeting.
During a panel on property/casualty sector trends moderated by John Iten, senior director and P/C Insurance Sector Lead, Iten asked Associate Director Saurabh Khasnis to explain why S&P has a negative outlook on the global reinsurance—a stance that the rating agency has maintained since May 2020.
“Although we have our view on the sector as negative, we think that the tipping point is coming sooner for a more stable view,” Khasnis said. “We could revise our view on the sector if the reinsurers maintain discipline in pricing and underwriting,” he added, after explaining that a key reason for the negative outlook was the downward pressure that catastrophe losses have had on earnings and the failure of reinsurers to boost contract prices enough to overcome that impact until recently.
“The industry’s profitability has been below par for the last several years,” he said, noting that losses from the pandemic, Russia-Ukraine loss exposure, loss creep and volatile investment returns all contributed to the fact that reinsurers “failed to earn their cost of capital in five out of the last six years.”
“I’m stressing the catastrophe losses because of impact [they] had on the earnings not just for one or two years. We have seen that for the past six years,” said S&P’s Saurabh Khasnis.
“But the key reason behind the [poor] performance is the natural catastrophe losses,” he told analysts and executives attending the conference. “I’m stressing the catastrophe losses because of impact [they] had on the earnings not just for one or two years. We have seen that for the past six years,” he said, reporting that catastrophe losses have been nearly three percentage points above their reinsurers’ cat budgets in each of those years.
Liberty Mutual to cut 370 jobs in personal, small commercial revamp
Liberty Mutual Insurance Co. will cut about 370 U.S. positions in a reorganization of its personal lines and small commercial insurance business that follows the recent sale of units in Europe and Latin America.
In a statement Friday, the insurer said that effective Aug. 1 its U.S. personal and small commercial insurance business would operate out of its newly formed U.S. retail markets unit. The unit writes nearly $30 billion in premium. It will be headed by Hamid Mirza, who previously was president of global retail markets, which has been disbanded.
Asian personal and small commercial business will be housed in its Asia retail markets unit, along with specialty lines and reinsurance operations in the region. Defne Turkes will continue in her role as president of Asia retail markets, the statement said.
In addition, the insurer formed an enterprise transformation and solutions function, which will look to improve efficiency and operations, the statement said. Jim MacPhee, who was president of global retail markets, will head the function as chief operating officer of Liberty Mutual.
InsurTech/M&A/Finance/Collaboration
Tractable AI raises $65M in Series E funding led by SoftBank Vision Fund 2
Investment to power next-generation AI for instant visual assessments within the automotive and property ecosystems
Tractable raises $65M Series E round led by SoftBank Vision Fund 2, with participation from existing investors Insight Partners and Georgian.
Tractable’s AI automates the insurance claims and damage assessment process, enabling real-time condition assessment and accurate repair estimates based on images captured via smartphone
Working with leading P&C insurers, automotive and property companies, this investment will accelerate Tractable’s expansion across the auto and property ecosystems to apply AI to cars and homes that need to be repaired, protected, recycled or sold.
Today’s investment represents the latest milestone in Tractable’s growth journey. The company recently brought on Venkat Sathyamurthy as Chief Product Officer(formerly head of platform at Adobe), Mohan Mahadevan as Chief Science Officer (formerly computer vision lead at Amazon) and Andrew Shimek as President to oversee global operations and sales.
Tractable will use the new funds to accelerate its research and development capabilities, creating new features that power the end-user experience to provide instant, comprehensive and integrated vehicle assessments. Since its Series D funding round in July 2021, Tractable has continued to grow its product offerings and secure global industry-leading customers, working with top P&C insurers, including American Family Insurance and Aviva, as well as leading automotive companies in recycling, repair and retail. The company now processes more than $7 billion in annualized auto and home repairs and acquisitions, more than doubling the volume of claims processed by Tractable compared to one year ago.
Alex Dalyac, CEO and co-founder of Tractable, said: “Tractable’s AI has helped millions recover faster from accidents and natural disasters. In SoftBank we have a partner who understands the full application set of our technology at a granular level, combined deep networks within the insurtech, automotive and property sectors. I’m excited by what we can achieve in redefining trust and transparency to support people in managing the life cycles of their cars and homes.”
Blink Parametric doubling workforce: expansion in Cork to revolutionise InsurTech sector
Blink Parametric, an innovator in the InsurTech sector, and CPP Group, an assistance firm powered by technology, have each made a significant impact in their respective domains. Blink Parametric, a Cork-based company, is a pioneer in creating simple, intuitive and transparent parametric insurance products.
Tensorflight and Socotra join forces to set a new standard for the property insurance industry
Tensorflight, a leading computer vision, property data, and insights provider has joined forces with Socotra, a company providing a modern, cloud-based platform for technology-driven insurers.
Socotra’s platform allows insurers to create and manage products across the entire insurance lifecycle, from underwriting to claims, using a flexible and scalable architecture.
As part of the partnership, Tensorflight will join the Socotra App MarketPlace which enables insurers to easily add new solutions and services in minutes. The marketplace also serves to accelerate time-to-market while modernizing every aspect of the insurance value chain, from user experience to underwriting and claims.
The partnership between Tensorflight and Socotra aims to set a new standard for the property insurance industry by combining the best of both companies: a modern and flexible platform for insurance product development and management, and a powerful and reliable source of property data and insights facilitating better insurance risk assessment and pricing.
Tensorflight uses three sources of imagery – ground level, aerial, and state-of-the-art satellite images – as well as data from public, contributory, and proprietary sources to provide detailed coverage of 99% of properties in developed countries. Using AI and computer vision, Tensorflight can automatically assess a range of property attributes and characteristics to enable insurers to perform more accurate and efficient analyses on properties at scale. Tensorflight has joined forces with Socotra to allows insurers to create and manage products across the entire insurance lifecycle
InsurTech Profile: Goose Insurance Seeks to Remove Barriers in Personal Lines
Omar Kaywan says lack of education, awareness, accessibility and affordability are the key factors in being underinsured. His company, Goose Insurance, is aiming to change that by removing barriers to entry in the personal lines space.
Kaywan, Goose’s co-founder and chief growth officer, describes the InsurTech as “an insurance super-app” for consumers in the U.S. and Canada to discover, learn about, and purchase personal lines of insurance. It operates in life and accident as well as property/casualty insurance.
“Goose is on a mission to make insurance accessible, affordable, and convenient,” he says. “You should be able to protect yourself, your loved ones and your belongings the same way as you hail a ride, order food or shop on your phone.”
With this in mind, the InsurTech’s goal is to turn every mobile device into an insurance storefront, he says, in which consumers can protect themselves financially in a simple, accessible way. The company doesn’t operate as a comparison site, but rather as a one-stop shop for life, renters, or travel insurance, as well as other lines of coverage. It works to build bespoke co-branded policies with carriers for each policy type.
“This strategy also builds a strong relationship with the carrier as they are getting 100 percent of the risk while the consumer is buying a policy not just based on price, but rather the coverage they need,” Kaywan says.
Insurtech Koop Technologies Raises New Funding to Scale Distribution
Insurtech Koop Technologies raised new funding from top-tier technology investors, led by Alley Robotics Ventures, to scale the distribution of its proprietary insurance products and risk-control tools for robotics and autonomous vehicle risks.
Koop Technologies ("Koop"), an insurance technology company focused on the robotics ecosystem, has announced new funding to scale the distribution of its flagship insurance program in partnership with Lloyd's of London and several world-class insurance carriers.
Koop will use the new capital to promote its products across multiple distribution channels and invest in further product development. The round was led by Alley Robotics Ventures, a New York-based investor focused on transformative ventures in the field of robotics, with participation from Fusion Fund and existing investors Ubiquity Ventures, Bee Partners, WestWave Capital, and Sure Ventures.
Broker M&A deals fall in first half | Business Insurance
Mergers and acquisitions among North American insurance agents and brokers fell to 359 in the first half of the year, down 24% from the same period last year, as higher interest rates increased the cost of deals for many acquirers, according to Optis Partners LLC.
The total number of deals was the lowest first-half tally since 2020 but equaled the five-year average, the Chicago-based investment banking and financial consulting firm said in a report Monday.
The drop followed an 8% decrease in deals in the second half of 2022.
AI in Insurance
How insurers could use AI to attract younger customers
As industries adapt to younger, tech-native generations entering the economy every day, it becomes more imperative that companies learn how to attract young new customers.
An increasing number of people are now more likely to switch insurance providers for more digital options, insurance companies are embracing cutting-edge technology to appeal to the tech-savvy Gen Z and Millennial customers.
With digital expectations at an all-time high, insurers are turning to innovative solutions to cater to the needs and preferences of their younger customers. For this reason, the insurance industry has already begun to see a rise in tech-driven innovation that will reshape the insurance landscape as we now know it.
How AI is helping
As the insurance industry looks to digitize, AI is empowering companies to shake up legacy systems and complex traditional business processes that have plagued the industry for so long. As AI becomes more mainstream, more consumers have come to trust and even expect these solutions. For instance, when it comes to auto claims in particular, 79% of consumers trust an entirely AI-powered process.
Insurance companies are infusing AI into every aspect of the business from chatbots and virtual assistants to completely touchless claims processes start to finish. However, the biggest driver when it comes to the use of AI to attract young people is the ability to personalize each experience. Using AI, companies can collect and analyze customer data to provide tailored offerings and targeted promotions based on customer behavior, preferences, and risk profiles. This resonates with Gen Z and Millennials who value personalization specific to their unique needs.
Bill Brower, Vice President Industry Relations, Solera
'Adversarial machine learning' & other potential AI risks
Accompanying the growing adoption of artificial intelligence at organizations of all sizes are growing risks posed by adversarial machine learning (ML), according to Swiss Re’s latest SONAR report.
Adversarial ML, according to Swiss Re, is a “threat that encompasses any targeted exploitation or hacking of AI systems, leveraging ML-specific vulnerabilities.”
These vulnerabilities are presenting new risks for insurers and policyholders, Swiss Re noted, adding in the report that hackers can trick ML models into making mistakes or leaking information. ML Models can have their training data corrupted.
In addition to cyber insurance, adversarial ML and the failures that follow an incident could trigger claims in professional indemnity and E&O lines. Further, the theft of an ML model could result in the loss of intellectual properties, and in a worst-case scenario, they could cause accidents that led to casualty claims.
Generative AI meets underwriting in Send Tech’s new Smart Submission
Leading InsurTech firm, Send Technology Solutions, widely recognised for its innovative solutions in the insurance industry, has announced the launch of its newest product, Smart Submission. This latest addition to Send’s portfolio leverages the power of generative artificial intelligence (AI) to automate the submission process for underwriters.