AI in Insurance
When AI escaped the sandbox: Early insurance lessons from an AI security incident
By Jonathan Davies, Sean Scranton and Michelle Lawson Hughes
A recent AI security incident offers insurers and organizations an early real-world glimpse into how advanced AI agents could create cyber risk beyond intended boundaries.
What to know
A recent security incident has provided a rare real-world example of an autonomous AI system creating cyber exposure beyond its intended environment. This event highlights a risk long discussed in theory: advanced AI agents autonomously discovering vulnerabilities, obtaining access and affecting third-party systems.
However, this should not be seen as evidence that current AI tools routinely present this level of risk.
The incident merits attention from cyber insurers. It does not, however, establish that an AI-driven cyber catastrophe is imminent or that the broader cyber-insurance market has been materially affected.
News
JPMorgan CEO Dimon leads cross-industry effort to tackle AI risks
JPMorgan Chase CEO Jamie Dimon is urging corporate leaders to join a U.S.-focused industry group to address risks posed by AI, as corporate America rapidly adopts the developing technology, two sources familiar with the matter said.
Mr. Dimon has personally reached out to CEOs of other large and major regional banks and IT companies to enlist them in the initiative, which he is expanding from a group that JPM helped found called the Alliance for Critical Infrastructure, the sources said.
The ACI and Mr. Dimon have also communicated with other prospective members in an effort to schedule calls in August to discuss collaboration, the sources said.
The outreach, which started in July, includes over 40 companies spanning financial services, energy, water, utilities, telecommunications, airlines, railroads and other critical infrastructure industries that rely heavily on technology, the sources said. The ACI has not disclosed results of the effort so far.
Financial Results
Mercury General Corporation Announces Second Quarter Results and Declares Quarterly Dividend
Mercury General Corporation (NYSE: MCY) reported today for the second quarter of 2026
Combined ratio,89.6 for six months 2026 and $3.2B in Direct Written Premium. Consolidated highlights
Hagerty Reports Second Quarter 2026 Results
- First half 2026 Written Premium grew 19% year-over-year to $713 million
- Added a record 279,000 new members in the first half of 2026, with policy in force growth of 19% year-over-year to 1.9 million members
- First half 2026 Earned Premium increased 42% to $492 million
- Transition to Markel Fronting Arrangement on January 1, 2026 resulted in decrease to reported revenue as previously disclosed
Hagerty, Inc. (NYSE: HGTY) makes it easier and more enjoyable for car enthusiasts to drive and celebrate the vehicles they love — through specialty vehicle insurance, live and digital auctions, engaging media and events, and the Hagerty Drivers Club, the world's largest membership community of car lovers. Today the company announced financial results for the three and six months ended June 30, 2026.
"The first half of 2026 has been the best in Hagerty's history, and our results give us the confidence to significantly increase our full year outlook. We delivered year-to-date written premium growth of 19% and Adjusted EBITDA gains of 32%, reflecting the compounding power of our model as we now control 100% of the economics on our U.S. book. This is what forty years of building trust — one member, one partner, one car at a time — looks like when the flywheel hits its stride," said McKeel Hagerty, Chief Executive Officer and Chairman of Hagerty.
State News
Pritzker signs bills allowing state to review insurance rate hikes
[Ed. note: The Illinois Department of Insurance currently has authority to "review' proposed rates and perform "in-depth review" for changes over 10%. Technically not approval but certainly ascertaining if within actuarial based standards. Controlling what are considered to be excessive rate requests is a slippery slope as experienced in states like California]
Illinois will begin reviewing homeowners and auto insurance rate hikes under two new laws signed by Gov. JB Pritzker.
Gov. JB Pritzker signed legislation Tuesday that will give the Illinois Department of Insurance authority to review and approve rate changes for homeowners and automobile policies.
“It’s not asking too much to say to insurance companies, if you’re telling your customers that rate hikes are necessary, you should be able to prove why,” Pritzker said at a bill signing ceremony in Chicago.
Prior to the bill signings, Illinois was one of only two states, with Wyoming, that did not exercise regulatory control over insurance rates.
The new laws, which take effect July 1, 2027, prohibit companies from charging “excessive, inadequate, or unfairly discriminatory” rates and prohibit them from shifting the cost of losses in other states onto Illinois consumers.
Climate/Resilience/Sustainability
Orion180 Insurance Launches Customizable Private Flood
Alternative to the NFIP with Less than 2% of Homes Insured... Orion180 Insurance, a leading provider of flexible, customer-centric homeowners and flood insurance solutions, today announced the launch of its Residential Private Flood Insurance in California.
The solution provides innovative, competitive, and comprehensive flood coverage, offering individual risk analysis and customizable policies beyond traditional options such as the National Flood Insurance Program (NFIP).
While California is most associated with severe wildfire risk, CoreLogic projects that within the next 25 years major cities like Los Angeles, San Diego, and San Francisco will have a higher flooding risk due to atmospheric rivers, urban development, aging infrastructure, and wildfire burn scars. These environmental changes have extended residential flooding predictions beyond typical high-risk zones, further underscoring the need for better and more private flood options. Currently, less than 2% of homeowners in the ecologically evolving state are insured.
Claims
CLARA Analytics launches new integration between its Triage platform and CLARA DocIntel Pro
CLARA Analytics, a provider of artificial intelligence (AI) technology for commercial insurance claims optimisation, has introduced new integration between its market-leading Triage platform and CLARA DocIntel Pro.
This is the industry’s first true unification of document intelligence and predictive claims analytics on a singular platform, demonstrating an automated data path to convert unstructured medical and legal files into active claims-driving insights.
CLARA Analytics explained that solutions are disconnected due to the current insurtech marketplace. Traditionally, commercial carriers had to choose between standalone document extraction tools, which merely extract text or summarise pages out of context, and isolated claims analytics tools that only process basic structured data.
The company states that CLARA prevents this paradigm by associating complex document insights directly with individual claims to optimise predictive modelling.
“For years, the insurance industry has treated document extraction and claims guidance as two separate workflows,” added Heather Wilson, Chief Executive Officer at CLARA Analytics.
Hi Marley Launches Unite™, Giving Carriers More Control Over Insurance Communication Across the Service Provider Network - Hi Marley
Hi Marley, the Intelligent Communication Platform for P&C Insurance, today announced the launch of Unite™, Hi Marley’s insurance-specific conversational network that helps carriers coordinate communication across their service provider network directly within Hi Marley. While initially focused on claims workflows, Unite will ultimately expand beyond claims into other P&C insurance use cases.
Claims are often resolved through a complex network of adjusters, rental, towing, and claims payment providers, repair facilities, salvage partners, property inspection providers, managed repair providers, and more. For policyholders, that complexity can show up as disconnected texts, unfamiliar phone numbers, unclear next steps, and confusion about who to trust.
Unite helps carriers simplify that experience by bringing approved service provider communication into the same conversation policyholders already use for their claim. Policyholders receive clearer updates in one familiar thread, while adjusters gain more visibility into service provider activity and can initiate workflows without leaving Hi Marley.
Launching with a growing list of partners including CCC Intelligent Solutions, Plnar, Hover, Sedgwick Auto, Enterprise Mobility, Agero, and One Inc.,
“Insurance is a complex network of carriers, agents, repairers, rental companies, and technology partners, but policyholders should never have to feel that complexity,” said Mike Greene, Co-founder and CEO of Hi Marley. “Unite helps carriers bring more of the insurance experience into one clear, familiar conversation. By reducing confusion, missed handoffs, and disconnected outreach, carriers can create a better experience for policyholders and give their teams more visibility into the moments that matter.”
Federato launches Claims to close underwriting loop
Federato, the AI-native platform for the full policy lifecycle, offering underwriting, policy administration and billing tools for insurance carriers, has introduced Federato Claims, an end-to-end claims management system built on the same technology foundation as the rest of its platform.
The new product is designed to translate coverage decisions, reserve changes and adjuster reasoning into structured data that flows back into underwriting, pricing and product teams while a claim remains open, rather than waiting until it has been resolved.
Federato says this real-time exchange is possible because Claims shares the same AI-native architecture and federated context graph as its underwriting, policy administration and billing modules.
The company notes that claims can make up as much as 80% of an insurer’s costs, yet it remains the part of the policy lifecycle where carriers typically have the weakest visibility into their own decision-making.
How Aspire General Turned an Early Technology Bet Into Claims Aut
Kyber and Aspire General Insurance today released a new video case study exploring how an early partnership between a fast-growing regional carrier and a four-person startup evolved into a long-term collaboration that helped modernize claims operations, return valuable time to adjusters, and shape the growth of both organizations.
As Aspire expanded, its leadership set out to streamline claims operations while preserving the service policyholders expected. Rather than selecting an established vendor, the company placed an early bet on Kyber, recognizing the opportunity to build with a team that could evolve its technology alongside Aspire's business.
The case study captures how that decision unfolded, revealing how close collaboration, candid feedback, and a shared commitment to improving the claims experience transformed a software implementation into a lasting strategic partnership.
“We saw the technology, we saw what the team was capable of, and we decided to make an investment in our future and [Kyber’s] future as well,” said Sam Rea, President and Chief Technology Officer at Aspire General Insurance. “[Kyber] shared a lot of the same attributes that we saw in ourselves. Investing in Kyber, we felt like we were putting the same investment in ourselves.”
Announcements
Convr® Closes Underwriting Loop with d3 Desk: Rate, Quote, and Bind from Inside the AI Workbench
Convr®, the company that invented the AI-native commercial underwriting workbench, today announced the strategic positioning of d3 Desk, the rating and quoting engine inside its Convr AI Underwriting Workbench. The d3 Desk module gives commercial P&C carriers and MGAs a single environment to rate risks, generate quotes, and initiate bind, eliminating the workflow gaps that have historically forced underwriters to jump between systems.
For years, commercial underwriters have relied on disconnected tools to move from submission to bind. The fragmentation slows decisioning, introduces re-keying errors, and adds operational friction confounding scale. By incorporating rate and quote natively inside the Convr AI Underwriting Workbench — with API integrations to any partner system even manual spreadsheets — d3 Desk completes the binding process with a new industry level of productivity.
"Our customers have been asking for one thing consistently . . . close the loop," said John Stammen, Chief Executive Officer at Convr. "They love what we do upstream with intake and risk analysis, but the moment an underwriter has to leave the workbench to rate or quote, the productivity gains are diluted, but d3 Desk solves that. Underwriting teams can now move from a submission landing in their inbox to a quote being delivered without ever leaving our workbench."
Telematics, Driving & Insurance
The Car Remembers What Happened; Human Beings Can’t
At 22 years old, as a claims adjuster trainee, I began taking accounts from people who had been in accidents. One of the head-scratchers I heard most consistently was that the other driver was speeding. So, I would ask how they knew. More than once I got back a version of the same sentence:
“I never saw him before the impact, so he must have been flying.”
Executive Summary
Human beings have been terrible witnesses since human beings were invented. Vehicle performance data—not the robotaxi—is the automation story the insurance industry cannot afford to miss.
The absence of a memory, offered as proof of a fact. And the person saying it is not lying. They believe it. A crash takes about a second-and-a-half, and then everybody starts remembering it differently.
The most consistent piece of evidence in any claims file is what the driver said took place. It is also the least reliable. Human beings do not accept blame readily; we never have. What has changed is that there is now something else in the car to blame, and the account is more and more often some version of “I didn’t do anything. The car did it.” READ ON
The author of this article, Mike Nelson, hosts the Mobility Nerd Heard podcast. The next episode, “The Consequences of Not Conducting a Reasonable Investigation Using Smart Vehicle Data,” airs Wednesday, Aug. 5 at 11:30 a.m. ET.