6 AI predictions for property insurance
Insurers are no strangers to large-scale technological change, but 2020 has been unique in the magnitude of the change. Incumbents spent much of 2020 moving complex IT infrastructures to the cloud and implementing new remote risk assessment technologies, in order to continue to serve their customers safely and efficiently. .
While individual property and casualty lines of insurance have suffered a different impact from COVID, carriers generally appear to be going through the pandemic with their financial health intact, as well as an increased appetite for digitization. Personal Auto Became More Profitable Due To Decreases In Kilometers Traveled, Business Owner Policies (BOPs) Navigate Potential Litigation Regarding Business Disruption, While Owners Insurance Has Had An Impact relatively moderate. Overall, carriers were pressured to speed up some digitization initiatives and managed them relatively efficiently, resulting in accelerated motivation and increased confidence in their need and desire to adopt digitization technologies. emerging.
As carriers rapidly increase their comfort level with digitization, what emerges is a growing need to sift through the stacks of available data for actionable insights, in other words: find more needles, don’t create no more haystacks. Against this background, here are six predictions of how owners and commercial real estate insurers will think about and implement automation and AI solutions in 2021:
- Carriers will continue their organizational investments in underwriting automation and straight-through processing. This trend started a few years ago, but COVID was a real shot. In the short term, carriers are looking for “easy” implementations or “enterprise” solutions for faster internal gains. But as data consumption architectures continue to mature and the potential for automated processes becomes clearer, we are seeing more complex implementations. Often times, with increased complexity comes a need for increased clarity. As such, carriers will increase their reliance on organized and highly predictive information to fuel these processes.
- Automated and remote risk assessment has its time: Imagery-based property analysis solutions have “crossed the chasm” and are moving from validation to expansion. This includes the geographic expansion of some states to regional or national business books, and an expansion of use cases, from easy-to-implement book analysis (identifying high-risk policies), to integrations. of data at quote time and automated change. detection for smarter renewals. Additionally, the imaging space is heating up, with more and more participants and resolution options. Remote risk assessment tools and property analyzes that use imagery will only improve in terms of coverage, recency and accuracy and help carriers refine any policies in effect or quotes that require the more urgent an action or manual review.
- AI-powered forest fire solutions will be key: 2020 was not all rosy for property insurers. Namely, CAT events, including a record number of named hurricanes and a record acres burned in California, have caused losses. The latest AI tools can not only quantify regional risks and hazards, but also property specific vulnerability, such as the property’s vegetation cover. Understanding the real impact of specific risk mitigation options, like cleaning up that brush, can be the common ground on which insurers, DOIs, homeowners, and consumer advocacy groups can come together to tackle the growing threat of wildfires in the western United States. For carriers, these technologies will allow more granular and transparent risk mitigation, selection and pricing.
- AI-powered pre-subscription is coming: I wrote on pre-subscription last year, and we’ve seen a number of insurers and MGAs look to test this new, proactive approach in 2021. With more accurate and predictive ownership data available through geospatial data providers, carriers can look to across states, regions, or even across the United States to identify the risks that most closely match their eligibility criteria, build a target list of hundreds of thousands of homes, and then research the exact type of business they want. ‘they wish. It can be more expensive at the top of the funnel, but the loss rates can be more finely crafted over the life cycle of a policy.
- Self-Inspection Solutions Continue to Make Advances in Claims Handling: 2020 has elevated self-inspection solutions as another option in the inspection toolbox. Today, this area is becoming increasingly crowded as self-inspection companies, which take advantage of computer vision, compete for large insurance customers. Recent rounds of funding, including additional funding for Flyreel and Hover, from State Farm, Travelers and Guidewire, show just how much this space is really heating up. So how do they stand out? Bringing in-house insurance-specific experts and ensuring they develop solutions tailored to specific insurance use cases, such as claims, to ensure they provide data impactful.
- Commercial property insurance is in the AI spotlight: If the 2000s were the decade of auto carrier innovation, and the 2010s saw technological leaps in home insurance, then the 2020s will be the era of innovation in commercial real estate. Already, leading insurers like The Hartford and Chubb are actively implementing new data sources and technologies in commercial lines. Digital MGAs like Attune and Embroker are making waves with user-friendly interfaces for brokers and policyholders and straightforward automated workflows. Finally, vendors like Bold Penguin and Chisel AI are implementing AI-enhanced exchanges and automation for underwriting.
So what do these six trends have in common? In 2021, carriers will be looking for more AI needles and less data haystacks. Carriers don’t want another huge mine of data sifting through. Machine learning can help identify needles (those critical data points like roof condition or vegetation density) that predict losses. It’s these risk-aligned data signals, along with their thoughtful implementation, that help carriers make better decisions, faster. An additional innovation that accompanies AI-powered data are confidence scores, which provide granularity around the reliability or uncertainty of a specific data point. The most advanced carriers will dive deeper into these nuances in 2021, in a world where data isn’t quietly right or wrong and where understanding these gray areas can unlock powerful new decision-making capabilities.
Now more than ever, owners and commercial insurers are looking for precise AI solutions that deliver specific value, for specific lines of business, and fit into workflows in a way that makes sense for them. unique approach to the insurance offer. Whether it’s a mass market, top-of-the-funnel approach with highly automated straight-through processing; or accept a greater proportion of policies and deal with problems upstream with increasingly advanced claims settlement solutions; or drive hyper-targeted marketing with pre-underwriting – in 2021 there are powerful AI options for every type of carrier and every approach … with insurers’ appetites for innovation to match.