AI in Insurance
Unlocking AI Insights in the Era of Mobility and Insurance -
Computer vision is set to revolutionize industries in much the same way as the personal computer and smartphone did. This technology enables software to perceive and interpret the world directly, in ways only humans could previously achieve. By processing and analyzing images and videos, this technology can identify patterns, detect objects, and make decisions based on visual data. This capability is crucial as it eliminates the need for human intermediaries to interpret structured data, unleashing a Cambrian explosion of new possibilities.
Computer vision is a subset of artificial intelligence (AI) that enables machines to interpret and make decisions based on visual input from the environment. This capability is more than just a technical marvel, it’s a fundamental shift that merges the physical and digital worlds, as it allows machines to understand and interact with the world in real-time. This breakthrough has far-reaching implications across industries, from autonomous vehicles to advanced manufacturing. Computer Vision in Auto Insurance
Auto insurance stands out as an industry ripe for transformation through computer vision. The global car insurance market, valued at USD 978.12 billion in 2024, is on the cusp of a significant shift driven by advancements in AI. Computer vision offers value beyond claims processing, extending into driving behavior analysis, document processing, and even accident prevention.
One of the most immediate applications of computer vision in auto insurance is in claims processing. By analyzing images and videos of accidents, computer vision can assess damage, determine faults, and streamline the entire claims process. This leads to faster settlements and reduced fraud, benefiting both insurers and policyholders.
Rohan Malhotra is the CEO, founder and director of Roadzen
Telematics, Driving & Insurance
Uber partners with Cambridge Mobile Telematics to launch Advantage Mode for drivers
Uber is working with Cambridge Mobile Telematics (CMT) to enhance driver safety and performance.
Beginning next month, Uber is rolling out Advantage Mode in select cities such as Austin, Miami, and Phoenix. This new program offers higher earnings and more exclusive ride requests to highly-rated drivers who accept more often, cancel less, and ensure riders reach their destinations safely.
When a driver is in Advantage Mode, they’ll receive more exclusive ride requests and earn 5% more on UberX and other non-premium rides compared to Standard Mode.
Eligibility for Advantage Mode is based on an acceptance rate of 25% or more, a cancellation rate of 8% or less (both based on the last 100 trip requests), a star rating of at least 4.85, and, starting 9/2, a CMT driving score of 75 or more.
CMT uses phone sensor data to provide insights on driving behaviors such as speeding, hard braking, harsh acceleration, sharp turns, and phone handling. Drivers can access a dashboard in the Safety Hub of the Uber app to see their driving score and receive tips for improvement.
Bottom Line: Higher earnings translate to 5% more on UberX, which may be a low incentive to change driver behavior.
News
More Help Coming for Floridians On Property Insurance and Small Business Owners
Florida Chief Financial Officer Jimmy Patronis is assuring state residents that the state’s budget will lead to lower insurance rates and provide more protection for homeowners via the $200 million funding of the My Safe Florida Home Program.
According to Patronis, $7 million in new funding through the state’s insurance consumer services division will support first responders and improve the state fire college’s facilities for training for future firefighters.
Patronis met with the Florida Cabinet to approve rules to implement a reduction in Florida’s Commercial Lease Sales Tax rate, which is estimated to save Florida Business owners around $1 billion in tax relief.
Florida’s portion of sales tax on commercial property leases drops from 4.5% to 2%. The local county option tax rate, which typically varies by county between 0.5% and 1.5%, will not change.
Florida is one of the few states that assesses sales tax on commercial leases of real property. Business groups around the state have supported a decrease in the rental tax. They say the savings will greatly help job hiring and business expansion.
US P&C Insurer Results Rebound with Strong Q1 Results
The U.S. property and casualty (P&C) insurance sector has seen its best first-quarter underwriting result in over 15 years, driven by strong premium gains, reduced claims cost inflation, and higher investment yields, indicating a positive shift in the industry’s trajectory, Swiss Re Institute reports.
However, potential risks like social inflation and persistent inflation could negatively impact the industry’s return on equity (ROE), according to the report. ROE for U.S. P&C insurers is forecast to reach 9.5% in 2024 and 10.0% in 2025, a significant increase from 3.4% in 2023. First-quarter 2024 results already show promise, with ROE near 14%, the report says.
Personal lines are expected to drive growth, while commercial lines slow down. In the first quarter of 2024, personal lines premiums grew by an impressive 15%, while commercial lines saw a more modest 5% growth. P&C direct premiums written (DPW) growth is forecast at 8.0% for 2024 and 5.0% in 2025, Swiss Re said.
However, there are potential risks, despite the optimistic outlook. Social inflation could weaken reserve development, an economic downturn might impact premium growth, and persistent inflation could put further pressure on claims costs, the report states. These factors have the potential to negatively affect industry ROE.
Underwriting Results and Trends
The U.S. P&C insurance industry is expected to see a significant improvement in its net combined ratio, with forecasts of 98.5% for both 2024 and 2025, compared to 102% in 2023. The first quarter of 2024 already showed promising results, with a combined ratio of 94%, an 8 percentage point improvement year-over-year. As the average U.S. Consumer Price Index inflation declines to a projected 3.1% in 2024 and 2.5% in 2025, the underlying results are expected to improve further, the report said.
Personal lines are the key positive driver of this improvement, with the loss ratio gap between personal and commercial lines narrowing. Homeowners’ insurance, in particular, saw a 15 percentage point improvement in its loss ratio during the first quarter of 2024 as premiums catch up with higher replacement costs. Personal auto margins are also benefiting from disinflation in used car prices and repair costs normalizing, according to the report.
Research
86% of U.S. Drivers Would Share Data to Save Lives, According to New Arity Report
New data from Arity analyzes U.S. transportation ecosystem challenges, revealing how drivers feel about risky driving behaviors and what driving behavior data tells us about how to fix them
An overwhelming 86% of U.S. drivers would be more willing to share driving behavior data if they knew it could help prevent the loss of life. That’s a key takeaway from a mobility data and analytics company, Arity.
Despite technological advancements in cars, the rise in traffic, distracted driving, and insurance premiums have made driving more time-consuming, costly, and dangerous, with traffic fatalities rising by 30%1 over the past decade. The willingness of drivers to contribute their data underscores the growing recognition of data's pivotal role in addressing road safety concerns nationwide.
“Today's transportation ecosystem is broken and is costing people a lot of money and even lives. But it doesn't have to be this way," said Gary Hallgren, President of Arity. “With more driving data available than ever before, Arity is dedicated to identifying the factors contributing to road risk and enabling solutions that empower a smarter, safer, and more useful way to navigate the world. With this latest data report, we’re exploring ways to shape a better future of mobility, revealing how every stakeholder across transportation can contribute to safer roads.”
U.S. Commercial Insurance Market Becoming More Predictable, but Challenges Remain: Lockton Market Update
Commercial insurers are increasingly competing for business across a number of major lines, helping to fuel stability and more predictable outcomes at renewal for U.S. insurance buyers, according to the latest edition of the Lockton Market Update.
The quarterly report published by Lockton, the world's largest privately held independent insurance broker, covers trends and conditions in the commercial property and casualty market in the U.S. to help businesses make more informed decisions about their insurance programs. The June Lockton Market Update highlights changes in the overall U.S. economic and geopolitical outlook, the dramatic shift in the property marketplace after a five-year hard market, and conditions in the marine insurance market following the collapse of Baltimore's Francis Scott Key Bridge.
"Three months ago, we anticipated a shift in the P&C insurance marketplace toward greater competition. We're now seeing these conditions materialize for commercial insurance buyers," said Mark Moitoso, Lockton's Risk Practices Leader. "The property market is stabilizing, liability pricing continues to increase but becoming more predictable, and we're seeing favorable conditions in workers' compensation, directors and officers liability, and cyber insurance."
While carriers' current financial performance has been positive, the report details what challenges remain. Climate change represents a long-term threat for property insurers, and new data suggests that social inflation – the dramatic increase in the size of claim settlements and verdicts in civil litigation – is not going away.
Announcements
National Insurance Awareness Day, June 28
National Insurance Awareness Day
June 28 is National Insurance Awareness Day, and the NFIP is grateful for insurance agents nationwide who diligently work to help protect their clients against flooding. Given how expensive flooding is, flood insurance is vital for Americans to rebuild after a disaster. To put repair costs into perspective, we’re here to answer some common questions about flooding and flood insurance.
InsurTech/M&A/Finance💰/Collaboration
Supercede raises $15m in Series A funding round
Supercede, a reinsurance tech firm, has completed a $15 million Series A funding round, led by Alven with contributions from Mundi Ventures along with an existing investor roster that included Outward, Seedcamp, MMC Ventures, and AFG Partners.
The funds, according to the firm, will be used to advance its mission to transform the reinsurance sector through next-generation technology.
Supercede also plans to expand its team by attracting top-tier talent to enhance platform development and implementation.
Jerad Leigh, Chief Executive Officer and Co-founder, Supercede, stated, “Securing this funding is a testament to the transformative power of our platform.
Insurity Partners with Coherent to Modernize Insurance Product Management and Accelerate Migrations from Legacy Systems for P&C Insurers
Insurity, the leading provider of cloud software for insurance carriers, brokers, and MGAs, today announced that it has partnered with Coherent, a platform that simplifies and accelerates insurance product development. This collaboration marks a significant step forward in the capability of P&C insurance organizations to modernize their systems and streamline their operations.
Coherent's Spark solution stands out by transforming the business logic in traditional spreadsheets into easy-to-use APIs, allowing insurers to launch products faster. Integrated with Insurity’s modern product suite, this technology facilitates seamless migrations from legacy systems, enhances processing speeds, and significantly reduces costs.
The partnership directly addresses the critical challenge of rating and rules externalization and provides a holistic solution that covers the complete workflow for carriers and intermediaries. By reducing dependency on outdated systems, Insurity and Coherent enable insurers to manage diverse risks and customizations more effectively.
Key benefits of this collaboration include transforming insurance operations through the integration of spreadsheet APIs, leading to a reduction in time-to-market and development costs. This results in an 89% faster product deployment and provides a comprehensive approach to managing carrier and intermediary workflows without needing third-party development or coding. Previous deployments of Coherent’s platform have brought considerable benefits to insurers, including a saving of $740,000 from a single deployment and a 75-fold acceleration in runtime.
"Coherent is thrilled to partner with Insurity and empower hundreds of P&C insurers to overcome the challenges of legacy systems and launch new products quickly," said John Brisco, CEO at Coherent. "Our platform's ability to unlock business logic and seamlessly integrate with Insurity’s systems is just one example of how we simplify complexities for insurers at scale. Together, we’re delivering a powerful solution that reduces deployment times and operational costs and significantly enhances market responsiveness."
Innovation
The Institutes RiskStream Collaborative® Expands Its Emerging Technology Work to Artificial Intelligence
RiskStream is holding an AI & LLM in Insurance Summit in July 2024 to discuss multiparty insurance industry applications
The InstitutesRiskStream Collaborative® announced today that it has expanded its solution interests to include artificial intelligence, starting with the AI & LLM in Insurance: Multiparty Applications Summit, to be held July 11, 2024. Summit participants can anticipate an overview of large language models (LLMs) and training; discussion of the importance of data obfuscation, privacy, and security; and conversations about regulatory and compliance implications.
The goal of the summit is to bring the property-casualty and reinsurance communities together to provide education on the platforms, discuss opportunities, and prioritize use cases that can then be solutioned through industry-led virtual working groups. Expanding RiskStream’s initiatives to include AI offers member companies additional value through education, innovation, and industry collaboration.
“We are committed to educating and empowering the insurance industry to harness the transformative power of collaborative technologies, including artificial intelligence,” said Patrick Schmid, Ph.D., president of The Institutes RiskStream Collaborative®.
“This process begins with the AI & LLM Summit. This event will serve as a pivotal opportunity for industry leaders and innovators to gather and prioritize multiparty use cases and to explore the importance of privacy, security, and responsible use of AI in insurance. The end goal is to enhance industry efficiency, accuracy, and customer experience in the insurance sector and to do so in a responsible and ethical way,” Schmid added.
Modernizing the Insurance Customer Journey in the Digital Era
Modernizing the customer journey can have great organizational and customer benefits in addition to growth in the agency's value.
Right now, the customer experience in insurance matters more than ever. Evolving customer expectations for seamless, personalized and fast interactions are reshaping the industry — and putting some pressure on agents and brokers to adopt the technologies that enable these types of quality interactions.
"Modernizing the customer and prospect experience has a great impact on the value and competitiveness of an agency," said Ilya Filipov, general manager for insurance at Total Expert. "It ensures organic growth and can maximize the value of each customer. And, for those who are looking to exit the market and sell, a modernized agency can be more attractive to potential buyers."
Every stage of the journey — whether it's awareness, decision and purchase, customer on-boarding, policy management, claims processing or retention – can be improved with technology. For example, leveraging data to get more accurate insights from customer data can improve targeted marketing campaigns, personalize recommendations for coverage, and provide more accurate quotes. Adopting omnichannel ensures the customer can seamlessly switch between preferred channels to engage. Self-service technologies provide a way for customers to manage their own policies or file claims without having to talk through it with a live support person. And automation can streamline communications and provide gentle reminders to take action, such as at renewal time.
Just for Fun
Brits get beer insurance as Euro soccer tournament heats up
Heineken has a new ad campaign, in collaboration with Publicis London, in which it claims it has introduced an ‘innovative’ insurance policy designed to cover football fans who accidentally spill their beer during the more stressful moments of the Euros (England, that’s most moments). Dubbed "HeineCare,"this ‘policy’ says it offers a unique solution for fans at five selected UK pubs, providing a replacement pint if their drink is spilled in a moment of joy or frustration.
Chris Bruney, the creative director, along with senior creatives Andy Thirsk and Conor Barry, spearheaded the campaign. When an accidental spillage occurs, fans can scan a QR code on customized Heineken beer mats, input their personal details on the HeineCare website, and receive a voucher for a free replacement Heineken or Heineken 0.0.
The campaign will be promoted through various channels, including out-of-home activations, social media, and public relations efforts. The creative approach refreshes the old saying "don't cry over spilt milk" by swapping "milk" with "beer." Heineken's social media will highlight the most "spill-worthy" moments of the matches, such as controversial VAR decisions.