Significant growth in the adoption of AI in auto claims, increased 60% - CCC reports  February 21st 2023

Auto Insurers Taking AI Broader, Deeper Across Claims in 2022

CCC Intelligent Solutions Inc. (CCC), a leading SaaS platform powering the P&C insurance economy, today announces an update to its insurer AI adoption report, which for the third straight year shows significant growth in the adoption of AI in auto claims. The company reports the application of advanced computer vision AI for claims processing increased 60 percent year-over-year. The company also reports that more than 14 million unique claims have now been processed using a CCC AI solution, growing 3X since before the pandemic in 2019. In addition to more claims using AI, the data show a deepening penetration of multiple different AI solutions being applied per claim. In fact, CCC reports the number of claims using four or more of its advanced AI applications also grew 2X year-over-year.

The tech leader also reported the adoption of its industry-first AI-powered touchless estimating solution, CCC® Estimate – STP, has grown to 15 insurers, including 7 of the top 10 carriers based on direct written premium, representing 50% of U.S. auto claims volume. Today, more than 100 insurers are actively using CCC’s AI-powered applications.

“The industry has achieved more with advanced AI than many thought was possible a few short years ago,” said Jason Verlen, vice president, product marketing, CCC. “AI is now applied at key stages across the claims process and is capable of auto-generating a complete repair estimate with line level detail in seconds without human intervention."

The Game Is Afoot!

A confluence of events suggests that 2023 will mark a big move toward a "predict and prevent" model for insurers, and away from the traditional "repair and replace."

In the first talk I gave to an insurance audience, some nine years ago, I projected out a decade and confidently declared, "He who sells the least insurance wins." As a newcomer to the insurance world at that point, I believed that no one WANTED to buy insurance. People bought insurance grudgingly, because it filled a need or, in many cases, because they were required to. I believed that what people did want to buy was protection, and, as someone with a long background in innovation and in writing about digital technology, I believed that insurers could use their vast stores of data and hard-earned expertise to reduce the risks people faced -- and make a lot of money doing so -- rather than wait for a loss to occur and then make people whole.

Paul Carroll, Editor-in-Chief, Insurance Thought Leadership

Revealed – issues challenging commercial P&C in today's environment

Commercial property and casualty (P&C) insurance carriers have been delivering strong financial performance in recent years despite the widespread disruption caused by the COVID-19 pandemic and other global events, according to a recent McKinsey report.

The report noted that premiums have been driven by extensive risk-adjusted rate hardening on a year-on-year basis, resulting in an annual premium growth rate that has remained steady at 6-8% since 2018, alongside improving combined ratios.

However, McKinsey’s analysis found that commercial carriers are facing a “critical inflection point” amid the continuing cycle of economic uncertainties, including inflation, geopolitical headwinds, environmental challenges, and capital constraints.

Allstate: $307M in January Cat Losses and Keeps the Auto Rate Hikes Coming

Allstate Corp. said it estimated catastrophe losses for the month of January of $307 million, or $243 million after-tax from nine events primarily in Texas and California.

Catastrophe losses for the January events were estimated at $309 million, partially offset by favorable reserve reestimates for prior events.

In the same announcement, Allstate updated its initiative to accelerate auto insurance rate increases.

“Allstate continued to implement significant auto insurance rate actions in response to inflationary increases to loss costs,” said Jess Merten, chief financial officer Allstate Corp. “During the month of January, the Allstate brand implemented auto rate increases of 9.9% across 13 locations, resulting in total brand premium impact of 0.7% which are expected to raise annualized written premiums by approximately $182 million.”

Actuaries to play 'important role' on emerging risks - The Professional

New Actuaries Institute President Naomi Edwards says actuaries will play an “increasingly important role” in shaping the outlook on emerging challenges such as climate change and artificial intelligence.

Speaking at a recent Actuaries Institute event, Ms Edwards said the group has established itself as a “very strong policy partner”, having provided advice to the Federal Government, as well as the Australian Prudential Regulation Authority and Treasury.

“We are very heartened that some of the initiatives that the current government are talking about, such as bringing a wider well-being framework into the Federal budget, reflect the work that we have been doing,” Ms Edwards said.

Ms Edwards, a former Deloitte partner, encouraged continued investment in maths education, saying that the organisation’s ability to provide expert advice stemmed from a strong embrace of maths-based solutions.

Insurer reports full year results

AIG has reported its Q4 2022 and full year results, with underwriting income having nearly doubled for the year.

Pre-tax income for the full year was $14.3 billion, an increase from $12.1 billion in 2021. Net income was $10.2 billion, up from 2021’s $9.4 billion.

For Q4 2022, pre-tax income from continuing operations was $279 million, down from $5 billion in the prior year quarter, AIG said.

The full year improvement was “largely driven by net realized gains on Fortitude Re funds withheld embedded derivative, strong General Insurance underwriting results, which almost doubled year-over-year, and lower interest expense benefiting from liability management actions, partially offset by lower alternative investment income and call and tender income,” AIG said in a results release.

Peter Zaffino, AIG chairman and CEO, hailed an “extraordinary year of progress”.

“We continued to improve the profitability of our general insurance business, closing the year with the strongest underwriting results the business has ever achieved and with the second consecutive year of underwriting profitability improving by $1 billion,” Zaffino said.