AI in Insurance
Three Benefits and Three Challenges of Implementing AI in Claims Management : Risk & Insurance
Many claim handlers are already using AI in their processes to some extent, but realizing its full potential could be hampered by a lack of tech talent and access to adequate data.
Insurance carriers and TPAs are increasingly looking to artificial intelligence to enhance their claims management efficiency and fraud-detection efforts.
AI has the power to collect, organize and analyze claims data in a fraction of the time it would take an adjuster. It can also spot red flags and identify patterns suggestive of fraud. These applications promise to hasten claim resolution, save costs and improve both client and adjuster satisfaction.
But as technology advances, there remains much work to be done in understanding and implementing AI and effectively reaping the benefits it has to offer.
“Where AI can really be helpful is allowing claims teams [to] better digest, analyze and track information,” said Marc Rothchild, senior vice president and head of claims and Xceedance.
Research
Top 50 Claims Insurtech’s to Watch | Reuters Events Insurance Report
50 Leading Insurtechs --- 5 Core Claims Areas --- 1 Report
Produced in conjunction with our flagship conference Reuters Events: Connected Claims USA 2024 (Austin, Nov 12-13) this report compiles 50 of the most innovative Insurtechs in the US claims marketplace.
Looking for a specific tool? Have a niche challenge to solve? Keen to expand your ecosystem? Or just looking to get more of a grasp on the market?
Download the report by filling out the form on the right >>>
Showcasing market disrupters across five core claims areas in need of innovation:
- Claims Management
- Customer and Employee Experience
- Digitalization, Platform Modernization
- Risk Mitigation and Claims Prevention
- Payment Solutions
New Conning Study - Insights on AI and Transformative Technology
The insurance industry continues to adapt and find opportunities for technological transformation utilizing Generative AI. Developing and piloting these technologies will require significant investments in time and resources. This will apply upward pressure on expense ratios over the near-term with Generative AI driving the shifts in the type of staff and positions needed to run a modern insurance company.
Amidst that background, Conning Insurance Research conducted its Annual Survey of C-suite executives and decision makers on AI adoption in the insurance industry. It published the results in a new study: "Transformative AI Technology: Insights from Conning's Executive Survey."
"This is our second-year surveying industry executives on technology transformations and this year's results show 77% of the respondents indicated that they are in some stage of adopting AI as part of their value chain, this is up 16 percentage points from 61% in 2023," said Manu Mazumdar, a Director and Head of Data Analytics and Insurance Technology in Conning's Insurance Research group.
"Insurers are adapting, developing, and piloting innovative AI applications in pursuit of greater efficiency to drive customer and distributor satisfaction. In addition, insurers have access to a wider and larger selection of data than ever before and AI is a crucial technology in managing that data," said Scott Hawkins, a Managing Director and Head of Insurance Research at Conning.
This latest focus report analyzes the responses from C-suite respondents combined with Conning's insights into the intersection of AI and the insurance value chain. These insights highlight how AI is reshaping the insurance industry and the opportunities and challenges that come with this technological transformation.
71% of insurance industry decision-makers dissatisfied with level of effort to get updated insurance programs off the ground and launched digitally
Sure, the insurance technology leader that unlocks the potential of digital insurance, today released the 2024 State of Digital Insurance Report, revealing widespread dissatisfaction with a core part of the insurance ecosystem, legacy rate service organizations (RSOs). Hundreds of insurance industry decision-makers were surveyed to dive deeper into the current state of the digital insurance landscape, as well as the challenges of getting insurance programs off the ground and launching them digitally. As the embedded insurance market is expected to exceed $70 billion by 2030, this new research reveals interesting insights about the tools that insurance professionals are using to meet this demand, as well as the difficulties posed by legacy RSOs in the process.
Sure's 2024 State of Digital Insurance Report reveals widespread dissatisfaction with a core part of the insurance ecosystem, legacy rate service organizations (RSOs). High cost, high pain
Not only are the current options for launching insurance programs time-intensive and massively complex, they're also highly expensive. 75% of respondents noted that their companies spend at least $1 million annually to execute these programs — and 31% report spending $10 million or more. Despite all of this investment of financial resources and effort, only 12% of respondents are very satisfied with legacy RSOs. Further, when asked what they are least satisfied with, respondents cited effort (46%) and flexibility (31%) despite both also being their top two priorities.
InsurTech/M&A/Finance💰/Collaboration
Tensorflight and NEXT Insurance partner to bring advanced property analytics to the small business insurance market
Tensorflight, a property intelligence platform, has announced a collaboration with NEXT Insurance, a leading technology-first small business insurer, to automate commercial property inspections.
The collaboration aims to automate commercial property inspections, leveraging Tensorflight’s property data and risk models to enhance NEXT Insurance’s commercial underwriting process.
Through the partnership, NEXT Insurance seeks to maximise digital innovation to transform the purchasing and servicing experience for small business owners.
Tensorflight’s advanced property analytics will enhance NEXT’s risk management strategies, leading to faster and more accurate underwriting and pricing. The firm’s advanced machine learning models provide unique visibility into property risk factors, which, when integrated into NEXT’s digital solutions, will benefit both new and existing small business customers with faster, more tailored coverage and risk management.
The move supports Tensorflight’s goal of working with innovative insurers to bring advanced analytics across the policy lifecycle, ultimately helping carriers like NEXT achieve profitable growth through more accurate pricing segmentation.
Lance Poole, Head of Risk at NEXT, stated, “NEXT is strategically focused on maximising digital innovation to transform the purchasing and servicing experience for small business owners, so we’re thrilled to partner with Tensorflight. Its advanced property analytics will enhance and strengthen our risk management strategies, while also improving the customer experience through faster, more accurate underwriting and pricing.”
Jesse Canella, CEO, Tensorflight, added, “NEXT is one of the most forward-thinking and fastest growing commercial insurers with a clear focus on technology to better serve small businesses. This agreement modernises the way small commercial businesses interact with insurers at the point of quote. It demonstrates the value of Tensorflight’s property analytics in enabling a next generation insurance experience for small businesses.”
Commentary/Opinion
After Slow 2023, M&A Activity Expected to Ramp Up This Year
More acquisition opportunities and continued competition across the market is expected in 2024, according to a new report, the “2024 Insurance M&A Outlook,” by Deloitte.
Property/casualty mergers and acquisitions in the U.S. and Bermuda took a dip in 2022 and 2023 with 38 deals and 35 deals, respectively.
As future opportunities take shape, an important consideration will be the corporate minimum tax requirements now in place in parts of Europe and Bermuda.
Generali CEO Says Insurer Has Financial Strength for M&A Deals
Italian insurance giant Assicurazioni Generali SpA has the financial means for acquisitions that fit its template for value creation, according to Chief Executive Officer Philippe Donnet.
“We are considering very strict discipline for M&A which allows value creation,” Donnet said in an interview with Bloomberg Television on Tuesday. The company will look at targets that have a strategic, financial and cultural fit, he said.
Donnet declined to comment on specific targets, following reporting by Bloomberg last week that the Trieste-based group was looking at potential acquisitions, with some valued at more than €10 billion ($10.9 billion).
Generali CEO’s Strategic Wishlist Includes €10 Billion Deals
Shares in Generali rose on Tuesday after fourth-quarter earnings beat estimates and the firm announced an increased dividend. Generali has the financial strength if deals arise, Donnet said at a press conference.
The Italian insurer has more than half a dozen firms on its wishlist, including large ones such as Aviva Plc and smaller rivals like Uniqa Insurance Group, people familiar with the matter said earlier. Italy’s biggest insurer has also studied the possible merits of a deal with NN Group NV, a Dutch insurer with a market value of about €11 billion.
Last year, the firm agreed to acquire a group of European businesses from US insurer Liberty Mutual Holding Co. for €2.3 billion and Cathay Life unit Conning Holdings Ltd.
Tough Times Call for New Priorities for P&C Personal Lines Carriers
It has been quite a year for property & casualty personal lines carriers in the U.S., and the implications are showing in their strategic priorities for 2024. Last year, ReSource Pro’s Strategic Initiatives research revealed the key business drivers for technology investments: customer expectations and growth. A year later, the focus for 2024 is business optimization and pricing precision.
There was also a sizeable increase year-over-year in the number of respondents who reported being in the survival stage of their transformation, rising from 5% to 25%.
How will 2024 play out for property & casualty personal lines carriers? There are too many factors beyond the industry’s control to be sure, Mother Nature being at the top of the list. However, our research confirms that industry leaders are making significant shifts in their priorities to weather next year’s storms.
You can learn more Here
Meredith Barnes-Cook, Resource Pro Consulting
Private Equity's Hot New Investment: Suing Insurers | Insurance Thought Leadership
While legal system abuse has long been a problem for insurers, private equity and AI are taking the problem to a whole new level.
Several years ago, I took my daughters on a tour of Civil War battlefields so the younger one could search for ideas for her senior thesis. She came away with a great idea that helped her get an "A." I came away thinking: Holy smokes, there are a lot of personal injury lawyers in Alabama, Mississippi, Kentucky and Tennessee.
It seemed that every single billboard in those states was an ad for a personal injury lawyer--and we saw a lot of billboards. With my antennae raised, I've seen ads for personal injury lawyers just about everywhere, ever since -- ESPN+ broadcasts of my Pittsburgh Penguins even do split-screens so they can show personal injury lawyer ads while the game continues.
Is there really that much money floating around in personal injury law that they can make sure I see attorneys wherever I turn?
Apparently.
Several years ago, I took my daughters on a tour of Civil War battlefields so the younger one could search for ideas for her senior thesis. She came away with a great idea that helped her get an "A." I came away thinking: Holy smokes, there are a lot of personal injury lawyers in Alabama, Mississippi, Kentucky and Tennessee.
It seemed that every single billboard in those states was an ad for a personal injury lawyer--and we saw a lot of billboards. With my antennae raised, I've seen ads for personal injury lawyers just about everywhere, ever since -- ESPN+ broadcasts of my Pittsburgh Penguins even do split-screens so they can show personal injury lawyer ads while the game continues.
Is there really that much money floating around in personal injury law that they can make sure I see attorneys wherever I turn?
Apparently.
Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of A Brief History of a Perfect Future: Inventing the Future We Can Proudly Leave Our Kids by 2050 and Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.
Time for insurance regulators to open up on data?
It's time to stop keeping it all for yourselves.
Consumer advocates want insurance regulators to do more than collect reams of industry information about property and casualty coverage around the country. They want it to be made public so that it can be analyzed for critical trends.
The National Association of Insurance Commissioners announced Friday that it is launching a data call that will gather information – including premiums, policies, claims, losses, limits, deductibles, non-renewals, and coverage types -- at a zip-code level from more than 400 property insurers. The organization said the data “will provide deeper insights into property insurance market costs, coverages, and protection gaps amid the increasing frequency and severity of natural disasters, escalating reinsurance costs, and continued inflationary pressures.”
The NAIC will share the data with the Federal Insurance Office, which will use it to conduct a nationwide assessment of the effect of climate-related financial risks on consumers, according to the Treasury Department.
“This is an important first step in creating the data infrastructure to address how climate risk is affecting home insurance affordability and availability,” said Birny Birnbaum (pictured left), executive director of the Center for Economic Justice. . “NAIC has been missing in action on this issue.”
Four ways generative AI helps insurers manage climate change
Research from the Financial Health Network reveals that a whopping 40% of Americans — 103.4 million people in total — live in 11 high-loss states where natural disasters cause above-average expected annual losses.
With 2023 being the hottest year since records began in 1850, and extreme weather events on the rise, it’s evident that more areas could soon face big losses.
Scientists predict that there is a one-in-three chance this year will be even hotter than 2023. So more natural disasters related to extreme weather are inevitable. Consequently, insurers are doubling down on investing in scalable, innovative catastrophe response capabilities. For insurance companies, using generative AI (gen AI) could be a real game changer, helping keep customers safe while supporting business growth.
Insurance is about probability and statistics, and that aligns perfectly with the benefits of generative AI. Meanwhile, insurers are under pressure to step up their customer-service game amidst catastrophic weather events. Gen AI tools can analyze vast amounts of data to nail down risks better and set Goldilocks policy prices that are just right for the policyholder’s needs and circumstances.
Take, for instance, how gen AI can use information from customer feedback, claims artifacts, climate change records, local weather patterns, economic conditions, and demographic trends to help insurers decide whether to offer a policy and, if so, how to price it to stay both competitive and profitable.
Yasir Andrabi is global head of insurance strategy and growth Genpact
People
Liberty Mutual appoints Amit Khanna Chief Claims & Service Officer, US Retail Markets
Liberty Mutual Insurance has appointed Amit Khanna Chief Claims & Service Officer, US Retail Markets (USRM), effective March 25.
Khanna will oversee the strategic and operational direction of Liberty Mutual’s personal lines and small commercial claims, and customer and agent service organizations. In 2023, these teams of more than 10,000 employees processed more than 1.4 million claims and handled more than 19 million service calls for Liberty Mutual, Safeco and State Auto customers and agents.
Khanna joined Liberty Mutual in 2004 and held a variety of roles in finance, strategy and analytics. For the past decade he has been a leader in the claims organization, most recently as senior vice president and manager, US Property Claims, and prior to that in a similar role managing US Auto Physical Damage Claims. He reports to USRM President Hamid Mirza.
Khanna holds a bachelor’s degree in business administration from the University of Madras in India and earned his MBA in finance from Bentley University.
West Bend Insurance Company announces Jacques appointment as CEO
In a significant leadership transition, West Bend Insurance Company is pleased to announce the promotion of Rob Jacques to Chief Executive Officer (CEO).
Jacques, who has dedicated over 24 years to the company, also currently holds the position as President an appointment he’s held since 2022 where he represented the Commercial Enterprise division as a senior officer. In his expanded role as President and CEO, Jacques is set to guide West Bend's corporate strategies and operating principles into a new era.
Jacques steps into the shoes of Kevin Steiner, who’s been at the helm as CEO since 2009, marking a period of substantial growth and success for the company. Under Steiner's stewardship, West Bend not only fortified its position in the market, but he’s also left an indelible mark on the community and the insurance industry.
Reflecting on the transition, Jacques expressed deep appreciation for Steiner's mentorship and leadership. "Working alongside Kevin has been an extraordinary journey. His profound impact on our company, community, and the insurance sector at large is truly remarkable," said Jacques. He further emphasized his commitment to the company's core values, stating, "With the support of our exceptional team of officers and leaders, I am eager to continue fostering strong relationships with our agency partners and caring for our dedicated team of over 1,600 associates."
West Bend Insurance Company, with a storied history spanning 130 years, has been a cornerstone in providing comprehensive insurance solutions to business owners, homeowners, and auto owners. The company boasts a broad portfolio of property and casualty coverage across 14 states and offers Surety coverage nationwide.