AI in Insurance
Modernizing Insurance Underwriting with Advanced System Solutions - KillerStartups.com
With artificial intelligence, businesses today can use data to bring in new levels of efficiency, streamline operations, and get a competitive advantage.
The same goes for the insurance industry. Insurance underwriting is the key area that AI will impact. It is the backbone of all operations, needing detailed analysis and a good understanding of market trends. Traditional underwriting is a time-consuming process limited by the lack of real-time data; an automated insurance underwriting system is a healthy alternative to it. It enables insurers to make decisions with real-time data and improves accuracy and customer satisfaction.
Benefits of automated underwriting systems
Automated underwriting with the help of advanced insurance software offers many benefits compared to manual underwriting. It eliminates the problems caused by human error, short staffing, limited technology, and lost mortgage loans. Let us see some of the key benefits of using an automated underwriting system –
- Improved customer experience—Manual processing takes a lot of time and can be frustrating to many customers. However, automated underwriting tools let underwriters reduce the time needed to make decisions when responding to customers’ queries. As the entire process depends on customer trust, any improvement in the customer experience will benefit insurance companies in the future.
Maya Johnson is a sharp and strategic thinker who has made her mark as a digital marketing analyst. Her columns offer readers an in-depth analysis of the latest digital marketing trends, algorithms, and social media tactics
News
State Farm projects dropping 1 million policies in California over next five years
State Farm is projecting that by 2028, the number of policies it issues in California will drop by 1 million, as the insurance giant grapples with financial distress and pulls back from the Golden State.
According to a filing submitted to the California Department of Insurance on Sept. 10, the insurer’s policies for property insurance, which includes homeowners insurance, could decline from 3.1 million at the end of 2023 to 2 million by the end of 2028.
Since May 2023, State Farm has not been writing any new homeowners policies in the state, as wildfire risk and increasing construction costs have led the company’s liabilities to balloon.
The drop noted in the filings includes both planned non-renewals, as well as natural attrition as policyholders decide to cancel or switch their insurance coverage.
Amy Bach, executive director of United Policyholders, an insurance consumer advocacy group, said that it’s possible that these projections could change and eventually have State Farm increasing the number of policies in the state, especially if the State Department of Insurance makes some of the reforms that it has proposed to the insurance market. These include speeding up the review process for insurers seeking rate hikes and allowing them to factor the projected costs of future wildfires and disasters into their rates. Currently, insurers can only price insurance based on historical models — which consumer watchdogs say keeps their models transparent.
“The insurance commissioner has said that in 2025, he expects the market to open back up and that we’ll see many more insurers willing to write more policies in the new year,” Bach said. “So we can see this as more bad news in 2024 and hope that 2025 will be better.”
Insurer disputes damning whistleblower claims from ‘60 Minutes’ report; Dems call for action
[Follow up to original story posted on 9/30 ---- Ed. note: when you are in a hole, stop digging]
The company signed a state order in May agreeing to pay more than $1M and acknowledging it violated hundreds of insurance regulations.
The company named in a bombshell “60 Minutes” report about insurers severely shortchanging Florida homeowners after Hurricane Ian says reporters omitted key details about the issue and what it’s done to improve since then.
Democratic lawmakers say the damning exposé, which included evidence that adjuster reports were reduced by more than 90% in some cases, is more proof that the Legislature must take action to address the issue.
Meanwhile, Gov. Ron Desantis contends the problem has already been fixed and that “60 Minutes” isn’t a reliable news source, citing his own difficulties with the program.
CBS News reporters revealed in Sunday’s “60 Minutes” episode that an estimated 50,000 homeowners are still battling with their insurance companies to settle claims stemming from Hurricane Ian, which struck Florida’s Gulf Coast at near-Category 5 strength on Sept. 28, 2022.
How the U.S. East Coast Port Strike Could Affect Car Buyers
45,000 port workers with the International Longshoremen's Association Union officially went on strike Tuesday in a move that could cost the United States economy as much as $5 billion a day — a fact that has already stirred up concern among laborers, legislators, and consumers alike.
One group that may be particularly hard-hit is the automotive sector, and the strike's potential effects on the car-buying public could come to pass sooner rather than later, according to automakers and industry analysts who spoke to Road & Track.
Around $159 billion in automobiles were imported to the United States in 2022, and the East Coast and Gulf Coast ports of the U.S. are vital avenues for the importation of foreign vehicles — specifically, for European automakers like BMW, Volvo, and Volkswagen.
The impact on automakers and car buyers won't be immediate, but the potential for rippling effects through the start of 2025 is high, according to Barclay's researchers. Cox Automotive analysis shows that high levels of inventory at dealerships should dampen the impact on consumers at first. But Karl Brauer, executive analyst at iSeeCars, says that every car company that sells vehicles in the U.S. will be hurting at some point.
Commentary/Opinion
Viewpoint: East Coast Port Strike: Insurance and Risk Management Implications
As it has many times before, the International Longshore Association (ILA) threatened a strike, beginning October 1, that would shut down major ports along the Atlantic and Gulf coasts of the United States, with significant repercussions for global trade. That strike is now on.
Organizations that ship goods into and out of the U.S. should consider how marine cargo insurance may respond and understand how they can take action to mitigate potential risks.
Tom Ptacek, JD, Senior Vice President, Marine, Lockton and Zoi Fanourgiakis, AVP, Senior Client Manager, Marine, Lockton
Global cyber attacks will more than double this year to 211, says QBE
The number of disruptive and destructive global cyber-attacks taking place each year is set to increase by 105% to the end of 2024, according to a new report from QBE.
In fact, the trend shows that these significant, disruptive and destructive global cyber-attacks are likely to more than double this year to 211, compared to 103 in 2020.
QBE noted that this forecast comes as the new Labour government considers legislation to strengthen the UK’s cyber security, following a series of damaging cyber-attacks and events.
InsurTech/M&A/Finance💰/Collaboration
Insurtech Profits? Maybe Next Year | Insurance Thought Leadership
Let's take a look at the latest financials of the full-tech insurtechs, the (not too) new kids on the block.
As full-stack insurtechs keep aiming at profitability, let’s take a look at the latest financials of the (not too) new kids on the block.
Lemonade – our undefeated master of storytelling – opened their shareholder letter with a triumphalist, “we were net cash flow (“NCF”) positive,” while their operations are still burning millions of dollars each quarter.
They have definitely improved - as noted in the December edition of this newsletter - but they are still burning a lot of cash.
{COMPLETE ARTICLE](https://)www.insurancethoughtleadership.com/going-digital/insurtech-profits-maybe-next-year
Matteo Carbone is founder and director of the Connected Insurance Observatory and a global insurtech thought leader. He is an author and public speaker who is internationally recognized as an insurance industry strategist with a specialization in innovation.
Lyft and Mobilitas Insurance Companies Renew Commercial Insurance Partnership
[Ed. Note: The Mobilitas Insurance Companies are part of CSAA Insurance Group]
Multi-year collaboration continues to support mobility sector
The Mobilitas Insurance Companies, providers of commercial insurance for the unique and emerging demands of the sharing economy and mobility sector, announced that Lyft has renewed its partnership for ridesharing commercial insurance coverage in 23 states, effective October 1, 2024.
"Mobilitas remains focused on serving the commercial insurance needs of the mobility sector, and it is our privilege to continue partnering with Lyft to effectively manage the business risks related to rideshare," said Jeff Huebner, executive vice president of commercial insurance. "Our unparalleled claims expertise and customizable digital solutions uniquely position us to continue advancing Lyft's innovative approach to safe and reliable transportation."
Lyft and Mobilitas have partnered since 2020, when it was first announced that Lyft had selected Mobilitas to provide ride-sharing commercial insurance coverage in 11 states starting October 1, 2020. The partnership expanded to 18 states in 2021, and to 23 states in 2022.
GFT and Vitech Partner on Digital Transformation for Group Insurers | Insurance Innovation Reporter
The companies say they are building on their success at Beneva** to enable group insurers across North America to compete against each other and new digital entrants.
Digital transformation consultancy GFT (Quebec) and group insurance and pension administration software provider Vitech (New York) have announced an expansion of a partnership based on their collaboration on the transformation of Canadian carrier Beneva (Quebec). The companies say they are scaling their work together to enable group insurers across North America to compete against each other and new digital entrants.
The companies explain their opportunity by noting that Canada’s group benefits insurers are under increasing pressure to transform their offerings. On one side of the industry, as much as 65 percent of the country’s overall market share is held by three major insurers, they observe. Meanwhile, InsurTechs and other digital-first insurance options are redefining the manual, paper-heavy processes that organizations have traditionally used to provide life, health, vision and dental insurance to their employees. This shift is driving traditional insurance carriers to do the same.
Climate/Change/Sustainability/ESG
AccuWeather Puts Total Damage and Economic Loss From Helene at $145B to $160B
AccuWeather increased its estimate of the total damage and economic loss from Hurricane Helene to between $145 billion and $160 billion.
This update is an increase from AccuWeather’s preliminary estimate late last week of total damage and economic loss of $95 billion to $110 billion issued while the storm’s most significant impacts were still occurring. The increase makes Hurricane Helene one of the costliest storms in U.S. history.
Helene May Signal a Whole New Level of Threat | Insurance Thought Leadership
Hurricanes used to lose most of their power before making it as far inland as western North Carolina. But Helene wreaked havoc there. Future hurricanes may, too.
As much damage as Hurricane Helene has caused — and this one is really bad — it also sends a truly ominous warning about future storms because of something known as the "brown-ocean effect."
Atlantic hurricanes lose force as they move inland, because they no longer have access to the warm water that provided their energy in the first place. But Helene stayed far stronger than normal as it moved north.
The governor of Georgia said it was like a 250-mile-wide tornado as it moved through the state. Helene dumped more than 32 inches of rain on parts of western North Carolina and devastated the area. The state is some 450 miles north of the Gulf of Mexico and historically has just had to deal with the dying remnants of such major storms.
Why didn't Helene fade as quickly as prior hurricanes have? Scientists say the reason may be the "brown-ocean effect."
And they worry that future storms may mimic Helene, meaning we may have to now worry about a hurricane alley reaching well up into Appalachia.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
Helene's fatal floods show hurricane risk is moving inland
This was the latest weather event to challenge assumptions about how to prepare for storms and other natural disasters.
Hurricane Helene killed more than 100 people in six states across the South, and most of the victims lived hundreds of miles away from where the storm made landfall.
After striking Florida's western coast last week, Helene unleashed catastrophic flooding across Appalachia. Its devastation came down to two primary factors: its massive size and the significant amount of moisture it absorbed over open water.
Sweltering ocean temperatures driven by climate change are allowing storms to pull in more water vapor, triggering torrential rainfall. And while researchers don't attribute cyclone size to global warming, Helene's width — with winds that extended more than 310 miles (499 kilometers) at landfall, it was larger than 90% of hurricanes in the region over the past two decades — meant that it inundated cities and towns far from the coast.
"Helene was, to put it directly, sort of the worst of all things," said John Cangialosi, senior hurricane specialist with the US National Hurricane Center in Miami. "It's one of those all-hazards hurricanes. You'll hear that some storms are wind machines, and some are storm surge producers, and some bring rain. Helene produced all of these hazards — significantly."
Events
ITC Vegas 2024 - The world’s largest gathering of insurance innovation
*Insurtech Consulting and our ‘Connected’ newsletter are proud media partners of ITC Vegas 2024
Event Date: Tuesday, October 15 – Thursday, October 17, 2024
Event Location: Mandalay Bay Convention Center, 3950 Las Vegas Blvd S Las Vegas, NV 89119
ITC Vegas combines unbeatable networking with what’s new and next, ensuring your time will be spent meeting more people, sourcing more solutions, and creating valuable partnerships.
Discover solutions to your biggest challenges, gain access to unique and meaningful education, and meet the insurance industry’s best and brightest. Join the insurance event that doesn’t just bring the industry together – it moves the entire industry forward.
The future of insurance is here – at ITC Vegas. If you aren’t here, you are missing out on the conversations that are propelling the industry forward
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