AI in Insurance
Is ‘lack of vision’ key to the AI readiness gap in the insurance industry?
The gap between insurance companies that are ready to adopt artificial intelligence and those that aren’t boils down to a lack of vision, according to an industry IT leader.
“Forward insight toward how AI can grow their business or optimize their cost is why there is a lag. I think that will be significant,” Raj Mohanty, Managing Principal, Capco, said.
Mohanty, who has nearly 30 years of experience building technology solutions within the insurance and banking sectors, noted that insurance companies tend to lag behind other industries when it comes to adopting new technologies such as AI.
However, he believes widespread use of AI in insurance is inevitable, and the companies that are quicker to adjust will maintain a competitive advantage.
“I think these technologies were not as great before, which is why there was not enough ‘playing around’ in the past. But we are ready now… With the advent of generative AI, the game has changed. It provides the opportunity to speed up AI readiness for every company,” Mohanty said.
AI readiness gap: A lack of vision
Artificial Intelligence at Progressive Insurance – Two Use Cases
Progressive Insurance, officially known as The Progressive Corporation, is an American insurance company headquartered in Ohio. Founded in 1937, Progressive has grown to become the most significant motor insurance carrier in the United States as of late 2022. In 2023, the company reported robust financial performance, with total revenues exceeding $55 billion. The company employs over 40,000 people globally and has offices across six continents.
The insurance company is heavily investing in digital transformation and AI. With an annual ICT spending of $2.2 billion in 2022, the company leverages AI for dynamic pricing strategies, risk assessment, telematics programs like Snapshot, and customer service enhancements. These efforts align with Progressive’s vision to innovate the insurance industry through technology while driving societal progress and equity.
This article explores two use cases of AI that support Progressive’s business objectives:
Leveraging generative AI to drive campaign effectiveness: Using GenAI to create data-driven, personalized content variations to optimize messaging and enhance audience engagement.
Accelerating time to insights with machine learning: Adopting machine learning to overcome the limitations of legacy analytics systems, enabling faster time-to-insight and more effective decision-making.
Riya Pahuja covers B2B applications of machine learning for Emerj - across North America and the EU
Research
Enlyte's 2025 Trends Report Examines 'The Year of Generative AI'
Industry leaders discuss impact on the growing utilization of gen AI and data analytics as well as strategies addressing clinical and auto challenges across the claims landscape
As the use of generative AI continues to expand, 2025 is poised to be the year this technology significantly starts to change how Americans live and work. This is especially true in the P&C industry, as companies strive to balance efficiency and costs with investments in systems, training and change management.
To help position insurance and automotive leaders in managing this shift as well as better understanding and managing other key issues impacting P&C, Enlyte has issued its 2025 Envision Trends Report. The annual publication delivers valuable insights from prominent subject matter experts at Enlyte through an extensive report covering today's most pressing issues. Aside from AI, this also includes topics such as using data analytics to better identify and address mental health's influence on claims and understanding the impact of increased provider consolidation on workers' compensation.
"Our unique perspective spanning auto collision, casualty, and workers' comp claims, coupled with our history of pioneering AI innovations, positions us to offer valuable insights into the evolving landscape of P&C claims," said Alex Sun, CEO of Enlyte. "In this year's report, we explore emerging trends and technologies shaping our industry, while also addressing crucial factors like mental health strategies and potential regulatory shifts that will impact the future of claims management."
The 2025 Envision Trends Report authors examine challenges industry leaders currently face and offer insights into meeting these issues and realizing future goals. Its seven chapters focus on topics P&C and collision repair leaders care about most.
[Ed. Note: Highly Recommended] --- Romans Group's Profile of the Evolving U.S. and Canada Collision Repair Marketplace
From increasing dealership body shop sales to aggressive MSO consolidators, here’s a look at the collision repair industry trends in North America.
Vincent Romans, The Romans Group
Los Angeles Wildfires
State Farm to offer renewals to policyholders affected by L.A. fires - Los Angeles Times
State Farm said Wednesday that it will offer renewals to residential policyholders affected by the Los Angeles County fires that it had previously planned to drop.
The decision applies to policies held by homeowners, owners of rental dwellings and residential community associations, which include condominium associations.
The charred remains of 83-year-old Erliene Kelley's home on Tonia Avenue in Altadena, at left, burned by the Eaton Fire, on Friday, January 10, 2025. It has been 48 hours since her granddaughter Briana Navarro has heard from her.
First, they lost their home insurance. Then, L.A. fires consumed their homes
The figure includes roughly 70%, or 1,100, of the 1,626 residential policies still in place in Pacific Palisades’ primary 90272 ZIP Code — and thousands more in the neighborhood and elsewhere in the county. The offer does not apply to policies that had already lapsed when the fire started on Jan. 7.
The Department of Insurance said that among the thousands of policies State Farm had targeted for nonrenewal, more than 7,600 were in the Palisades fire zone. There were also 525 more in San Gabriel Valley’s Eaton fire and additional policyholders elsewhere.
It’s unclear how many of those policies had already lapsed when the fires began.
“We are in the business of helping people recover, and that’s exactly what we’re doing right now to those impacted by the fires. It’s just such a horrible tragedy,” said Jon Farney, chief executive of State Farm Mutual Automobile Insurance Co., parent of State Farm General, its California subsidiary.
Farney made his remarks in an extended interview Tuesday before the insurer told The Times about the policy change
California lawmakers propose measures to address wildfire insurance challenges
California lawmakers are advancing legislation to enhance the California FAIR Plan's claims-paying capacity and expedite the insurance claims process for homeowners amid the Los Angeles wildfires.
The proposed FAIR Plan Stabilization Act would authorize the California Infrastructure and Economic Development Bank to issue catastrophe bonds to support the FAIR Plan during liquidity shortfalls, according to a report from AM Best.
“The loss in Southern California is inconceivable,” said Assemblymember Lisa Calderon, chair of the insurance committee and co-author of the legislation. “AB 226 will alleviate some of the uncertainty that FAIR Plan policyholders may encounter as a result of this tragedy.”
Los Angeles Needs to Fireproof Communities, Not Just Houses | WIRED
As houses continue to burn in Los Angeles, officials have already started talking about rebuilding the city. “We’re going to rebuild this remarkable community and we’re going to come back,” California governor Gavin Newsom said in a call with President Biden on January 10.
Los Angeles mayor Karen Bass added her own call for action. “We’re going to recover, and we’re going to rebuild and we’re going to rebuild better.”
The challenge facing the city is huge. An estimated 12,000 structures have been destroyed in the Palisades and Eaton fires, neither of which has been contained. At least 25 people have been killed by the blazes, which are on track to be the costliest wildfires in US history. But as the risk of devastating wildfires increases with climate change, the calls to rebuild Los Angeles raise a series of tricky questions: How and where to rebuild—and whether to rebuild at all.
In November 2018, the Camp Fire razed most of the northern Californian town of Paradise to the ground and killed 85 people. The population of Paradise is now just a third of its pre-fire levels, but the town is rebuilding in a way that residents hope will make future wildfires less devastating.
“We’ve gone from fire suppression to that not even being possible once there’s an ignition,” says Dan Efseaff, who started working for Paradise Recreation and Park District about a year before the Camp Fire.
One way to lessen the spread and intensity of fires is to reduce the amount of flammable vegetation—often called “fuel”—through prescribed burns, cutting back shrubs, and allowing animals to graze. Forest trails can also give authorities access for fuel management, provide a break in vegetation that slows fires down and, as was the case in the Camp Fire, provide evacuation routes in an emergency.
The Los Angeles Wildfires: An Economic Disaster, Management Failure, and Insurance Industry Turmoil - Insurtech Israel News
How Could the InsurTech Industry Have Minimized the Damages of the Los Angeles Wildfires?
The devastating wildfires in Los Angeles are estimated to have caused immense economic damage, with assessments ranging from $10 billion to $150 billion. AccuWeather, part of the CoreLogic group, estimates the damage closer to the higher end of the range. These estimates take into account the fact that the fires are still active in less than 25% of the area they have covered, making precise calculations difficult.
In addition to the direct damage to property, there are significant secondary damages, such as the effects of smoke on public health. Experts warn it will take years to assess the impact on respiratory diseases and other chronic illnesses.
The overlap of residential and business areas only exacerbates the situation. Many businesses were directly affected by the fires, leading to significant revenue losses and impacts on the local economy. The evaluation of these damages also raises questions about crisis management and how authorities prepared for such an event.
California Fires Expected to Speed Digital Payouts for Insurance
The billions of dollars in damages — and the incalculable emotional toll — of wildfires raging through the Los Angeles area will reverberate for years.
The wildfires have leveled neighborhoods, schools and stores, and the insured losses are estimated to top more than $20 billion, with an additional $60 billion in economic losses. The latest natural disaster represents another challenge to the state, where insurance companies have been boosting their rates or pulling out of the market entirely.
As Ian Drysdale, CEO of One Inc told Karen Webster, “People are going to have to think through how insurance works, where they want to live and how they want to live — because the cost of living in certain areas is continuing to increase.”
Includes Video Interview with Ian Drysdale, CEO, ONE Inc.
NICB Warns California Residents About Fraudulent Contractors Following Catastrophic Wildfires
Following the devastating wildfires in Southern California, the National Insurance Crime Bureau (NICB), the nation's leading non-profit association dedicated to preventing insurance fraud and crime, urges residents and business owners to know the signs of fraudulent contractors and to take the necessary precautions to protect themselves, their property, and their loved ones.
"Wildfires pose a serious threat to the livelihoods of hardworking families and business owners," said David J. Glawe, President and CEO of the National Insurance Crime Bureau. "After these catastrophic events, fraudulent contractors pour into hard-hit communities to take advantage of residents who have already lost everything. Residents need to be vigilant and know the signs of a fraudster, so they can avoid being victimized a second time."
NICB agents have been deployed to the region to work with local, state, and federal law enforcement agencies, as well as insurance companies, to help prevent fraud from occurring and to utilize NICB data and intelligence resources to investigate all reported cases of fraud. Additionally, NICB is working with state and federal government agencies and insurance industry trade associations on anti-fraud efforts.
Recommended Events
InsurTech Hartford Symposium - April 29th & 30th
https://insurtechhartfordsymposium.com/index.html
April 29th & 30th
Connecticut Convention Center
The InsurTech Hartford Symposium is a highly immersive conference experience that brings together great minds and world-class leaders offering the perfect ecosystem to Learn, Connect, and Unwind.
The InsurTech Hartford Symposium is in its fifth year and back in Downtown Hartford. People in the region are getting excited to have the event return to their backyard, and people from out of state are happy for us to be closer to transportation hubs such as high-speed trains and BDL airport.
Pre-Day Event ; EmpowerHER, April 28th & 29th
Join us for the Inaugural Insurance Thought leadership Event This one-of-a-kind gathering designed to celebrate and empower women and allies in the InsurTech industry. Partnering with the InsurTech Hartford Symposium, we’re offering this exclusive pre-event to maximize your experience in Connecticut and provide you with opportunities to connect, learn, and grow.
This in-person event is dedicated to inspiration, connection, and celebration—a chance to engage with thought leaders, gain career-boosting insights, and foster meaningful relationships that will propel your career in insurance and technology. REGISTER
InsurTech Consulting, LLC and ‘Connected’ newsletter are proud supporters of InsurTech Hartford Symposium and EmpowerHER, available to assist with sponsorship opportunities. Please contact alan@insurtechconsult.com
Awards
The Institutes RiskStream Collaborative Announces Winners of Its 2024 Leadership Award
The Institutes RiskStream Collaborative® is pleased to announce that Allstate, Nationwide, CSAA Insurance Group and Liberty Mutual are the 2024 winners of its Leadership Award. This award recognizes these organizations’ efforts to spearhead critical auto insurance-related projects within RiskStream Collaborative throughout the past year.
Specifically, the Leadership Award honors companies that have demonstrated exceptional commitment to RiskStream Collaborative by championing the pilot of the RAPID X auto claims data-exchange solution. It celebrates their visionary leadership, unwavering dedication and collaborative spirit, all of which have been instrumental in advancing the RAPID X solution within the auto insurance industry. Along with their leaders, these companies exemplify innovation, creative problem-solving and a steadfast dedication to improving the auto industry through cutting-edge technologies like RAPID X.
Adam L’Italien, chief innovation officer at Liberty Mutual, remarked about winning the Leadership Award, “On behalf of our team, we are honored to be recognized by the RiskStream Collaborative. The award is a testament to the power of collaboration and innovation in driving meaningful change in the insurance industry.”