Cars Speak Directly to Insurers, Reverses Traditional Claim Process  March 6th 2023

“Now the Car Speaks Directly to the Insurance Company”

Zurich is one of the world’s largest insurance groups and has ambitious goals: even more customer focus, growing margins, and a 20 percent return on equity. But how can this be done? The Swiss insurer’s German subsidiary presents a practical example. 

Comprehensive car insurance pays out in the event of damage, destruction, or loss of the vehicle. When customers report a claim, a time-consuming and personnel-intensive process begins for their insurance company. In addition to general claims processing, it often involves legal expertise and expert opinions. This takes time, is expensive, and squeezes profit margins in comprehensive insurance. 

Horst Nussbaumer intends to change that—by using artificial intelligence and data analysis in claims processing. And it starts right from the very first second.

“Now the car speaks directly to the insurance company,” says the chief operating officer and head of claims, IT & operations at Zurich Group Germany.

Nussbaumer’s concept reverses the traditional process, because in the event of a claim, the customer no longer has to contact the insurance company. Instead, at the moment the damage occurs, the car automatically reports it to the company and feeds the computers with data from the event. The insurer then instantly contacts the driver to provide assistance, for example with a towing service, a nearby workshop, and a replacement car. It may sound like science fiction, but initial trials are already underway.

Warm atmospheric rivers in California forecast could spell trouble for massive snowpack

Californians are bracing for the arrival of more atmospheric rivers over the coming weeks that could dump rain on the state’s massive snowpack and dramatically increase the risk of flooding.

“I would suggest that literally anyone who lives in the flood plains of these rivers, which is millions of people, pay attention to what’s going on and be prepared for floods,” Peter Gleick, climate scientist and founder of the Pacific Institute, told Yahoo News.

With snowpack levels already near all-time highs, cold temperatures in the state have begun moderating in recent days, and there is a roughly 20% chance of warmer atmospheric river rains later this month.

SoCal Storms, Back-to-Back Hurricanes in South Central Part of New Normal?

A new AM Best commentary on the latest winter storm to hit Southern California drives home the growing risk and the financial volatility that weather-related losses pose for the insurance industry.

According to the commentary, titled “Changing Weather Patterns, Climate Conditions Increase Challenges for Property (Re)Insurers in California,” California’s recent winter storm is part of a growing list of examples of climate-related risks that are changing things for property insurers.

The commentary notes that changing climate conditions and changing weather patterns could worsen if extreme events continue with greater frequency, particularly impacting insurers whose property portfolios are concentrated in California.

Ohio train derailments spurs insurance, liability questions

In the month since 38 railcars carrying hazardous material came to a grinding, fiery halt in East Palestine, Ohio, interest has swelled around cleanup and liability concerns related to the dangerous derailment.

The crash caused nearby towns to evacuate residents, and the Environmental Protection Agency (EPA) ordered freight train operator Norfolk Southern to follow an approved toxic-waste remediation plan. Had the company failed to satisfy EPA requirements, the agency would have performed the remediation work itself and charged Norfolk Southern triple damages. However, roughly a week after the accident, the EPA reported that air quality around the crash site had returned to normal levels. Train derailments often result in catastrophic losses to the railway company, its employees, the neighborhood, the environment and the country overall. For this reason, it’s a good idea for insurance and risk management professionals to have at least a general understanding of what is and isn’t covered.

What the Future Holds for Insurance

What changes lie ahead for the rest of 2023? That’s a question that Insurance Journal’s “On Point”podcast host Peter van Aartrijk discussed with David Smith, founder and chief executive of Global Futures and Foresight, late last year. Smith is a leading futurologist and strategic thinker, and together they examined what the insurance industry and other businesses can expect in 2023, from artificial intelligence (AI ) to the post-pandemic workplace.

Technology and its impacts are always at the top of mind, Smith said, who is making his third guest visit to the “On Point” podcast.

“Social attitudes are changing, which is a good thing in many ways, although it’s challenging for boomers,” Smith said. “But how we think about our privacy, how we think about engaging, and who we’re prepared to engage with is changing quite substantially.”

Artificial intelligence spurs 62% of carriers to cut staff – survey

Sixty two per cent (62%) of insurers have cut staff due to the implementation of artificial intelligence (AI) and machine learning (ML) technologies in the past 12 months, according to the results of a global survey.

Rackspace surveyed IT decision makers across a range of sectors in the Americas, Europe, Asia, and the Middle East and received 52 responses from individuals at insurance companies.

“When we look to computers or we look to technology to make an organisation more profitable and more efficient … some of these organisations have employed, in some cases, mountains of people to be able to do some of this work,” said Jeff DeVerter, chief technology evangelist, Rackspace Technology.

ChatGPT and Other Large Language Models: P&C Insurance Edition

The debut of ChatGPT, a product of the joint venture between OpenAI and Microsoft in November 2022, has catalyzed a comprehensive examination of the impact of large language models (LLMs) on the insurance industry. The strategic question for insurers is twofold: what is the potential influence of LLMs, and how can they be seamlessly integrated into their operations? Augmented intelligence tools such as ChatGPT and other LLMs combine artificial intelligence (AI) with human intelligence, enhancing and amplifying human abilities, ranging from generating content quickly to improving decision-making, problem-solving, and overall cognitive capacities.

Of particular interest is the user-friendly interface of LLMs, which allows for the convenient accessibility of these tools for anyone with internet access. LLMs are capable of transforming many tasks currently undertaken by human employees and adding value to these tasks in various ways. As a result, insurers must consider the genuine value provided by their human employees and adjust their talent requirements accordingly. Depending on the cost efficiency, LLMs could be accessed by any enterprise through an API, thereby leveling the playing field.

The failure to embrace LLMs could have significant ramifications for insurers in the long term, as early adopters may establish a competitive advantage that is sustainable over time. As consumers lead the way in adopting LLMs, they will expect their service requirements across industries to increase, necessitating the adoption of LLM solutions by insurers at some point. The absence of such solutions may leave organizations less operationally efficient than their peers, leading to long-term difficulties and reduced profitability. Navigating the uncharted waters of augmented intelligence demands extensive collaboration between insurers, enterprise stakeholders, and regulators.

Machine learning & IoT to impact future of insurance industry: ACORD

A recent survey on the future of the insurance industry conducted by ACORD has shown that increased sophistication in technologies like AI, machine learning, and the Internet of Things (IoT) is projected to have a large impact on the industry.

The survey polled a variety of different insurance professionals about their perspectives on the outlook for the insurance industry over the next 20 years. Throughout the survey, respondents identified the technologies, practices and strategies they believed would have the greatest impact on the global insurance sector in both the short and long term.

Going back to technology, respondents from the survey said that familiarity and proficiency with technology from the C-suite down will be increasingly important. Respondents also anticipated a rise in the technology vs. people skew in their organizations’ overall capability mix over the next 10-20 years.

SWBC Leverages CCC Intelligent Solutions’ Technology to Help Credit Unions Resolve Total Loss Auto Claims

Financial services company will use CCC® Total Loss Care to help its credit union clients streamline and improve the total loss claims experience for their members

CCC Intelligent Solutions Inc. (CCC), a leading SaaS platform for the P&C insurance economy, announced today that SWBC, a diversified financial services company, will leverage its CCC® Total Loss Care solution to streamline the total loss management and settlement process for its credit union clients and their members. CCC Total Loss Care is a comprehensive digital solution that simplifies the total loss resolution process, creating efficiencies and improving customer experiences. SWBC provides auto and mortgage solutions to 1,400+ financial institutions.

“Many of our credit union clients serve as a one-stop shop for their members and look to us for support in bringing best-in-class solutions to help address their members’ challenges,” said Jeff Anderson, Vice President of Auto Specialty Products, SWBC’s Financial Institution Group. By using CCC’s solutions, we can help our credit union clients bring relief to their members following a total loss experience. CCC Total Loss Care reduces the tedious and timely manual steps from the recovery process and helps to bring total loss claims to conclusion faster.”

CCC is the leader in total loss valuations, processing more than 4 million total loss claims on behalf of its clients in 2022. CCC Total Loss Care, part of CCC’s suite of digital claims solutions, uses a range of technologies to connect disparate parties, digitize processes, and inform decisions throughout the total loss experience. Chiefly, the solution automates the cumbersome tasks of obtaining lien information and title release, offering users a digital solution throughout the total loss journey from pre-inspection to incident to assignment to salvage providers.

“CCC is excited to welcome SWBC to its lender community,” said Rick Evans, Vice President, Lender Services, CCC. “Connecting SWBC to the important documentation they need will help them deliver a value-added service to their credit union clients. Now more than ever, lenders are experiencing high volumes of member calls, and digital tools that can deliver scale will create better experiences for them.”