AI in Insurance
Generative AI is Coming For Insurance: Celent Report
IIR talks with Celent Analyst Andrew Schwartz about the competitive opportunities and threats from Gen AI to insurers and how to navigate them.
Celent’s report “Generative AI – Mitigating Risk to Realize Success,” introduces the topic saying, “Generative AI is coming for insurance.” The phrase implies both opportunity and threat, which author Andrew Schwartz, an Analyst in Celent’s North American Property & Casualty Practice, fleshes out abundantly in the report. Schwartz notes the sudden and powerful impression made on the world by the debut of Chat GPT in Nov. 2022 and says
, “Artificial intelligence is revolutionizing the way we live and work, and it will profoundly reshape our world by transforming jobs and fostering new industries. From this point forward, it will have a transformative, disruptive impact on insurance operations and technology. - ”Andrew Schwartz, Analyst, North American Property & Casualty Practice, Celent
Generative AI—Gen AI for short—has been a focus for Schwartz to such an extent that he’s become a go-to source on the topic for Insurance Innovation Reporter. With the publication of this extensive report, we sought to have an exchange with Schwartz to call out some of the aspects of Gen AI that we find most interesting and most relevant to our readers.
Insurtechs Cloverleaf, Exavalu & Socotra launched of Ethical AI in Insurance Consortium
Cloverleaf Analytics, the insurance intelligence solutions company, Exavalu, a global digital advisory and consulting company, and insurtech Socotra has launched the Ethical AI in Insurance Consortium.
Cloverleaf, Exavalu, and Socotra are the Consortium’s initial founding members, with additional founding members to be announced.
The group will host quarterly webinars addressing key issues, as well as producing articles announcing new standards guidelines along with thought leadership papers throughout the year (see How Artificial Intelligence Can Help Insurers Reduce the Inflation Impact?).
The Consortium’s core objectives include the creation of ethical technology development and operations guidelines; advocacy for insurers and the insured; collaboration and knowledge-sharing; and standardization.
The adoption of fresh technology is a critical component of any insurer’s strategy for market leadership and differentiation, and it must be done responsibly, with as much knowledge and perspective as possible Michael Benayoun, Director of Partnerships at Socotra
News
Specialty P/C Insurers Outperform Their U.S. Peers: Report
Property/casualty insurers in the U.S. that focused on difficult-to-place risks distanced themselves from their peers in key metrics measuring earnings, underwriting profitability, balance sheet growth and other indicators of success, according to S&P Global Market Intelligence.
Kinsale Insurance Co., the Richmond, Va.-based primary operating subsidiary of Kinsale Capital Group Inc., ranked as the top performing U.S. property/casualty insurer, said the S&P Global Market Intelligence rankings, an inaugural annual report that evaluates the performance of the top 100 net written premium writers in the U.S. for the previous year.
The report said four of the eight top performers specialize in excess-and-surplus lines (E&S) business: Kinsale Insurance, RLI Corp., W. R. Berkley Corp. and James River Group Ltd.
Tesla is working on a new service for insurance customers
Based on a job posting, Tesla may be working on an in-house solution for providing insurance customers with rentals while their vehicles are being repaired.
The automaker/carrier is hiring a project manager, business development in San Jose, California to “support the sustaining of the San Jose rental program launch for Tesla insurance customers.” The individual will be tasked with scheduling customers out of the collision center, communicating rental terms, managing the contracts, billing Tesla insurance and leading all communications with customers.
The listing mentions “a much larger launch” as well as launching “small pilots to determine feasibility.”
Commentary/Opinion
Crash Detection for Auto Insurers and all Policyholders Now a Reality
More great news for the insurance industry from Sfara. Carriers can now create their own competitive response to recent industry announcements. Connected claims for insurance now has a viable path with Sfara’s 3-in-1 solution
A simple SDK integration means carriers can now accelerate FNOL and claims handling by providing high-value, life-saving services that drive customer participation.
Sfara announces with it latest pre-integration, a 3-in-1 solution for insurance carriers to greatly expedite the reality of connected claims.
As recent insurance-industry announcements have made clear, offering free crash detection and professional emergency response to customers is a recognized path to the widespread adoption of technologies necessary for connected claims processing. Yet skepticism remains high within the industry about the feasibility of executing such a program.
Sfara’s 3-in-1 insurance solution puts an end to that skepticism. It introduces crash detection and life-saving emergency response as an offering to the customer. Plus, the solution can improve claims processing from intake to settlement using detailed crash data fully integrated into existing workflows used by industry-leading carriers.
Insurtech Vesttoo's July 2023 Rapid Rise and Fall
As a kid, I loved watching Hogan’s Heros. There are so many funny episodes, I couldn’t choose one to highlight here. The show was set in a German POW camp during World War II and followed the antics of a group of Allied prisoners led by Colonel Robert Hogan. They consistently outwitted their captors and conducted espionage and sabotage missions right under the noses of the German guards. That seems too similar to what has happened to many Insurtechs. They conducted antics under the noses of their investors. Perhaps, far too often, investors and advisors thought they were Sargent Schultz. I see nothing, I hear nothing, I know nothing.
Vesttoo, a Tel-Aviv-based insurtech, was established with the ambitious goal of bridging diverse insurance risk sources with potential investors. Founded in 2018, it swiftly secured $100 million in funding from venture capital firms, valuing the company at a staggering $1.1 billion. The core of Vesttoo’s business model revolved around utilizing letters of credit (LOCs) to collateralize insurance transactions. These LOCs serve as financial guarantees, ensuring payment in case of a default.
However, the company’s trajectory collapsed in July of this year when it was embroiled in allegations of fraudulent collateral, with some estimates suggesting the fraud could surpass $4 billion. These claims originated from a whistleblower who accused Vesttoo of leveraging counterfeit LOCs to back insurance deals. Although Vesttoo initially refuted these claims, they later conceded that a portion of the collateral was indeed fraudulent.
Kaenan Hertz is a professional in the areas of block chain, telematics, wearables, analytics, artificial intelligence (AI) and Insurtech. He has played a key role in innovating many start-ups and established carriers. His advice has been widely appreciated in the financial community, which resulted in multiple quotes and publications in various media
Social Media Investigations Are a Winning Strategy for Insurers
If you’re a plaintiff in an injury lawsuit against your insurer, you might want to ask your wife not to post videos online of you frolicking in a swimming pool.
An Instagram post by a woman that showed her husband, an auto injury claimant, jumping onto a boogie board floating in a backyard pool torpedoed the couple’s injury claims. Both husband and wife had claimed they required spinal surgeries to repair their grave injuries.
“If a picture is worth a thousand words, a video is worth 10,000,” said Joseph Jones, president of Bosco Legal Services in Riverside, California.
Jones and Irene Messina, an attorney for Wawanesa Insurance Co., told the tale during a presentation Wednesday at the Combined Claims Conference. They said social media can be a gold mine for insurers disputing false claims, but information must be collected properly and verified for accuracy to ensure that it is admissible.
Jones said investigations that include searches of social media are usually far more productive than sub rosa surveillance. But he cautioned the claims professionals in the audience that there are pitfalls.
Top 10 Challenges for Insurers
Insurance companies are grappling with a range of challenges that require them to adapt and innovate to stay competitive in the ever-evolving industry. From emerging technologies to changing consumer expectations, insurers are facing a complex landscape that demands their attention. In this article, we will explore the top 10 challenges insurance companies are currently encountering and discuss potential strategies to overcome them.
- Embracing Digital Transformation
- Cybersecurity Risks
- Regulatory Compliance
- Customer Expectations and Experience
- Insurtech Disruption
- Data Management and Analytics
- Talent Acquisition and Retention
- Changing Risk Landscape
- Legacy Systems and Processes
- Competition and Market Saturation
Abhishek Peter is an assistant manager at Fecund Software Services
InsurTech/M&A/Finance💰/Collaboration
The Many Faces of Hippo
It’s been a journey of almost seven years since Hippo , cofounded by Eyal Navon and Assaf Wand, secured its first funding of $14 million. But just as hippos don’t truly swim, startups often veer off expected paths.
“We took everything that’s wrong with the current state of home insurance – the confusing forms, outdated terms, and the middleman agent—and fixed it,” said Assaf Wand, Hippo’s co-founder and former CEO.
Eager to shake up a market riddled with inefficiencies, Hippo’s direct-to-consumer approach garnered support from seasoned fintech professionals, shall we say “outsiders”? The general sentiment? Commissioned agents were causing unnecessary expense. Yet, as Adam Boyden, RPM Ventures’ Managing Director and Board Member noted, “Most people purchase home insurance and forget about it.” This consumer apathy paints a conflicting picture for the industry, highlighting both the profitability from automatic renewals and the challenge to engage customers meaningfully.
Upon its launch in 2017, Hippo’s MGA positioned itself as a superior protection and prevention solution for home and condo owners, starting in California. They diversified their offerings, extending from extensive coverage options to unique perks like a complimentary water leak detector. Policy terms included 4X more coverage for home and computer equipment, coverage for appliances, water backup protection, service line protection and workers’ compensation for nannies, etc. Topa Insurance and Swiss Re can be thought of as initial backers.
FloodFlash partners with Hiscox to accelerate US growth ambitions
Parametric flood insurance company FloodFlash has announced a new partnership with Hiscox to drive its US growth ambitions.
“Hiscox is already an active participant in the US flood insurance market, and as a capacity provider for FloodFlash will support the market appetite for parametric as an efficient option for catastrophe covers,” the flood insurance company said.
It continued, “They join Munich Re, whose parametric expertise Hiscox will complement with market-leading knowledge of launching successful flood products in the US.”
FloodFlash notes that despite the prevalence of flood risk in America, it plays host to the largest flood protection gap in the world.
Top Insurtech Accelerators: Fostering Innovation in Insurance
Taking a look at some of the best incubator and accelerator schemes giving young insurtech saplings the nourishment they need to take root
Insurance can be a difficult world to break into, but, with no shortage of transformation requirements on the horizon, there is always a need for innovative entrepreneurs and insurtech solutions.
Accelerators and incubators provide a perfect springboard for fledgling founders, giving access to investors and allowing space for startups to perfect their business model. Here are some of the top insurtech accelerators currently open to newcomers.
InsurTech Digital
Recommended Events
Insurtech Israel 2023 Global Summit | September, 4-7| Hilton Tel Aviv
Insurtech Israel Summit, the largest Israeli Insurtech Conference and Exhibition to promote and highlight the Israeli Insurtech Ecosystem in the world.
Leading the way in Insurtech technologies panels, lectures, and one on one meetings – all in one place.
Meet innovative start-ups, discover new trends, network with investors and key players, while gaining firsthand insights into the Israeli Insurtech ecosystem -providing an ideal platform for young Israeli companies to make their big leap forward. Join the Insurtech technology community for maximum exposure, and have an all-around good time in the vibrant City of Tel Aviv and Israel, where it all happens.
Meet the Speakers here
More information and Registration here
Canada
Why your P&C employees are leaving you for your competitor
Losing your employees to other P&C firms? Join the club.
A full 38% of financial services and accounting professionals, including within the insurance sector, are already looking or plan to look for a new job before the end of the year, according to a recent Robert Half survey.
If you want to hold onto your top talent, “you have to understand what people’s motivators are to make a move,” said Mike Shekhtman, senior regional director at Robert Half, a business consulting firm.
Companies can do that by making sure their benefits and salaries can compete with what their competitors offer.
According to the survey, financial services employees pursuing other employment opportunities are motivated by:
- Higher salary (55%)
- Better benefits and perks (30%)
- Remote work options (23%)
“Salary over the last two, three years has [become] really important to people,” said Shekhtman. “We know how much pressure families and individuals have had in terms of inflation costs, burdens that come with interest rates, and other external factors.”
Plus, contract work is a viable route for many corporate professionals more generally, with 31% of workers saying they are interested in contract roles in the future.