AI in Insurance
Unlocking AI's Power: Insights From Insurtech, Insurance And Retail
I’m in an omni-channel business that sits in three core markets: Insurtech, retail jewelry and the insurance industry. As a company that started by developing proprietary innovations and leveraging high-tech solutions of all kinds across every aspect of our organization, when artificial intelligence (AI) became more commercially accessible this year, we quickly brought it in to examine and experiment.
In the past, AI solutions were not nearly as accessible for most organizations. Putting the technology into practice required highly experienced teams and large budgets. Solutions that had to be built from scratch.
Today, enterprise AI is much more efficient and its language aspect has evolved significantly. Modern AI, such as ChatGPT, is more capable and practical now. However, I've found that it’s far from perfect and still needs a great deal of human attention to work and do what we want it to do. However, AI is clearly a revolutionary technology.
My experimentation with ChatGPT and other AI innovations at my company has already shown benefits. We now have a better understanding of what the technology currently can and can’t do, what it requires and needs and how it might evolve. Experimenting with it now can give you a greater position to take advantage and prepare for what is likely to come.
An anticipated future for AI in insurance shows promise with predicting AI sensors in cars, homes and other devices that determine risk and adjust insurance costs in real time. While likely about a decade away, AI in insurtech and insurance has great potential across the whole life cycle.
Dustin Lemick is the founder and CEO of BriteCo
Integrating AI into insurance with Capgemini’s Elias Ghanem
"By utilising bots and AI-driven solutions, insurers can proactively engage customers with personalised interactions"
Elias Ghanem from Capgemini explains how AI and machine learning tools are being integrated into the insurance sector and how they can benefit customers
AI and machine learning (AI/ML) tools hold great potential to spark revolutionary changes across the insurance industry.
Areas that AI could improve include risk assessment, underwriting, claims management and customer interaction, to name a few.
With this in mind, InsurTech Digital speaks with Elias Ghanem, Global Head of Capgemini Research Institute for Financial Services, about how AI and machine learning can be leveraged to improve customer experience, as well as the wider insurance sector.
Unlocking AI's Power: Insights From Insurtech, Insurance And Retail
I’m in an omni-channel business that sits in three core markets: Insurtech, retail jewelry and the insurance industry. As a company that started by developing proprietary innovations and leveraging high-tech solutions of all kinds across every aspect of our organization, when artificial intelligence (AI) became more commercially accessible this year, we quickly brought it in to examine and experiment.
In the past, AI solutions were not nearly as accessible for most organizations. Putting the technology into practice required highly experienced teams and large budgets. Solutions that had to be built from scratch.
Today, enterprise AI is much more efficient and its language aspect has evolved significantly. Modern AI, such as ChatGPT, is more capable and practical now. However, I've found that it’s far from perfect and still needs a great deal of human attention to work and do what we want it to do. However, AI is clearly a revolutionary technology.
My experimentation with ChatGPT and other AI innovations at my company has already shown benefits. We now have a better understanding of what the technology currently can and can’t do, what it requires and needs and how it might evolve. Experimenting with it now can give you a greater position to take advantage and prepare for what is likely to come.
Dustin Lemick, founder and CEO of BriteCo, an innovative insurance technology company transforming the retail jewelry insurance experience.
Commentary/Opinion
Why insurers need to raise awareness for certain smart home tech products
Consumers are not aware of the cost saving benefits of these devices.
According to Jeff Wilcoxon (pictured), VP of strategic partnerships at Nationwide, most Americans are unaware of certain smart home devices, mainly water and fire sensors, and how they can both minimize or avoid a loss.
“Consumers have a lower awareness for these devices because they’re not actively thinking of the types of incidents associated with water and fire sensors,” he said.
“They don’t think about the devices preventatively as we would like them to, or how they can benefit them. If the loss event does occur, then we see a lot of higher adoption of those technologies because they don’t want it to happen again.”
In an interview with Insurance Business, Wilcoxon spoke about why the current economic climate can lead brokers to leverage these cost-saving home additions with consumers and how to have those discussions. He also revealed information about Nationwide’s partnership with smart home tech company Resideo.
ESG Watch: Battered on all fronts, insurance industry struggles to rise to climate challenge
Insurance is an essential cog in the global economy, largely unseen but vital to homeowners and giant infrastructure projects alike.
Insurance contracts are like a “permission to act. When you have an insurance company on your side, you can do business,” says Francois Lanavere, head of strategic partnerships at AXA Climate.
But increasingly this vital economic cog is getting squeezed, in large part because of the impacts of climate change.
In a recent report, sustainable investment not-for-profit Ceres explains that the industry is exposed on two fronts – through the assets and activities that it insures, and through its role as a significant investor. And on each front, it faces two risks: a financial hit as climate-exacerbated natural disasters increase claims, affecting returns in the companies it invests in, and a reputational one because of its role in continuing to insure, and invest in, high carbon fossil fuel assets.
According to the European Environment Agency, between 1980 and 2022, weather- and climate-related extremes caused economic losses of assets estimated at 650 billion euros in European Union member states, with more than 110 billion euros of that coming in 2021 and 2022.
While insurers’ role in assessing risk means that they have been aware of the potential impacts of a warming climate for decades, Lanavere says many in the industry still take a short-term view because insurance is delivered through 12-month contracts and underwriting guidelines are reviewed on the same timeline.
News
Despite Hard Market, P/C Combined Ratio Forecast at 104 for 2023
Losses resulting from severe convective storms seen this year are expected to drive the 2023 net combined ratio for the property/casualty industry to 103.8, according to the latest underwriting projections by actuaries at the Insurance Information Institute (Triple-I) and Milliman.
The hard market is expected to continue through 2023, with net written premium growth forecast at 8.3 percent.
The quarterly report, “Insurance Economics and Underwriting Objections: A Forward View”, was presented on Nov. 2, during an exclusive members only virtual webinar.
Michel Léonard, chief economist and data scientist at Triple-I, discussed key macroeconomic trends impacting the property/casualty industry results including inflation, increasing interest rates and overall economic underlying growth.
“P/C growth has improved in 2023, growing 1.3 percent versus 2.1 percent for overall gross domestic product (GDP). While many hurdles could derail such improvements, P/C underlying economic growth is currently positioned to increase faster than overall GDP by 2.6 percent versus 1.7 percent in 2024 and by 4.5 percent versus 2 percent in 2025,” he explained.
Top risk scenarios for 2024 include geopolitics, weakening employment and gross domestic product (GDP) contraction.
Continued momentum in property, but casualty a cloud of uncertainty: Swiss Re’s Ningen
As the property and casualty (P&C) insurance industry meets at the 2023 annual APCIA conference, we spoke with Monica Ningen, CEO of P&C Reinsurance US at Swiss Re, about the state of the market and what to expect heading into 2024.
“From a property standpoint, we have a pretty orderly market,” said Ningen. “Capacity is available at around the right price. So, there’s still price momentum and price movement happening there, and both parties are acting pretty diligently in terms of how they deploy capacity and where they deploy capacity. Ultimately, we continue to see that as a pretty positively developing market.”
Ningen explained that it’s important to consider that for reinsurers like Swiss Re, there’s a need to have an adequate return commensurate with the risk, which itself continues to rise.
“We think there will continue to be this momentum there. It’s not going to be anything like it was in the last renewal season, but we continue to see that evolving positively from a rate standpoint, and primarily driven by the fact that you still see primary companies making significant amounts of rate,” said Ningen.
As a result of the losses that are developing in the property market, currently, the vast majority, if not all lines of business are getting significant rate in the primary market.
Biden wades into home insurance mess
Climate change may be forcing millions of Americans to go without home insurance, as unpredictable weather and intensifying disasters prompt major underwriters to flee hard-hit neighborhoods.
In response, the Biden administration is asking top insurance companies — for the first time — to provide detailed, ZIP code-level data about their policies, claims, premiums and losses from 2017 to 2022, write Thomas Frank and Avery Ellfeldt. See article here
The inquiry aims to identify regions that could lose coverage in the coming years. Treasury Secretary Janet Yellen said her agency will also assess “the increasing impacts of climate change on household budgets” and help officials improve insurance “availability and affordability.”
But House Republicans oppose the effort, as does the insurance industry. GOP lawmakers have introduced two bills that would block the Treasury’s data probe, one of which would gut the Treasury’s Federal Insurance Office altogether.
The Treasury office “is attempting to bypass state insurance commissioners and add massive new costs onto policyholders’ bills through an unprecedented mandatory climate data call,” Rep. Warren Davidson (R-Ohio) said last week.
POLITICO
InsurTech/M&A/Finance💰/Collaboration
The McGowan Companies Acquires Protexure Insurance
The McGowan Companies (“McGowan”), a leading provider of diversified, specialty insurance programs and wholesale brokerage services, has completed the acquisition of Protexure Insurance Agency (“Protexure”), a tech-enabled professional liability MGA (Managing General Agency). The acquisition adds specialized underwriting expertise to McGowan’s national portfolio of insurance programs.
Based in Lisle, IL, Protexure operates a pair of professional liability insurance programs focused on attorney and accountant malpractice for small law / CPA firms and solo practitioners. Since its founding in 2009, the Company has combined experienced underwriting and focused industry expertise to become a leading specialty program for small account lawyers and accountants. Protexure’s parent company, AmerInst Insurance Group, operated as a Bermuda reinsurer for over 25 years.
McGowan, headquartered in Fairview Park, OH, was founded in 1954 and built upon generations of independence. McGowan’s insurance operations and brands offer a comprehensive suite of products and services, including program administration, wholesale brokerage and other insurance / risk management solutions. Today, McGowan is one of the largest nationwide specialty distribution operations in the United States, leveraging technology and distinctive service to underwrite, rate, quote, bind and issue policies on behalf of insurance carriers.
Waller Helms Advisors served as exclusive financial advisor to Protexure and AmerInst.
Veygo by Admiral Elevates Claims Handling Experience with Five Sigma's Cutting-Edge Software as a Service Solution
Five Sigma, a renowned leader in SaaS claims management solutions, is pleased to announce its partnership with Veygo by Admiral, Admiral Group’s short-term car insurance business.
Veygo has selected Five Sigma from Claim Technology’s insurtech marketplace to revolutionise its claims management process. This collaboration empowers Veygo to deliver an exceptional customer experience by dramatically reducing claims handling time.
Five Sigma’s built-in omnichannel communication tool facilitates direct interaction with policyholders through phone, email, SMS, and live video, all within the claim interface. The automation and streamlining of these measures allow Veygo’s claims team to focus on providing faster, more accurate, and personalised service.
Ian Edwards, Chief Operating Officer and Transformation Director at Veygo by Admiral, shared his thoughts, saying, “We were looking for a partner to help us reinvent the claims experience for both our customers and claims handlers. Our vision aligned perfectly with Five Sigma and Claim Technology’s mindset and technology, and we are thrilled to partner with them to deliver a seamless and superior claims experience for our customers.”
Modern Metric unveils Discover, the first insurance platform built for private client agencies
Today, Modern Metric unveils its flagship product, Discover, at the Private Risk Management Association's (PRMA) Summit, a trade show dedicated to Private Client insurance. The commercial launch of this design-forward tool marks a significant milestone for the company, a newcomer to the insurance technology space.
Discover is a comprehensive, user-centric platform designed to address the needs of private client agencies whose high-net-worth clients have more complex insurance needs than most customers.
"We started work on Discover over five years ago for the private client agency we built," said Jon Kelly, CEO of Modern Metric. "It was designed to simplify the sales process so our agents could get more sales in less time and with less effort. We sold over $10 Million in new business using earlier versions of Discover internally."
With an array of features aimed at streamlining client management, collaborating on information gathering, and building thoughtful proposals, Discover is poised to become the go-to solution for insurance professionals with high-net-worth clients.
"One of the biggest challenges private client advisors face is getting on the same page with their clients," said Kelly. "Discover is that page – a place for advisors to work with clients to understand their needs, gather data and quotes, and package everything in a beautiful proposal."
Canada
Wawanesa makes push to grow in Ontario
^^The Wawanesa Mutual Insurance Company (Wawanesa) is focused on further growth in Ontario, where it recently launched a smartphone-based telematics app program called ‘Drive Change’**.
Speaking to Insurance Business, Anna McCrindell (pictured), SVP and chief operating officer – East at Wawanesa, said the mutual is investing in new products and technology to build a more substantial presence in the province.
“We see a real opportunity to show what we can do as a stable, reliable, Canadian-owned and operated mutual,” said McCrindell.
Wawanesa is particularly looking to build on its small commercial and farm insurance businesses, along with its investments in personal lines.
The Winnipeg, Manitoba-based mutual unveiled an advertising campaign last month to make it “the first choice for insurance among Ontario brokers, businesses and consumers.”
“Ontario growth is a key priority for a whole company, and telematics supports that priority. It is also part of our diversification strategy because much of our business, historically, has come from Western Canada,” McCrindell said.