Commentary/Opinion
Emerging Technologies That Streamline Claims
In an era defined by technological advancements, industries worldwide are harnessing the power of artificial intelligence (AI) to transform and enhance their operations. The insurance sector, known for its extensive web of paperwork and meticulous claims processing, is no exception. As insurers aim to expedite claims approvals and payouts while maintaining accuracy, the spotlight has turned toward emerging technologies.
Amid the buzz surrounding AI, an exploration of its practical applications and limitations becomes vital. To make substantial investments in AI technologies during a time of economic uncertainty, leaders need to be sure that any budget expenditure today can be backed up by tangible ROI in the not-so-distant future.
Looking at processes that have historically been manual and are draining resources is the best place to start when exploring the potential benefits of automation.
Unveiling the Time-Efficiency Conundrum
Claims professionals invest a staggering 12% of their workdays navigating records retrieval. This totals nearly six weeks every year. Such a burden not only complicates the lives of attorneys, insurance brokers and claims experts but also prolongs the resolution of settlements for those directly affected.
It is against this backdrop that the marriage of insurance and AI has gained momentum as a possible way to reduce fraud, accelerate settlements and revolutionize the industry.
Pioneering Efficient Claims Approvals Through Technology Integration
The journey toward seamless and prompt claims approvals requires both technology and human oversight. Insurers are exploring how emerging technologies can not only reduce processing times but also enhance the accuracy of assessments.
The pivotal role of human oversight cannot be overstated, particularly in quality control. Even as AI streamlines processes, human experts remain integral in guaranteeing the precision and fairness of claims evaluations. By combining the speed of AI with the discernment of human intelligence, insurers forge a path toward efficient yet responsible claims processing.
Vince Cole is the CEO of Ontellus
The Future of Subrogation
CCC’s Creators & Innovators blog series features members of our team discussing what excites them most about the work they’re doing and how they’re contributing to CCC’s growth and success. This month, we’re featuring a Q&A with CCC® Safekeep‘s Associate Director of Product Management, Luka Anić, on the future of subrogation.
Golling: Munich Re prepared to give up cyber business over accumulation concerns
Munich Re management board member Stefan Golling has warned that the carrier – the industry’s largest cyber reinsurer – is prepared to exit business within the class that carries potentially systemic exposures.
Speaking on Sunday at Munich Re’s briefing at the Rendez-Vous in Monte Carlo, Golling underlined recognising and understanding accumulation potential as “maybe the most important ingredient” in developing a sustainable cyber insurance market.
“If we as an industry overall don't understand the accumulation, or potentially overexpose our overall balance sheets, the cyber market is dead before it actually has achieved a meaningful size,” he said.
“There are accumulations in cyber that we think we can manage as well as accumulation in nat cat business. But there are also other scenarios that we think we cannot cover, that are too systemic and the insurance industry will not have a solution for.”
Golling clarified that these scenarios are not necessarily cyber-specific, although there is a recognition that cyber as a line of business may make the trigger easier, or escalate such scenarios.
News
California unveils landmark sustainable insurance strategy
It's the largest package of reforms in nearly 35 years.
California insurance commissioner Ricardo Lara has unveiled a package of reforms that aims to alleviate the state’s troubled insurance market, including changes to the FAIR Plan and a deal with insurers that allows more people to transition back to the regular insurance market.
Billed as the largest insurance reform since state voters’ passage of Proposition 103 nearly 35 years ago, California’s Sustainable Insurance Strategy is a comprehensive plan to protect Californians from increasing climate threats while ensuring the long-term stability of the commercial market.
California Governor Gavin Newsom has signed an executive order urging prompt regulatory action to enact the reforms.
Multiple years of losses due to wildfires and other climate change-driven disasters have prompted some carriers to stop issuing new home and commercial property insurance policies in the state, limit their coverage, or non-renew existing policyholders.
AM Best Revises Outlooks to Negative for State Farm Mutual Automobile Insurance Company and Certain Subsidiaries
AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A++ (Superior) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “aa+” (Superior) of State Farm Mutual Automobile Insurance Company (State Farm Mutual) and its affiliates, State Farm Fire and Casualty Company and State Farm County Mutual Insurance Company of Texas (Richardson, TX), collectively referred to as State Farm Group.
The negative outlooks on the property/casualty rating units primarily reflect recent adverse underwriting experience in the private passenger auto insurance line of business and the challenging regulatory environment that have constrained the ability of State Farm (as well as its industry peers) to increase premium rates in a timely fashion, along with continued elevated catastrophe-related loss experience in many parts of the country. The weather-related losses particularly from hurricane, winter and convective storms, as well as wildfires, have put further pressure on the group’s operating performance assessment. The negative outlooks on State Farm Life reflect the negative outlook on State Farm Group, given the consideration of ratings lift for State Farm Life on the basis of implicit support from State Farm Group.
The history of state insurance departments
In 1752, a group of firefighters — which included Benjamin Franklin — founded the Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. They structured the company after the Amicable Contributorship of London, as a mutual insurance company in which policyholders would share risk.
How the modern insurance framework came to be
In 1799, the first U.S. law considering insurance regulation was passed in Massachusetts, which introduced the concept of state supervision of insurance business.
The New Hampshire Insurance Department became the first insurance regulatory agency in the U.S. when it was founded and appointed its first insurance commissioner in 1851. Over the next two years, seven states followed New Hampshire’s example and established their own insurance departments: Massachusetts, Vermont, Connecticut, California, Indiana, Missouri and New York.
The right of states to determine insurance regulation and taxation was held by the Supreme Court in 1869 when it was ruled in the case of Paul v. Virginia that “issuing a policy of insurance is not a transaction of commerce.”
Beginnings of the NAIC
The first meeting of the National Convention of Insurance Commissioners (NCIC) — which became today’s National Association of Insurance Commissioners (NAIC)— was held in 1871 in New York City.
Those at that first meeting outlined their reason for forming with the following: “First, the delegates decided that there were benefits arising from agreements related to the discretionary powers of the commissioners. Specifically noted in this area were agreements related to terms and nomenclature. The second area was legislation. The convention observed that, while it could not enact laws, that it could influence them.”
Along with the formation of the NCIC came the passage of the Reciprocal General Insurance Act in 1871, which served to, “revise, simplify, and amend the laws of this State in relation to insurance, with due regard to the legislation of other States, so as to secure mutual harmony in the promotion of the public interest, to define the relation of the State to companies and individuals, to insure the stability of companies, to protect the interests of the insured, and to encourage the employment of capital.”
The NAIC is governed by the chief insurance regulators from all 50 states, the District of Columbia and five U.S. territories, who coordinate the regulation of multistate insurers.
Amica offers Empathy platform for beneficiaries of life policyholders navigating the loss of a loved one
Amica Insurance, a leader in auto, home and life insurance, announced that it will begin offering beneficiaries of life insurance customers complimentary access to Empathy, the comprehensive support system for loss. Combining technology and human care, Empathy helps families through all the emotional and practical challenges of losing a loved one, with personalized, comprehensive, on-demand support.
"We know the days, weeks and months after a loss can prove to be the hardest to navigate," said Shiela Companie, Senior Vice President and General Manager at Amica Life. "Empathy walks beneficiaries through the process, providing real-time support and guidance on everything from obituary writing to navigating probate and much more. It's the perfect extension of the empathetic service Amica offers our customers and their beneficiaries."
Among other features, Empathy simplifies and streamlines paperwork, helps with funeral planning and estate settlement, and offers Care Managers, who provide families with one-on-one care throughout the bureaucratic burdens of loss, and the emotional challenges it brings.
Autumn is Most Dangerous Season for Auto Accident Damage
Tens of millions of U.S. drivers are heading directly into Danger Season---the time when auto crashes occur most often where they live, CARFAX data shows.
Although many might assume winter is the most accident-prone season, more than 72% of U.S. drivers---roughly 170 million---live in states where autumn is the peak season for accident damage, CARFAX said in a news release.
Why does autumn have so many accidents? Experts call out these reasons:
Diminishing daylight: Fall means shorter days, and that means more driving in the dark, when drivers are twice as likely to have an accident as in daylight. Half of U.S. accidents happen in the dark, but those hours account for only 25% of travel.
Slick surfaces: Wet leaves brought down by storms can be as slippery as ice. Braking on wet leaves can make a car travel more than twice as far as braking on a dry road.
Deer danger: Mating season for deer runs from October through December, and nearly half of deer crashes nationwide happen in just those three months. In addition, one study notes that deer-car collisions spike 16% in the week after the end of Daylight Saving Time in November because of the jump to an earlier sunset.
"CARFAX has the most accident and damage information, and sometimes that data can be surprising," said Faisal Hasan, general manager for data at CARFAX. "The change of seasons is a good time for drivers to see if any new recalls have been issued for their car." Consumers can check on unfixed recalls, for free, at carfax.com/recall.
InsurTech/M&A/Finance💰/Collaboration
Five Sigma and Socotra Forge Strategic Partnership to Bring Modern Technology into a Full Suite Solution
Leading the charge in innovation and modernization, Five Sigma and Socotra are proud to announce their strategic partnership designed to revolutionize the insurance landscape. This collaboration will herald a new era of seamless experiences throughout the entire policy lifecycle.
In a transformative move, Five Sigma, a trailblazer in the insurance sector, has joined forces with Socotra, a renowned core platform provider known for its modern, flexible SaaS insurance system.
This partnership is set to bring forth a “Full Suite” platform solution that redefines policy management, billing, claims handling, and communication within the insurance ecosystem. By merging Five Sigma’s’ cutting-edge claims management software with Socotra’s flexible and innovative core policy and billing solutions, insurers can look forward to unparalleled efficiency, enhanced customer experiences, and an accelerated digital transformation journey.
Key Highlights of the Partnership
Five Sigma’s modern claim technology, integrated with Socotra’s policy solution, enables real-time data-driven decision-making across policy management and claims handling processes.
The result is a seamless and intuitive interface for insurers, policyholders, and claims professionals, delivering modern experiences and improving operational efficiency.
This empowers insurers to adapt rapidly to market shifts, provide personalized offerings, and drive innovation across the entire insurance value chain.
bolttech Receives $50M Series B Extension from LeapFrog
The Singapore-based insurance ecosystem provider will use the funds to support its global growth strategy aimed at closing the protection gap.
Global InsurTech firm bolttech (Singapore) has received $50 million from LeapFrog Investments (London) as an extension of its Series B round. This infusion brings bolttech’s Series B round to a total of $246 million, building on an initial Series B investment of $196 million in May 2023 in a portion of the round led by Tokio Marine. As part of the investment bolttech will appoint Fernanda Lima, Partner and Co-Head of LeapFrog’s Asia Financial Services team to its Board as a Non-Executive Director.
“We are thrilled to welcome LeapFrog as our new strategic investor amidst a challenging economic backdrop for InsurTechs and Fintechs globally,” comments Rob Schimek, Group CEO, bolttech. “We see LeapFrog’s investment as a strong validation of our unique business proposition as we continue to build a better insurance experience and ensure people, especially those in emerging markets, get the protection that they need. We also welcome Fernanda, who will bring an invaluable depth and breadth of diverse experience to our Board. We look forward to working with her as we achieve our vision of connecting people around the world with more ways to protect the things they value.”
Events
Women in Insurance Leadership 2023 | November 14, 2023 | Chicago Marriott Downtown Magnificent Mile
A forum for ideas. A catalyst for advancement.
Shaping the future of innovation and culture for insurance
Every year, Digital Insurance honors the transformative women leaders who are bringing the industry into the connected future with its Women in Insurance Leadership rankings. This iconic program is the inspiration for the WOMEN IN INSURANCE LEADERSHIP conference.
Featuring honoree and CEO roundtables, inspiring keynotes, unique networking moments and so much more, the WOMEN IN INSURANCE LEADERSHIP conference is curated for interactivity and insights. Attendees will walk away with a more advanced toolkit of leadership skills and clearer paths to professional growth. There’s no event like it in the sector.
REGISTER NOW HERE
People
Kemper Wendy Mager Women Insurance Leadership 2023 | Digital Insurance
Colleagues say Mager supports others' work and career development.Wendy Mager takes an approach to management you could call "do unto others": She wouldn't want to be micromanaged, so she gives people runway to do their job in the way that works for them.
"I try to give people a lot of autonomy and delegate," unless there is a performance issue, Mager, who is vice president of operations and systems shared solutions at Kemper, said in an interview. "If they're performing, I won't get very involved. If you need help, I'm all for it. But for the most part, I just let them do whatever they're going to do, because that's what I would want."
What can insurance companies gain from process automation? Learn more about how insurance companies can leverage process automation to drive business growth. PARTNER INSIGHTS FROM LASERFICHE Mager oversees technology and services that are shared across Kemper, including policyholder printing, telephony, mail capabilities and related services. It's her job to coordinate and improve existing capabilities and vendor responsibilities and to identify, address, and improve core capabilities for Kemper. The company, which is based in Chicago, has 10,000 employees and 15 locations. It offers auto, home and life insurance and has 5.3 million policies in force. Mager is one of Digital Insurance's Women in Insurance Leadership honorees for 2023.
People who work with her say Mager is an excellent coach and mentor.
"Ultimately, Wendy is one of the largest reasons that I love my job," said Eric Griffin, director of operational effectiveness at Kemper. "She is challenging yet supportive and a great voice of reason for me and others when working to build an optimal strategy. Her experience has been invaluable in the growth of my career as well as my peers and business partners. She can take on the workload of multiple people at her level while still making time to assist and advise others across our enterprise to improve the way they contribute to our company's success."
If people on her team want to take on something new, she's for it.
"I've seen people do this thing where they know a person's really interested in going to another area and learning and they keep them — 'they can't leave, I need them,'" she said. "But in the end, the person is going to leave anyway because obviously they want to do something different. I like to help them get there, even if it leaves me a big hole."
EMEA
Motor insurance exits due to rising claims will lead to less choice for consumers
Vitality is the latest UK insurer to exit the motor insurance market due to soaring claims costs after RSA left the market in March 2023. If this trend continues, the leading players will become stronger and are likely to face less pricing pressure from challengers. Competition in the market will fall as a result, with negative impacts on consumers.
GlobalData's 2022 UK Insurance Consumer Survey found that Vitality had a negligent share of UK motor insurance, after only entering the market in 2021. RSA was also not a major player in the UK motor insurance space with shares of 0.5% in 2021 and 0.4% in 2022. However, it is a big name in the insurance industry, and the provider ultimately decided it was better off exiting this market to protect its overall combined operating ratio.
That both a large global insurer and one that is trusted by consumers in other lines (health) ended up leaving the motor insurance market is a worrying trend. The moves emphasise just how hard it is to enter the UK motor insurance space in the current climate.