AI in Insurance
Building the future of insurance with AI: Deloitte Report
How this tech is changing the industry
Could slow adoption of artificial intelligence (AI) exclude some insurers from the forefront of innovation? Even risk-averse insurers are now investing in AI, with 76% of surveyed US insurance executives reporting generative AI implementations in their organizations. Some teams are integrating generative AI into claims and customer service for better scalability and risk management, while others are utilizing AI for data management and control in an effort to mitigate risks and ensure compliance.
This year’s 2025 global insurance outlook report takes stock of what is essential for AI success. Between company culture, talent acquisition, technology adoption, and more, one thing is clear: insurers who delay in embedding AI into their business strategy face an ever-increasing risk of falling behind.
Report: One in four insurers using AI to assess storm risks
A new survey from ZestyAI, a provider of climate and property risk analytics powered by artificial intelligence (AI), has revealed shift in how insurance companies are managing the growing threat of extreme weather events.
According to the survey of 200 senior property and casualty (P&C) insurance executives, one in four insurers are now using AI to help assess the risks associated with severe storms. The adoption of AI risk models is also expanding in wildfire assessments, with 18% of insurers incorporating AI into their risk evaluation for wildfires.
The research highlighted a strong belief within the insurance industry that AI will be instrumental in managing climate-related losses. Seventy-three percent of executives surveyed agree that AI models are crucial for addressing the increasing frequency and severity of weather events exacerbated by climate change.
Assessing catastrophe risks
Despite the growing use of AI, the industry remains divided on the most effective risk models. Traditional actuarial models, based on historical data, are still favoured by 54% of respondents for assessing wildfire risks.
For severe convective storms, stochastic models—those that simulate a range of possible outcomes based on random variables—are preferred by 45%. While only 20% of executives view AI and machine learning models as the most accurate, 27% believe that a combination of different modelling approaches offers the best predictions for managing risk.
AI Weather Models Have Shown Promise This Hurricane Season
When Hurricane Beryl was rushing across the Atlantic basin in July, the weather forecasting tool made by Google Deepmind, the tech company’s artificial intelligence unit, saw something other models missed.
Deepmind’s AI-driven program, called GraphCast, forecast the storm would take a sharp turn away from southern Mexico to southern Texas nearly a week earlier than conventional forecasts did — and it was right.
Commentary/Opinion
5 ways startups can survive insurtech’s ‘second wave’ - Insurance News
As the insurtech industry enters what’s being called its “second wave,” industry executives are suggesting companies target five key areas to scale their businesses and sustain growth.
“If you think about what’s necessary for a fully disruptive company, insurtech or otherwise, to be successful in insurance, I think it is extremely difficult and requires huge scale,” Robert Sargent, co-founder, the InsurTech Association, said.
To achieve the scale needed to grow their business, experts said insurtechs should focus on:
Strategic partnerships
Technology solutions
Innovation
Customer-centric focus
Sector-specific strategies
“In the second wave, where it’s more enabling technology and startups can be more integrated into the insurance ecosystem, including traditional insurance organizations, it means that those startups can be significantly more focused and can probably achieve success much faster,” Sargent said.
Climate/Resilience/Sustainability
Florida insurer calls reports of denied claims after Hurricane Debby ‘misleading’
Citizens Property Insurance says the percentage of denied claims was much lower than some news outlets reported..
Despite multiple reports that Florida's Citizens Property Insurance denied 77% of claims related to Hurricane Debby in August, the company told PropertyCasualty360.com that percentage was misleading.
“Just 44% were denied while 29% did not exceed the hurricane deductible, were withdrawn, invalidated, or were duplicate claims,” said Citizens spokesperson Michael Peltier.
“As of today, approximately 73% of 2,991 Hurricane Debby claims have been closed without payment,” he added. “Most of Debby's damage was caused by flood, which typically is not covered by traditional insurance but handled by the National Flood Insurance Program or private companies that specialize in flood coverage. Unfortunately, the 77% denial rate figure is both outdated and misleading.”
Fraud
NICB Champions International Fraud Awareness Week
The National Insurance Crime Bureau (NICB), the nation's leading not-for-profit association dedicated to preventing insurance fraud and crime, is joining organizations worldwide in recognizing International Fraud Awareness Week from November 17-23 by launching a new set of fraud detection trainings and sharing consumer-focused tips throughout the week.
This annual campaign, led by the Association of Certified Fraud Examiners, shines a light on the costs and impacts of fraud, including insurance crimes that hurt millions of Americans each year.
Insurance fraud – ranging from staged accidents, falsified claims, and billing fraud scams perpetrated by unscrupulous care providers and contractors – costs hundreds of billions annually. During International Fraud Awareness Week, NICB will launch a public awareness campaign arming consumers with practical guidance on how to identify red flags and avoid falling victim to these schemes.
"Insurance fraud is not a victimless crime. It drives up costs for everyone and demands that we all foster a renewed sense of alertness," said David J. Glawe, President and CEO of NICB. "NICB is committed to empowering Americans through our partnerships with advocates, insurers and law enforcement across the U.S."
Insurance magnate pleads guilty to $2 bln fraud and money laundering scheme
The U.S. Justice Department said on Tuesday that insurance magnate Greg Lindberg had pleaded guilty to a $2 billion fraud and money laundering scheme operated through a network of companies based in North Carolina, Bermuda, Malta, and elsewhere.
Lindberg, 54, pleaded guilty to one count of conspiracy to commit offenses against the U.S. and one count of money laundering in connection with a scheme to defraud insurance regulators and policyholders lasting from 2016 through 2019, the Justice Department said in a statement.
Bear costume used in elaborate car insurance fraud scheme - ABC News
Four individuals were arrested Wednesday for allegedly attempting to defraud their insurance companies by claiming a bear had damaged their vehicles -- when in fact it was a person in a bear costume attacking the cars.
The suspects were all Los Angeles-area residents, according to a statement released Wednesday afternoon by the California Department of Insurance.
The suspects varying in age, were Ararat Chirkinian, 39, of Glendale; Vahe Muradkhanyan, 32, of Glendale; Ruben Tamrazian, 26, of Glendale; and Alfiya Zuckerman, 39, of Valley Village.
The statement said that all four were charged with conspiracy and insurance fraud.
Operation Bear Claw reveals suspects allegedly wore bear costume to commit insurance fraud
Suspects claimed on Jan. 28, 2024, that a bear entered their 2010 Rolls-Royce Ghost and caused interior damage, according to the Department of Insurance. They provided video footage of the incident, stating that it had occurred during their visit to Lake Arrowhead.
Announcements
InvoiceCloud Deploys Cloud Native ClaimCenter Accelerator into Guidewire Marketplace
InvoiceCloud, a leading solution for digital bill payment services and an Advantage level Guidewire partner, has announced its Guidewire ClaimCenter integration is now available in the Guidewire Marketplace.
With this new accelerator, insurers can offer a truly innovative claims experience that not only meets policyholders’ heightened expectations, but also drives customer convenience, loyalty, and retention in one fully cloud native solution.
“InvoiceCloud’s technology works to modernize insurance payments. Connecting it with ClaimCenter enables our shared customers to meet the increasing demand for quick, digital claims payments, while accelerating efficiency for their employees.”
This joint offering allows Guidewire and InvoiceCloud’s shared customers to harness the power of the cloud for outbound claims payments. With InvoiceCloud’s cloud native ClaimCenter integration, insurers can:
- Simplify the multiple-endorsement process with multi-party capabilities.
- Manage payments in progress and access account history in a centralized dashboard.
- Digitize outbound disbursements, including claims payments.
- Allow carriers to maintain their existing bank relationship and benefit from float of funds with open banking.
- Offer real-time payments to ensure claimants receive funds instantly.
- Ensure quality data sets with automatically augmented lists and a self-service portal that encourages suppliers to keep information updated.
“As the industry prioritizes digital outbound payments, we're delighted to deliver yet another cloud native solution that helps serve the growing demand of carriers, agents, and policyholders,” said Julie Schieni, VP, Financial Services at InvoiceCloud.
Webinars/Podcasts/Interviews
[Ed. Note: Highly Recommended] Interview: Maryling Yu, CCC Intelligent Solutions - CollisionWeek
Yu provides an in-depth look into the CCC Moments of Truth study on the key drivers of customer satisfaction.
In October, CCC Intelligent Solutions (NASDAQ:CCCS) released findings from its Moments of Truth study identifying the key drivers of customer satisfaction and retention in the auto claims and collision repair process. The study identified the critical points in the customer journey that influence satisfaction and how insurer and repairer performance is linked.
In our video interview embedded below, Maryling Yu, vice president of marketing at CCC, details how the Moments of Truth were identified, which moments have the biggest impact on satisfaction and the critical moments for both insurers and repairers and how they can be improved.
“A moment of truth is actually a concept that originated in the service industry and the idea is that a customer journey is made up of many moments that are strung together from beginning to end. And a moment of truth is one that is really important to win. So, that moment has to go well, and if it goes well, you’re headed towards a great outcome. You may even get a customer for life,” said Yu. “If it doesn’t go well, you’re headed towards a not so good outcome and you might lose that customer or get a poor satisfaction score from them. And so, this idea of the moments of truth are those moments that really matter to that satisfaction rating, and the ones that are not moments of truth really don’t impact that satisfaction rating so much.”
One of the key findings of the research was that the performance of repairers and insurers are interrelated and how they can support consumer perceptions of the other party.
News From Insuretech Connect 2024
Data-Powered Automotive Sustainability for the Eco-Conscious Customer - Solera
Forty years ago, sustainability wasn’t even on the radar for most businesses. When the concept first started gaining traction in 1987 after the publication of The Brundtland Report and in the years to follow, sustainability was often seen as a nice-to-have, idealistic goal for a far-off future.
Fast-forward to today, and sustainability has gone from an optional to a must-have for most industries, including automotive and insurance. Consumers and investors alike are no longer asking if companies are addressing their environmental impact—they’re asking how, and they expect transparent, action-focused answers.
At this year’s edition of ITC Vegas, two sessions highlighted the power of data-driven sustainability solutions: Lyne Mercier’s panel on Climate Change Adaptation Strategies and Bill Brower’s session on the Innovation Stage about Sustainable Estimatics.
Both sessions reinforced one clear message: sustainability in the automotive industry isn’t just possible, it’s necessary—and data holds the key.
The Role of Data in Sustainability
Bill Brower, Senior Vice President of Global Industry Relations and North America Claims at Solera, took to the Innovation Stage at InsureTech Connect 2024 to outline how Solera’s Sustainable Estimatics is helping companies across multiple sectors, including carriers and shops, take measurable actions to reduce their carbon footprint.
At the heart of this effort is the ability to track and calculate CO2e emissions across all three scopes—direct emissions, indirect emissions, and emissions across the value chain. Companies involved in vehicle claims and repair, are facing increasing pressure to report and reduce their carbon emissions. Brower highlighted how Solera’s emissions tracking software enables companies to measure their environmental impact, helping them calculate and report with detailed metrics for an insightful decision-making process in the auto claims journey.
2024 In Review
Multi-Shop Owners and Operators Gather for 2024 MSO Symposium - Autobody News
[Ed.Note: Since attendance at the MSO Symposium is restricted and by invitation only, this is an especially valuable report on the event and presentations]
MSO Symposium attendees learned about 2025's economic outlook, private equity interest and the future of ADAS calibrations.
The MSO Symposium, an annual one-day conference created by and for multi-shop owners and operators, was among the events kicking off SEMA week in Las Vegas today. About 400 people attended the event, the most in its 12-year history.