AI in Insurance
CCC Introduces Next Generation AI-Based Photo Analysis Capabilities
New Solutions Extend CCC’s Advanced AI to Claims Handlers and Deliver Actionable Intelligence for Early Decision-Making
CCC Intelligent Solutions (CCC), a leading cloud platform for the P&C insurance economy, today announced the next generation of its AI-based photo analysis capabilities, including its first solution that extends into claims handing and ahead of the appraisal process to help users identify potential indemnity amounts earlier.
The offerings deliver actionable intelligence following FNOL, enabling insurers to pull forward key decisions that work to optimize and accelerate downstream processing across APD and casualty claims.
“With its new offerings, CCC is significantly increasing the power of digital photo analysis and delivering meaningful insights across the life of a claim,” said Andrew Schwartz, analyst at Celent Research, a leading research and advisory firm focused on technology for financial institutions globally. “Using its established AI capabilities, CCC can now help insurers make better determinations and decisions earlier, which are essential steps on the path to systematically improve claims cycle times and achieve more straight-through processing.”
New CCC Offerings
CCC® First Look, the company's first solution specifically for claims handlers can help insurers capture accident information sooner on more claims and is designed to ingest photos from various sources – including consumers and salvage providers. AI is applied to validate photos for use with other CCC products and inform optimal routing for each claim, which can support initiating multiple workflows simultaneously, including determining total loss potential, and triaging casualty claims.
CCC® Impact Dynamics applies AI to photos of vehicle damage to predict impact severity, which enables insurers to spot injury potential early and inform a series of important decisions including casualty claims segmentation and routing, early settlement opportunities, and reserve management. Impact Dynamics can help insurers pay what they owe more quickly and efficiently while achieving quicker speed to resolution for injured parties.
Data profiling, machine learning reshaping insurance?
In the data-intensive insurance landscape, significant strides in Machine Learning (ML) and data profiling are driving progress. These technologies enable the anticipation of policy losses and the projection of claim trajectories, offering previously unattainable insights. Unlike conventional approaches, these advanced tools possess the capacity to consider numerous inputs simultaneously, enabling underwriters and adjusters to make informed decisions, leading to improved outcomes for insurance companies and policyholders alike.
This article explores the latest trends in data profiling and ML, highlighting the significant impact these technologies are having in the world of insurance. It will also shed light on how they work together to optimize data-driven decision-making and the challenges faced by insurers in this journey.
What is data profiling?
AI powered underwriting transformation for Commercial, Specialty and E&S Lines
Data profiling is the process of analyzing data to understand its characteristics and structure and is a precursor for successful ML applications. Data profiling tools generate summary statistics, identify gaps, and detect inconsistencies in a dataset, providing valuable insights for data cleansing and normalization. This process ensures that the data used for training and validation is of high quality, thereby improving the accuracy and reliability of machine learning models. Moreover, data profiling helps identify some types of potential bias in the data, enabling insurers to address fairness and ethical concerns in their machine learning applications.
Heeren Pathak Chief Technology Officer, Gradient AI
How AI Is Revolutionizing The Insurance Industry
Rapidly evolving business environments are increasing competition and risk in the insurance sector. Several other challenges, such as theft and fraud, are creating additional hurdles. As a result, insurers are seeking better ways to generate accurate insights from data to enhance pricing mechanisms, understand customers, safeguard fraud, and analyze risks.
The Vienna Insurance Group (VIG) is an industry leader that is addressing these challenges by re-imagining its business—with Artificial Intelligence (AI) as a key enabler.
Judith Magyar, Brand Contributor, SAP
News
American Family Insurance experiences outages, investigating 'unusual activity' in network
Earlier this week, American Family Insurance "detected unusual activity in a portion of our network," according to a statement from the company.
"We quickly took precautionary measures to protect data and resources and shut down several business systems. We recognize the system outages are impacting customers, agents and employees and we appreciate their patience and understanding," the company said in a statement.
"Our investigation into the activity is ongoing and includes internal and third-party experts. To date, we have not detected any compromises to critical business, customer data processing or storage systems, and several components of our enterprise continue to operate without interruption."
The company said it plans to "bring systems back online as we complete our investigative and safeguarding efforts."
9M 2023 global insured cat losses 17% higher than 21st century annual average: Aon
Global re/insurance broker Aon, in its Q3 Global Catastrophe Recap report, has stated that global insured losses from natural disaster events had reached $88 billion by the end of Q3 2023, 17% higher than the 21st-century annual average, driven by so-called secondary perils.
Aon highlights U.S. and Italian severe convective storms (SCS), and the Maui wildfire, as notable events during the period.
Year-to-date, economic losses total $295 billion, compared to a 21st-century annual average of $310 billion, according to Aon.
The aggregated death toll from 2023 natural catastrophe events had breached 75,000 during the same period, making 2023 the deadliest year since 2010.
Michal Lorinc, Head of Aon’s Catastrophe Insight, commented, “Global natural catastrophes killed many people and caused significant structural and economic damage during the first nine months of 2023.
GEICO lays off 6% of workforce, prioritizes return to office
Auto insurance giant GEICO will lay off 2,000 staff, or 6% of its workforce, and has issued a return to office mandate, the insurance company’s CEO Todd Combs said in a letter to employees sent this morning.
Staff affected by layoffs will be contacted today, Combs outlined in a company-wide email that was shared with Insurance Business by GEICO.
“To better position ourselves for long-term profitability and growth, and after a thorough evaluation across all lines of business, we are reducing our workforce by roughly 2,000 associates, or 6% of our total workforce,” Combs wrote to staff. “This will allow us to become more dynamic, agile, and streamline our processes while still serving our customers.”
Those not affected by cuts have been told they will be expected to boost their in-office days, with full implementation of this policy expected to follow from January 1, 2024.
Research
Insurers Prioritizing Profit Over Growth: Exec Survey
Nearly half of 400 insurance executives responding to a recent survey said their current priorities center on improving profitability rather than growing their businesses.
Forty-eight percent of participants reported they are prioritizing profitability, as opposed to 13 percent who stated growth metrics take precedence, according to a report titled “Insurance Operations in a Changing Industry, published today by Earnix, a global provider of intelligent SaaS solutions for insurers and banks.
The survey, conducted by Market Strategy Group, LLC on behalf of Earnix in June 2023, included global insurance executives from the United States, Canada, Europe, and Australia among the 400 respondents whose roles and departments varied among C-level, IT, analytics, product, and underwriting roles. More than half, 241 respondents, are executives for property/casualty personal lines insurers, while 78 represent P/C commercial carriers.
In addition to strategic priorities, survey questions also focused on macroeconomic challenges, climate change, cybersecurity concerns, the effects of post-pandemic workforce dynamics, changing industry regulation, and technology adoption.
Among the key findings on these topics, Earnix reported:
- 35 percent of C-suite executives selected macroeconomic challenges as one of the three top trends impacting their area of the company over the last two years; executives in areas such as actuarial pricing and underwriting selected “growing cyber risks” above macroeconomic trends.
- On a 10-point scale, North American insurers rated the “anticipated significance of climate change on the operations in the next decade” at 8.06.
- Insurers said the ability to attract and retain talent is a significant challenge, with large carriers giving this a score of 8.05 (also on a 10-point scale)
Commentary/Opinion
[Ed. note: insightful and timely] - Israel’s Disproportionate Contribution to InsurTech
An interview with Kobi Bendelak, CEO of InsurTech Israel about the origins and success of Israel’s insurance-focused startup culture.
To say that Israel makes a disproportionate contribution to InsurTech should be obvious. Emerging around 2015 out of Tel Aviv’s larger fintech culture—itself within a larger tech startup environment—Israeli InsurTech has spawned at least six companies that have achieved unicorn status: Lemonade, Hippo, Next Insurance, At Bay, Earnix and Vestoo. (At least one other insurance technology has the requisite valuation but is of older vintage—Sapiens.)
To understand Israeli InsurTech, one has to understand the kind of place Tel Aviv is, says Kobi Bendelak, CEO, InsurTech Israel, a company dedicated to promoting the Israeli InsurTech ecosystem.
“Tel Aviv is a very open place, with a great variety of people living together,” he says. “You can see Orthodox next to gay communities, Arabs in Jaffa living with Jewish people and others. It’s a very warm community where different people can coexist. You can look at it as being like a Western community with Mediterranean style.”
A combination of that open sentiment with good weather, good food and a good vibe in general helps Tel Aviv to be a very creative place. Partly, that’s because such a place attracts talent, and there is an abundance of educated people to draw from in Israel. “We are a small country with a lot of great technology,” Bendelak says. “It’s an entrepreneurial country, with people not afraid to take chances. We have great universities, capital, a global development center and support from the government.”
Anthony O'Donnell, Executive Editor of Insurance Innovation Reporter interviewed Kobi Bendelak, Co-Founder and CEO, InsurTech Israel.
Hard market to persist into 2024, further rebalancing expected
Analysts at RBC Capital Markets expect the hard reinsurance market environment to persist into 2024 as the industry’s resolve to deliver adequate returns remains.
According to RBC, there will be further rebalancing of the insurance value chain between primary insurers and reinsurers as both acknowledge the inequity of how losses were shared in the past.
As evidenced through the changes seen throughout the 2023 renewals, reinsurers are eager to focus on being the shock absorber for large events, and move away from earnings events which they feel should be absorbed by the primary market.
“The 2023 renewals were seen as a step change, and consequently disruptive to proceedings. Heading into 2024, reinsurers’ expectations appear to be better signposted this time,” say analysts.
RBC’s outlook is that the rate increases in 2024 will fall somewhere between flat to +5% on a risk-adjusted basis, accompanied by further fine-tuning of terms and conditions, in favour of reinsurers.
InsurTech/M&A/Finance💰/Collaboration
Lloyd’s lab has supported 100 insurtechs in five years
Insurtechs and key industry figures who have been a part of the Lloyd’s Lab and driving innovation forward in the market gathered in the Underwriting Room earlier this month to celebrate the initiative’s fifth birthday.
Lloyd’s CEO John Neal delivered a speech commending the Lab’s support of more than 100 insurtechs.
“The Lab is definitely one of the things we’re most proud of at Lloyd’s,” Mr Neal said. "It brings people together to solve complex problems and find solutions to help people become...more resilient.”
Established in 2018, with the InsurTech Accelerator as its core program, the startups have raised a billion dollars of collective capital and have a 95% success rate. The Lab has since expanded with Launchpad, Futureminds, and ICX programs.
The global reach of the Lab has also grown, with the most recent cohorts taking on region-specific themes, enhancing collaboration between London insurtech sectors with Europe and Asia Pacific.
An inaugural Lloyd’s Lab Challenge, in collaboration with Moody’s analytics, will focus on developing an emissions accounting solution for the insurance market.
A dozen teams that will make up the 11th cohort of the Lloyd’s Lab were named last month
AI startup helps insurers spot cognitive decline in elderly drivers
Mind Foundry, an artificial intelligence startup vying to help insurers decide which drivers should be covered, has raised $22 million in funding, the latest sign of growing demand to deploy AI in critical sectors where there’s little room for error.
The startup’s AI tools are being used to detect cognitive decline in older drivers in Japan to aid Asian insurance giant, Aioi Nissay Dowa Insurance Co., in predicting and preventing accidents. Aioi invested in the funding round along with Parkwalk Advisors and the University of Oxford, said Brian Mullins, Mind Foundry’s chief executive officer. The Series B round brings the startup’s total funding to $44 million.
Traditionally, insurers have relied heavily on details such as the type of car and the driver’s age to predict who is more likely to be involved in serious accidents — and to set insurance premiums. In recent years, some insurers have leaned on AI software both to expedite settling claims and to analyze driving data to come up with more precise risk assessments for customers. AI’s increasing influence on insurance coverage decisions may worry some, but Mullins said there’s an upside when it comes to seniors.
"If a person is over a certain age, their insurance policy is gone, their independence is gone,” Mullins said. "Not all individuals age the same way. Now data can tell us that the person is driving safely. That’s a responsible use of AI.”
Mind Foundry was founded in 2016 by a duo of University of Oxford computer scientists with the goal of designing "AI for high-stakes applications,” including defense and public infrastructure issues. It began working on the AI product for cognitive decline earlier this year and now wants to take its insurance offering to other geographies.
People
The Hartford Names Stephen Deane Chief Claims Officer
The Hartford has appointed Stephen Deane chief claims officer effective Nov. 6. Deane will report directly to John Kinney, head of Claims and Operations, and will be a member of The Hartford’s executive leadership team. He succeeds Mary Nasenbenny, who will retire at the end of 2023.
“We are thrilled that Steve is returning to The Hartford,” said Kinney. “His outstanding industry experience, established relationships at The Hartford and throughout the industry and proven record of achieving business results position him well to lead our award-winning Claims organization to even greater levels of success.”
Deane returns to The Hartford after three years at Liberty Mutual Insurance, where he served as executive vice president and chief claims officer, Global Risk Solutions, North America. Before joining Liberty Mutual, he gained more than 16 years of experience at The Hartford in various leadership roles, including senior vice president of Group Benefits and Workers' Compensation claims. Prior to that, he was an attorney at Robinson & Cole, LLP, and managed a claims team at Travelers. He holds a bachelor’s degree from the University of Notre Dame and a law degree from the University of Connecticut.
Nasenbenny joined the company in 1999 as legal counsel and was named chief claims officer in 2021.
EMEA
Swiss Re expects up to €5bn new catastrophe reinsurance demand in EMEA - Artemis.bm
Global reinsurance company Swiss Re said this morning that it anticipates rising demand for natural catastrophe reinsurance, with up to €5 billion of additional demand expected for the EMEA regions cedents alone this year.
Speaking during a briefing held in advance of the Baden-Baden reinsurance meetings that begin this Sunday, Thorsten Steinmann, Head Property & Casualty Reinsurance, Northern, Central & Eastern Europe at Swiss Re, explained that the company is anticipating higher demand at the end of year renewals.
Swiss Re itself has an appetite to further grow its natural catastrophe reinsurance book, Steinmann explained this morning.
The reinsurer is expecting inflationary effects to pressure claims costs, while also elevating exposure values as well.
Demand for reinsurance in general is expected to increase, with geopolitical uncertainty and the macroeconomic environment seen as key drivers, Steinmann said.