AI in Insurance
How AI is transforming the commercial insurance experience
The commercial insurance landscape is rife with complexities. Every enterprise, large or small, requires insurance coverage. Yet, many business owners find themselves overwhelmed by the intricacies of securing the right policies and navigating the labyrinth of policy terms. Beyond the initial purchase, managing policy changes and renewals can be equally demanding. This leaves both business owners and insurance agents grappling with a cumbersome process.
Agents play a pivotal role in guiding clients through their insurance needs. They often find themselves inundated with numerous client queries. The result? Agents are perceived as mere information gatherers, rather than trusted advisors for policyholders and partners in fostering portfolio growth for insurers.
Fortunately, the advent of artificial intelligence (AI), machine learning tools and large language models are transforming this landscape, granting commercial insurers real-time access to classification and risk-quality data, thereby modernizing underwriting processes and policy management, while offering a seamless, efficient, and improved experience for all stakeholders.
From the initial quoting stage to policy renewals, here are three ways insurers are harnessing AI to bolster the commercial insurance experience:
Prakash Vasant is CEO of NeuralMetrics
News
Allstate, Allianz X Invest $265M in NEXT Insurance and Partner to Expand Reach
NEXT Insurance said Allstate and Allianz X have invested $265 million in the digital small business insurer**.
NEXT and Allstate will partner on bringing new commercial products to what they call an underserved target market of 33 million small businesses. NEXT also entered into a deeper, multi-year deal with Allianz Re.
“Building on our existing support, we are excited to welcome Allianz X and Allstate as investors, deepen our reinsurance relationship with Allianz Re, and foster a meaningful partnership with Allstate to offer millions of their customers our one-stop-shop small business insurance offering,” said Guy Goldstein, CEO and co-founder of NEXT Insurance.
Palo Alto, California-based NEXT said it will provide its products to Allstate customers, “expanding its footprint to even more small businesses nationwide.”
Insurtech NEXT said it just eclipsed 500,000 U.S. small businesses customers that use its proprietary machine learning algorithms to get quotes and coverage, including general liability, commercial property, workers’ compensation, and more.
Research
Agents Expect Looming Recession to Impact Insurance Demand: Report
Insurance agents believe an economic downturn is on the way, with nearly three-quarters of respondents to a recent survey by American Modern Insurance Group indicating they think the U.S. is likely to go into a recession in the next 12 months.
If a recession happens, the agents said they are most concerned about consumer price sensitivity (82 percent) and that consumers might be willing to go without insurance (65 percent). Many agents also worry that insurers might experience a rise in fraudulent claims (49 percent).
The specialty insurer, a Munich Re company, on Thursday released its 2023 Agent Perspectives Report on key issues shaping the personal lines property/casualty marketplace based on results of a recent survey of independent insurance agents across the United States.
“This study uncovers valuable insights from experienced independent insurance agents who are on the frontlines of our industry,” said Andreas Kleiner, president and CEO, American Modern.
“Their perspectives highlight important factors shaping the personal lines property/casualty marketplace, including technology, data security, generational change and the economy.”
Commentary/Opinion
A Moment of Truth for AVs
Cruise's loss of its certificate to operate robotaxis in San Francisco could represent a major setback for autonomous vehicles.
When I first read about an accident involving a Cruise robotaxi that happened in San Francisco in early October, it sounded like a bizarre one-off. In fact, now that more details have emerged, it's clear that the accident represents a real challenge to the near future of all autonomous vehicles.
As originally reported, this was the story:
The accident happened in the central business district at about 9:30 pm on Oct. 2 when a driver hit a woman who was crossing Fifth Street, not in a crosswalk. She was thrown into the path of a robotaxi operated by General Motors' Cruise unit, which was in full autonomous mode. The car hit her and then quickly stopped, with the woman trapped under the car. The robotaxi waited for EMTs to show up and take her to a hospital, where she was treated for multiple trauma injuries. (The driver who hit her first never stopped.)
But that turned out not to be the whole story. When a robotaxi encounters a situation it doesn't know how to handle, it generally pulls off to the side of the road and waits for instructions or assistance. That's what this Cruise AV did -- dragging the injured woman 20 feet in the process, while she was trapped under the left rear axle.
Compounding the problem, the California Department of Motor Vehicles says Cruise didn't initially show authorities the full video from the incident. The DMV says Cruise only showed the seconds leading up to the impact and then the robotaxi stopping -- leaving out the video of the car pulling off to the side of the road while the woman was trapped underneath. Cruise says it showed authorities the full video multiple times.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
InsurTech/M&A/Finance💰/Collaboration
Q3 InsurTech investment surpasses USD1 billion on P&C surge
Global InsurTech funding increased 19.8% quarter on quarter. Early-stage InsurTech funding increased 24.7% from Q2 to Q3. Deal share for US-based InsurTechs at the highest level since Q1 ’20.
Global InsurTech funding increased 19.8% quarter on quarter. Early-stage InsurTech funding increased 24.7% from Q2 to Q3. Deal share for US-based InsurTechs at the highest level since Q1 ’20...Driven by a 25.5% quarter-on-quarter surge in P&C InsurTech investment, new funding for the global InsurTech sector edged past a billion dollars to USD1.1 billion during the third quarter of 2023, up 19.8%, according to the latest Global InsurTech Report from Gallagher Re, the global reinsurance broker.
The rise occurred even as average deal size fell 16.4% quarter on quarter to a six-year low of USD10.3M, and Life & Health InsurTech investment slipped a further 4.5% quarter-on-quarter to USD166.6M.
In line with funding, quarterly InsurTech deal count increased from 97 in Q2 to 119 in Q3, the most since Q3 2022 (140). P&C InsurTech saw 90 deals, and Life & Health InsurTech, 29. Additionally, United States-based InsurTechs saw 55.4% of global InsurTech deal share in Q3 2023 -- the highest level since Q1 2020.
Early-stage InsurTech funding increased 24.7% quarter on quarter to USD269.45M, as the number of early-stage deals rose from 51 in Q2 to 71 in Q3. Meanwhile, average mid-stage Series B and C funding for the year to date fell to its lowest total since 2014, at USD24M. During the third quarter, companies in this category raised USD323.36M – or 29.5% of total InsurTech funding – across 18 deals in Q3.
Elitek Vehicle Services Announces First Phase of Integration with CCC ONE®
Elitek Vehicle Services, an LKQ company, is joining the CCC Diagnostics Network (CCC) to include the reporting automation of remote diagnostic services.
With this integration, customers will be able to view their scan reports and invoices directly in the CCC ONE work file, allowing the shop to save time and effort while standardizing the documentation of work being performed. This can assist customers in reducing cycle time and more easily providing documentation of work performed.
Phase 1 is scheduled to begin on November 14, 2023, with future collaboration and enhancements forthcoming.
"Phase 1 of our integration with CCC ONE® marks a pivotal moment for Elitek Vehicle Services. It's not just about streamlining processes; it's about redefining how we serve our customers in the marketplace." - Don Smith, Senior Director of Elitek Vehicle Services
“We are always looking to expand the CCC Diagnostics Network to give collision repairers more choices for their diagnostics providers,” said Mark Fincher, Vice President, Product Management, Automotive Services at CCC Intelligent Solutions. “Accessing scan reports in the CCC ONE work file has shown to be a great time-saver for thousands of shops, and we’re excited for shops using Elitek’s remote services to see these benefits, too.”
Driver Technologies joins AXA XL Ecosystem as Preferred Partner
Driver Technologies, Inc. (Driver), an AI-based mobility tech company that delivers a safer driving experience, today announced its new partnership with AXA XL , a leading provider of global commercial insurance, to provide commercial drivers its scalable, hardware-free, dash cam and driver safety solution through the AXA XL Ecosystem.
Under the terms of the agreement, Driver Technologies will join the AXA XL Ecosystem as a preferred partner in a network of products and services focused on advancing technology adoption, leveraging data to solve customers' problems, enhancing risk management efforts and supporting Environmental, Social, and Governance (ESG) goals.
Driver's No. 1 rated dash cam app, Driver®, transforms a fleet driver's smartphone into an advanced mobile driving assistance system and dash cam designed to make connected mobility technology more accessible.
"We're excited to welcome Driver Technologies to the AXA XL Ecosystem as the company is addressing the challenge felt by many fleet drivers worldwide who want to reduce equipment costs and installation time of new technology for fleet drivers while maintaining driver safety and privacy on the road," said Rose Hall, head of Innovation for AXA XL's Americas region and co-founder of AXA XL's Ecosystem
Central Insurance Selects Charlee.ai for Enhanced Claim Analytics
Charlee.ai, a leading provider of artificial intelligence for insurers, announced today its partnership with Central Insurance, a leading property and casualty carrier with regional offices across the country. Designed to seamlessly blend into Central Insurance’s workflow, the platform will provide analytics support for its claims professionals at various stages in the life cycle of a claim.
Recently awarded a patent for extracting unstructured data insights using semantic analysis and Natural Language Processing (NLP), Charlee.ai comes with a range of valuable tools, including fund allocation for future claims, fraud detection, accident severity, and legal issue prediction. These features, in addition to adaptable dashboards and a workbench, easily integrate with Central’s workflow as required.
"Charlee.ai will enable us to elevate our customer experience by enhancing our claims processing timeline, underwriting and IT through predictions, KPIs and deep insights,” said Paul Edwards, vice president of claims at Central Insurance. “Its core technology and ability to extract key insights from unstructured data is comprehensive and will strengthen Central Insurance’s claims analytics strategy. We look forward to Charlee.ai’s continued partnership."
Insurance companies rely on critical insights, like forecasts, trends, and internal comparisons, to kickstart their data analysis strategies. Charlee.ai takes it a step further by providing in-depth insights at the claims level, which adds important context to these forecasts. Additionally, the platform incorporates additional data from external data sources and benchmark information, making it even more applicable and valuable for enhancing operational efficiencies.
Innovation
ITC Connect Las Vegas highlights, Day 1
Michael Shashoua, senior editor of Digital Insurance, is reporting on developments from ITC Connect in Las Vegas Oct. 31-Nov. 2, 2023.
Brian T. Casey, partner at Locke Lord LLP, said in an Oct. 31 session on embedded life insurance and annuities that brokers of embedded insurance must watch the laws carefully in their jurisdictions, even for actions as simple as recording chats or sessions with customers. Some states, like California, require that both parties consent.
Dawn Goldbacher, vice president and head of simplified solutions for sales and distribution at Prudential, also in the embedded insurance session, said flexibility is very important, as with waivers of traditional premiums for employees who are laid off. That is because many more workers are now freelancers, so documenting a "layoff" is much more difficult. "How do we serve with features that meet their needs?" she asked.
ITC Connect in Las Vegas continued Oct. 31 with a session sponsored by Celent on underwriting life insurance. Executives from Pacific Life and UnderwriteMe spoke about how the insurer's backing of the technology provider helped its operations, as did executives from TruStage, a life insurer, and EXL, the insurtech management consulting company, discussing their partnership.
Pacific Life sought a way for employees and employers to be able to do more themselves as part of the process of underwriting life insurance, according to Daniel Hermansson, AVP, corporate strategy at Pacific Life. The firm needed a "rules engine that could capture the vast majority of cases," he said.
The challenge that UnderwriteMe had was to "get risk assessed without going through risk requirements," said Brett Laker, head of North America at UnderwriteMe.
TruStage, for its part, needed more technological sophistication and API-based systems. EXL presented them a solution that could be modified to meet changing needs, compatible any integrated apps, said Kelly Davis, senior AVP, new business and underwriting innovation at EXL.
ITC Connect in Las Vegas continued Oct. 31 with a session sponsored by Celent on the use of ChatGPT and large language models (LLMs) in insurance. As ChatGPT and LLMs take hold in the insurance industry, speakers from Microsoft and Centric Consulting said these advances are better for some functions than for others.
Joint EV Trends and Outlook Forecast: BEV sales could reach up to 35% by 2030, 60% by 2035 | AAPEX 2023
At a packed, standing-room-only presentation held at the AAPEX EV Experience Stage, the Auto Care Association and MEMA discussed the findings of their 2023 Joint EV Trends and Outlook Forecast.
According to remarks by Carlos Thimann, partner, and Kunal Arora, director, at Strategy&, part of the PwC Network, EV sales in the new-car market have reached 9% in 2023 and are expected to grow up to 35% by 2030. Despite the growth, EVs still represent less than 1% of the overall car parc and are expected to grow to 10% by 2030.
The four key drivers of EV adoption include total cost of ownership by consumers, regulation, supply-side issues (availability of models) and consumer behavior. These factors play a crucial role in determining the pace at which EVs will penetrate the market.
“We expect a parity of EVs compared to ICE vehicles to come [at] about 2026, 2027,” Arora noted. “The primary driver is the total cost of ownership realized by the consumers… However, regulation plays a key role, especially in the initial stages for the adoption as we are seeing the incentives, the EV mandates being put out by the cities.”
In regard to the aftermarket, Thimann explained, “We are expecting the overall aftermarket size to be $418 million today; growing up to $505 billion by 2030.” This significant growth will largely be driven by the introduction of new parts and technologies associated with EVs. Arora further noted that, “OEMs have announced over 170 new EV nameplates by 2030, which is crazy, but that’s a fact.”
The parts market, representing 50% of the aftermarket, will see significant changes with the introduction of new components and technologies for EVs. New parts, including those related to electrification and Advanced Driver-Assistance Systems (ADAS), will be introduced to the market, impacting pricing and inflationary components. The study identified around 190 parts grouped into 81 product categories that will be affected by the shift to EVs.
Recommended Events
Women in Insurance Leadership | 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 roundtables, inspiring keynotes, interactive workshops, 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 here
EMEA
Discovery Insure and CMT: Safer roads, fewer claims
Over the last decade, the collaboration between Discovery Insure and Cambridge Mobile Telematics (CMT) has contributed to a remarkable 26% reduction in crash-related claims.
Furthermore, clients actively participating in the Vitality drive programme and using a telematics device have achieved an impressive 56% decrease in motor-accident fatalities compared to those who do not utilise such devices.
Reflecting on the 10-year-long relationship with CMT, former Discovery Insure chief executive officer Anton Ossip said, “From the onset, the vision for Discovery Insure was to create a nation of safe drivers. We wanted to make a permanent difference in our consumer base and in society.” Ossip played a critical role, overseeing the CMT partner relationship during his 11-year tenure at Discovery Insure.
Ossip adds that CMT was “the real game changer” that helped Discovery Insure scale its business, which later expanded to markets outside of South Africa, including the UK and Saudi Arabia.