AI in Insurance
Who's Getting Results From AI, and Why? | Insurance Thought Leadership
Research finds that the insurance industry is above average in innovating with AI but has more levers it could be pulling to get the full benefits
I'll keep this short this week because I feel like I've been holding my breath for months in advance of Election Day in the U.S., and my lungs are about to explode. Maybe my brain, too. Many of you probably feel the same way.
But I do want to share some thoughts about a smart white paper from BCG that looks at the progress that has — and hasn't — been made on using artificial intelligence in business in the nearly two years since ChatGPT debuted.
The headline numbers: While 98% of companies are experimenting with AI, only 26% have moved beyond the pilot stage and are generating value. Just 4% are at what the consulting firm considers to be the forefront of implementation of generative AI.
Let's take a look at who the leaders are, where they're generating value, and how insurers stack up.
Paul Carroll, editor-in-chief, Insurance Thought Leadership
AIG leans on generative AI to speed underwriting
The insurer is using large language model technologies to drive digital transformation as part of a broad enterprise simplification push, CEO Peter Zaffino said
American International Group is leaning on generative AI to modernize underwriting, Chairman and CEO Peter Zaffino said Tuesday during the insurer’s Q3 2024 earnings call.
“In our early pilots, we’ve seen data collection and accuracy rates within our underwriting processes improved from levels near 75% to upwards of 90%, while reducing processing time significantly,” Zaffino said.
Earlier this year, the company made technology a pillar of an enterprisewide transformation initiative called AIG Next as it divested a majority share in life insurance and retirement subsidiary Corebridge Financial. AIG Next “will create a slimmer, less complex company with the appropriate infrastructure and capabilities for the size of business we will be post Corebridge deconsolidation,” Zaffino said in a February letter to shareholders.
Insurance and banking are data-rich industries that stand to gain the most from generative AI document summarization, action recommendation and natural language processing capabilities.
AIG’s leadership is eager to reap the rewards as it consolidates operations following its Corebridge divestiture.
“GenAI can produce meaningful gains from reducing manual inputs and driving process efficiencies, however, our GenAI ecosystem is doing much more than that,” Zaffino said. “It integrates proprietary data from multiple sources with data ingestion capabilities to give us better data quality in a fraction of the time.”
Gallagher Re: AI InsurTechs Secure $897m in Q3 Funding Boom
Gallagher Re report shows AI ventures dominate sector with eight of top 10 funding rounds, while total insurtech investment hits US$1.38bn
Global insurtech funding reached US$1.38bn in the third quarter of 2024, with companies focused on AI securing US$897.4m across 29 deals, according to a report from reinsurance broker Gallagher Re. This marks the highest level of funding since the first quarter of 2023.
Eight of the 10 largest funding rounds went to AI-centred companies, resulting in an average deal size of US$34.9m for AI-focused ventures. The dominance of AI in the sector is underscored by the fact that 63.4% of all deals were centred around artificial intelligence technology.
InsurTech/M&A/Finance💰/Collaboration
Centana Growth Partners Acquires Majority Stake in Hippo’s First Connect Insurance Services
Centana Growth Partners, a growth equity firm specializing in the financial services ecosystem, is pleased to announce that it has acquired a majority
The initial investment, exceeding $60 million, is led by Centana with participation from Pruven Capital, Cota Capital, and Cross Creek. This funding will enable First Connect to accelerate product growth, expand market penetration, and continue its efforts to be the industry-leading insurtech platform, providing independent insurance agents with fast access to carriers and cutting-edge, tech-driven workflows.
First Connect Insurance Services is a digital platform designed to level the playing field for independent agents by providing access to over 100 carriers and MGAs across home, auto, cyber, small business, life, and specialty lines. First Connect is a licensed property casualty and life insurance agent with products underwritten by various insurance companies
InsurTech Innovator Has High Hopes for Ascend
The first startup Andrew Wynn joined became a multi-billion-dollar home run. The first he started sold to Hippo Insurance in 2019.
Now, the 35-year-old leader is swinging for another smash hit — this time in the world of insurance financial operations. Wynn is the CEO of Ascend, a software platform that automates billing, collections and accounting tasks.
With a notable growth step planned for early 2025, he’s hopeful that Ascend will become the “financial system of record that helps collect premiums, disperse premiums, disperse claims, remit commissions — all of those things.”
Veterans Day
The History of Veterans Day
Raymond Weeks of Birmingham, Alabama, organized an Armistice Day parade for that city on Nov. 11, 1947, to honor Veterans for their loyal service. Later, U.S. Representative Edward H. Rees of Kansas proposed legislation changing the name of Armistice Day to Veterans Day, to honor all Veterans who have served America.
In 1954, President Dwight D. Eisenhower signed a bill proclaiming Nov. 11 as Veterans Day and called upon Americans everywhere to re-dedicate themselves to the cause of peace. He issued a presidential order directing the head of the then-known Veterans Administration (now the Department of Veterans Affairs) to form a Veterans Day National Committee to organize and oversee the national observance of Veterans Day.
In 1968, Congress moved Veterans Day to the fourth Monday in October. However, it became apparent that the date Nov. 11—the end of World War I—was historically significant to many Americans. As a result, Congress formally returned the observance of Veterans Day to its traditional date in 1978.
Claims
How Tech Is Changing the Way Insurance Companies Assess Risk and Handle Claims
In the world of insurance, risk assessment and claims processing are two areas that have benefited the most from emerging technologies. Though the insurance industry has been somewhat slow in its digital transformation, it's begun to evolve at a breakneck pace. This only makes sense, given how quickly tech is changing the world (and consumer expectations.)
A recent Accenture survey highlights just how open insurance leaders have become to embracing the latest technologies to refine their workflows. According to the survey findings, 61% of executives in the insurance marketplace say they're focused on reinvention. Technological tools and strategies are a big part of the overall reinvention journey.
To understand how much impact tech is having on risk and claims, take a look at some of the most prevalent current technology use cases in insurance. Each one is an indicator of how much progress has already been made—and where more progress is likely to occur.
Granular data availability is personalizing risk and rates.
Many homeowners are concerned about the rising costs of homeowners insurance across the country. This is especially true among homeowners whose properties are in catastrophe-prone areas like Florida. For some, merely finding insurance can be problematic, as many carriers have withdrawn from providing insurance in those regions.
Podcast
The impacts of social media & technology on our mental health
The DigIn PodcastThe impacts of social media & technology on our mental health
Mark Debus, clinical manager of behavioral health at Sedgwick shares how social media and other technologies are affecting our mental health in today's world.
Patti Harman (00:06):
Hello and welcome to the Dig-In podcast. I'm your host Patti Harman, editor in chief of Digital Insurance. Do you remember a time when you didn't always carry your cell phone or when you weren't on social media? We live in a very connected world, and there are times when I wish I could just unplug from everything. While I appreciate the convenience of being aware of what's going on in the world, especially since it's kind of an important part of a journalist's job, I think that sometimes we suffer from information overload. Add in social media, and we are just bombarded with information regardless of whether it's true or not. This constant exposure to social media and information can have a negative effect if we don't know how to turn it off effectively. And some studies have shown that it can be particularly detrimental for adolescents and young adults. Joining me today to look at some of the impacts of social media and other technologies on our mental health is Mark Debus, the clinical manager of behavioral health at Sedgwick. Thank you so much for joining us today to talk about this interesting subject, Mark.
People
CCC Announces Appointment of New Board Member
Healthcare and Technology Executive Neil de Crescenzo Brings Decades of Experience in Scaling Technology and Value Creation
CCC Intelligent Solutions Holdings Inc. (CCC) (NASDAQ:CCCS), a leading cloud platform provider powering the P&C insurance economy, is pleased to announce the appointment of Neil de Crescenzo to its Board of Directors. Mr. de Crescenzo brings decades of expertise in the healthcare and technology sectors and proven success in deploying technology at scale across industries. His addition strengthens CCC’s commitment to bolstering its market position and driving long-term value for all stakeholders.
“Githesh and the CCC team have built a tremendous business with exciting prospects for growth and transformation, and a long history of driving meaningful impact for clients and stakeholders.”
“We are thrilled to welcome Neil to our Board as an independent director,” said Githesh Ramamurthy, Chairman and CEO of CCC. “Neil has an exceptional track record in creating material value through the delivery of technology in markets critical to CCC’s growth strategy. He brings valuable insights that align with CCC’s mission to deliver intelligent solutions that empower our customers to operate at the speed of change in an ever-evolving industry. His perspective will enhance our ability to serve clients.
Clemens Jungsthöfel to succeed Jean-Jacques Henchoz as CEO of Hannover Re - Reinsurance News
Jean-Jacques Henchoz, Chief Executive Officer (CEO) of large European reinsurer Hannover Re, has decided to leave the company and will be succeeded by Clemens Jungsthöfel, effective April 1st, 2025.
Henchoz, who has led the reinsurer since 2019, requested not to extend his expiring contract, and will leave the firm’s Executive Board on March 31st, 2025.
During his tenure, Hannover Re’s market capitalisation has almost doubled to around €29 billion, and over the past six years, the return on equity has averaged 14.7%.
“My time leading Hannover Re has been very fulfilling, both professionally and personally,” said Henchoz, who will remain closely associated with the company.