The user is brought to a messaging application where they can explain their situation to a chatbot named Jim. ... premium, commissions and fees, will be made solely by the insurer underwriting the insurance … However, as the buzz and perceived benefit around digitization, advanced analytics, machine learning and, specifically, AI continues to grow, many insurers are starting to take notice. Artificial Intelligence and Underwriting The security of experience. Improving Customer Experience AI is allowing that in a much bigger way than was ever possible before.” As such, their service does not seem to be on the market yet. In this post, I will showcase a solution for a fully automated underwriting process consisting of roughly five steps—solving major challenges in structuring, extracting and analyzing unstructured data. Then, Cape Analytics’ software uses machine vision to analyze satellite images of the property at the address. The company does not provide any demonstration videos for its software. These plants employ around 1.5 million workers in this country. Aon has formed a strategic alliance with Zesty.ai, a San Francisco-based insurtech startup, which uses artificial intelligence (AI) to enhance insurers’ property underwriting. One of the best use cases for AI is in the underwriting process for loans. With somewhere around 2,000 artificial intelligence (AI) startups out there, applications have been identified across every single sector you can think of. If the system determines the claim to be legitimate, the company says it will automatically approve the claim if it isn’t too complex. In fact, the company has raised $180 million — far more than any other company listed in this report. The Policyholder Pulse blog provides news and insights on all aspects of insurance coverage law. We hope that this article allows business leaders in insurance to garner insights they can confidently relay to their executive teams so they can make informed decisions when thinking about AI adoption. Since its inception, people in the insurance profession have been evaluating data on risk, value, and other factors in order to make their decisions. Below is a short 2-minute video, found on Elafris’ website, demonstrating how the chatbot works to allow clients to file a claim: Elafris was founded in 2016 and seems to be in its very early phases of funding, but we could not find any exact number as to how much they have raised so far nor from whom they raised that money. However, integrating and cultivating publicly available data on insureds has the potential to allow a more effective and efficient risk assessment. It is quite a costly task, which requires qualified staff, time resources and boring paperwork. Elad Tsur is co-founder and CEO at Planck Re. Utilizing Data from Connected Devices That said, there are a few AI trends leading the industry that seem to have garnered collective support from insurers as ways to improve or expedite the underwriting … Planck Re’s software is not yet on the market. Tractable seems further along both in their funding and their use of AI. Daisy claims users first upload at least two years of “operations data” into their software. Augmented automated underwriting is an example of the realisation of AI’s promise. We were also unable to find any C-level executives with AI experience on the company’s team. Reinsurance Group of America, Incorporated is a leader in the global life reinsurance industry. The new banking business models include the digitalization of customer processes, including account opening and closing. If it is, the software notifies the insurance agent, and the agent can then decrease the payout that they intend to provide the client based on the payouts that past clients received for similarly damaged vehicles. Many users argue that artificial intelligence and machine learning will be the end of insurance agents as a trusted source for proper protection against financial losses. Underwriters at Argo Digit… • These use cases are being used across the entire insurance value chain • Artificial Intelligence is used here as a broad terminology that refers to the modeling methods, tools and platforms, applications, big data utilization, and the thought process for problem solving in the field of Artificial Intelligence Overview 2 Sales & Marketing In particular, property and casualty line underwriting, which is much more complex, will continue to require human decision makers. Chatbot solutions appear to be the most mature claims processing technologies for insurers as of now, but only Lemonade claims to be able to automate claim payouts entirely. InsurTech companies are leveraging Artificial Intelligence (AI) to conquer more ground in today’s digital world. We can infer this data includes historical customer data, such as their ages, blood pressures, locations, etc. He is currently a board member at Fiverr, which he also co-founded. Artificial Intelligence: A Boon for Insurance Underwriting? That said, complete claims automation does not seem to be readily available as a B2B solution. Their value proposition seems lofty, but we could infer it might work in a manner similar to Cape Analytics by leveraging machine vision. Private training for companies, delivered as a mixture of lectures and discussions, with practical exercises and further action planning. In fact, they started their series A round of funding in July 2018, raising $12 million from Israeli firms. Every Emerj online AI resource downloadable in one-click, Generate AI ROI with frameworks and guides to AI application. Time will tell if the company can secure funding from Silicon Valley firms, which will likely require their software to have a robust foundation in machine learning or natural language processing (NLP). That said, there are a few AI trends leading the industry that seem to have garnered collective support from insurers as ways to improve or expedite the underwriting process. Are there any common trends among these innovation efforts? Input data must be consistent, accurate and recorded in real-time to be valuable. The system also pulls in data about the date of the building’s construction, as well as any details of remodeling done on the building and permits associated with it. In the past few decades, insurance companies have collected vast amounts of data relevant to their business processes, customers, claims, and so on. Similar to many of the companies in this report, Daisy Intelligence does not offer case studies for its underwriting software, but it does provide details regarding success for their retail solution. How could these trends affect the future of the claims and underwriting processes for insurers? Data-driven decisions of employees depend on the quality of data. Daisy Intelligence says that their staff can assist in executing those recommendations, which may mean that the system requires a robust integration process and some kind of regular contact with the vendor in order to learn or maintain it. By Charles Dugas, Insurance AI Lead, Element AI — Underwriting is all about data. Machine learning algorithms can detect correlations and patterns that are likely to beat human intelligence and may go by unperceived in a traditional evaluation process. La Momia Azteca Contro El Robot Humano (1958 - Public Domain) All of the aforementioned areas of the insurance industry that can be improved by AI – underwriting, claims, new business, retention, marketing, and operational efficiencies – are aimed at improving the experience for customers. In the video below, Tractable’s co-founder and CCO. That said, the customer had filed a claim for a coat worth around $900, and so the claim was more straightforward than claims one might find in health and auto insurance. Based on Elafris’ demonstration video, we could not determine if the company is actually leveraging machine learning in their chatbot software, and their executive teams’ lack of AI experience is a red flag. In other words, the company was able to partially forgo hiring inspectors to show up at properties and verify the existence of aspects of the property that would affect the underwriting decision. Artificial Intelligence and the Future of Underwriters Part I: Artificial Intelligence (AI) The phenomenon dubbed “artificial intelligence” could (and likely will) be one of the most impactful in terms of how our profession’s future sorts out by the mid-2020s. Through our research, we found many press outlets covering Lemonade’s assertion that the company paid a customer’s claim in three seconds. He holds an MS in computer science with a machine learning distinction from the University of Cambridge. Planck Re offers a software which they claim can help insurance agencies automate the underwriting process with machine vision. As … Planck Re is barely off the ground, and Daisy Intelligence focuses more on its retail solution. Lemonade is not a B2B AI vendor, but instead an insurance company themselves. Against this backdrop, artificial intelligence offers a potential panacea, eliminating bias in underwriting through a uniform formula that could introduce “truly individualized” risk assessments, Schreiber said. Discover critical AI applications and relevant data science terms across the insurance industry in our 9-page cheat sheet. The insurance agent would then be left with a completed ACORD form that they can then use to determine the business’ risk and make a decision as to whether or not to underwrite the business. According to our AI Opportunity Landscape research in insurance, approximately 46% of AI vendors in insurance offer solutions for claims and 43% offer solutions for underwriting. Please do not include any confidential or sensitive information in a contact form, text message, or voicemail. Below is a short 1-minute video demonstrating how Lemonade’s claims process works: Shai Wininger is co-founder at Lemonade. They’ve raised an undisclosed amount of money from JSM Capital and Manjis Holdings. That, at least, is the promise. The insurance industry has not been immune to AI’s advancement – whether implementing robo-advisors for investment management (i.e., Vanguard5 and Charles Schwab6) or applying AI to insurance and loan underwriting (i.e., the Chinese search giant … Artificial intelligence (AI) has become one of the biggest buzzwords of the digital age. Elafris also offers a chatbot-based software to insurance agencies so that they can help customers make monthly insurance payments and check the status of their claims. The partnership with Groundspeed is the latest way Liberty Mutual’s National Insurance operation uses artificial intelligence to enhance underwriting and service. After answering all of the bot’s follow-up questions, the customer will have submitted their claim in full to the insurance company. Alternatively, they could somehow plug into several databases containing the information they purport to be able to provide insurers, sifting through that scattered information to fill out an ACORD form for the insurer. There is a consensus among industry experts (both from our own insurance AI secondary research, and according to a 2017 Accenture survey report) that AI is going to be a key driver in making insurance products "smarter" in the coming 2-3 years. Tractable does not list any major companies as clients, but they have raised $34.9 million and are backed by Insight Venture Partners, Ignition Partners, and Zetta Venture Partners. Then, the customer would then wait to be contacted by an insurance representative. While we’ve previously addressed insurance coverage for artificial intelligence (AI) risks, the risk-averse culture of the insurance industry has been particularly resistant to change in its own business. Lemonade themselves admit that Jim can’t handle more complex claims and that such claims are elevated to “real Jim.”. Despite considerable chatter around AI, industry experts suggest that only relatively few insurers are actually using AI to assist in processing claims and underwriting. We're really just augmenting humans at this point." The insurance industry has not, and likely will not, universally harness AI technology to modify existing underwriting practices. Of course, this is speculation; the company does not provide any demonstration video of their service. Previously, he worked as a research engineer at Willow Garage, which was the progenitor of several companies, such as Industrial Perception and hiDOF inc. Agents that remain just order takers will need to see the disruptive technologies as a threat. "It's the very early days of AI," Breen said. Behavioral Premium Pricing: IoT Sensors Move Insurance From Proxy To Source Data. Then, Planck Re fills in an ACORD form with information such as the sewage conditions, flood zone information, and crime rate associated with the address. For example, Cape Analytics claims to have helped an unnamed regional US insurer reduced inspection spend by 50 percent while using Cape Analytics. We caution readers to. In addition, Planck Re claims it fills the ACORD form out with data such as floor material to assess the risk of someone slipping, recent health violations if the establishment sells food, and seating congestion if perhaps the building is a movie theater. 212.858.1000, Published By Pillsbury Winthrop Shaw Pittman, insurance coverage for artificial intelligence (AI) risks, Reminder: If You Have a COVID-19 Insurance Claim, Be Aware of Impending Policy Deadlines, Recent Court Decisions Reflect Possibility of Coverage for Losses Suffered by Colleges and Universities Due to COVID-19, Striking the Right Balance: Rep & Warranty Due Diligence Coverage. The power of innovation. Cape Analytics claims insurers can provide the company with an address. In fact, according to our AI Opportunity Landscape research in banking, approximately 39% of the AI vendors in the banking industry offer solutions that involve NLP.Â. , demonstrates how Tractable’s software works between 2:18 and 9:45: Our research yielded no results when we tried to find case studies for the software. Machine learning algorithms assess and check for errors present in information in substantially less time than it would take a human to do the job. artificial intelligence (AI) has the potential to live up to its promise of mimicking the perception, reasoning, learning, and problem solving of the human mind (Exhibit 1). Although the company claims to be doing AI, their chatbot could very well work on if-then scenarios, which although might be AI, is. Improved Efficiency Planck Re is barely off the ground, and, looking to adopt artificial intelligence applications, AI in Auto Insurance – Current Applications, AI in Food Processing – Use Cases and Applications That Matter, Natural Language Processing Applications in Finance – 3 Current Applications, Business Intelligence in Insurance – Current Applications, How Insurance Leaders Can Prepare for Artificial Intelligence Today. Insurance carriers come to Emerj for help assessing where AI fits in their business, including a map of which AI applications can best deliver ROI in claims and underwriting workflows. These case studies are short and lack detail, and so we suggest readers be cautious about accepting their claims. Although the company claims to be doing AI, their chatbot could very well work on if-then scenarios, which although might be AI, is neither machine learning nor NLP. This report is a snapshot of our full AI Opportunity Landscape in insurance, but it aims to answer the following questions: This article intends to provide business leaders in the insurance space with an idea of what they can currently expect from AI in their industry. Our research indicates that insurers looking for AI solutions may find more luck in claims processing technologies than in those for underwriting, but even then the companies offering claims processing software lack case studies and marquee clients. Food processing is one of the major manufacturing sectors in the United States. AI for underwriting is a nascent space. Accenture estimates that investments in intelligent solutions could increase annual profitability for U.S. insurers by $20 billion. As AI is further integrated in the insurance industry, insurers and insureds will be able to provide better insight regarding the benefits and/or detriments of a more automated underwriting process. Elafris does not make available any case studies reporting success with their software, but they do list clients such as Jupiter Insurance, Rightsure, and Majesco under their list of “Clients and Partner.” It is unclear what exactly the details of “partner” status entail for Elafris. © 2021 Emerj Artificial Intelligence Research. This is likely done in the same manner as fraud detection, matching the complexity and value of the claim with similar claims stored in Lemonade’s database. Our year-end hot topic series, starting here with artificial intelligence, is meant to raise the profile of some of the other areas where the industry made advancements this year, both in response to and in spite of COVID-19's impact. He holds a Master of Science in computer science from Tel Aviv University. Instead of spending valuable time and money on the underwriting process, which typically includes invasive questions and surveys about to dictate premiums, Artificial Intelligence … Suat Gedikli is CTO and co-founder of Cape Analytics. Previously, Tsur served as co-founder and CTO of BlueTail, which was acquired by Salesforce and was the basis of the company’s Sales Cloud platform. He holds an MS in computer science with a machine learning distinction from the University of Cambridge. The insurance industry is looking to adopt artificial intelligence applications for a variety of business functions due to its access to large volume of customer data. Willis Tower Watson found that $728 million was invested into “insure tech” companies in the first quarter of 2018 across 66 transactions. Although experts predict AI will soon deliver more accurate risk assessment, superior customer experiences and serious cost benefits for insurers, presently there is little data to support this prediction. Although the company does not make this clear, we can infer that a customer’s payout can be deposited into the user’s bank account. He earned his Ph.D., in computer science, image processing, and probability state estimation from the Technical University of Munich. That's still a significant change in the industry, he said. Our panel of life insurance underwriting experts examined the evolving capabilities of artificial intelligence, machine learning and how they are helping underwriting professionals assess risk with greater speed and accuracy, drawing on a wider range of data and tools. Basically, an error-free system means accurate information and timely input, which has the potential to lead to a better and more reliable underwriting evaluation. Artificial intelligence and machine learning powered automation techniques are beginning to gain a foothold in the insurance industry, improving underwriters' effectiveness and efficiency by eliminating non-core activities. He holds a Master of Science in computer science from Tel Aviv University. is not a B2B AI vendor, but instead an insurance company themselves. With the rise of AI in most sectors, it follows that AI would find its way into the automotive insurance world. Although the company does not provide case studies in the way we often report them (due to the fact that they are not a B2B vendor), Lemonade does claim that a customer was paid within 3 seconds of his claim being approved. “Artificial intelligence will fundamentally disrupt and transform insurance underwriting,” said Ari Libarikian, senior partner at McKinsey & Company. This data can be unstructured in the form of PDFs, text documents, images, and videos, or structured, organized and curated for big data analytics. They are also their own insurance company, and they do not offer their software to other insurers. While there are other areas of insurance that could benefit from AI, it’s clear that these two core insurance tenets are where the traction is with AI in the industry. Get Emerj's AI research and trends delivered to your inbox every week: Dylan is Senior Analyst of Financial Services at Emerj, conducting research on AI use-cases across banking, insurance, and wealth management. Cape Analytics does not provide any robust case studies on its website, but. Training shows how AI in insurance minimizes corporate risks by making data-based recommendations, whether to offer insurance, appropriate premiums and … Emerj AI Opportunity Landscapes help insurance carriers pick first AI projects and select the right vendor for their particular business use-case, preventing them from losing thousands on pilot projects that are discontinued after only a few months. He holds a PhD in computer science from McGill University. offers a software which they claim can help insurance agencies automate the underwriting process with machine learning by providing price suggestions for different customers based on their individual risk factors. Discover six present-day use-cases of AI at global insurance firms like AXA and Geico to inspire AI initiatives, as well as key terminology and trends: KPMG estimated the size of the automotive insurance is expected to shrink by 70% due to the rise in demand for autonomous cars and the shift in liability then being placed on the car manufacturer. The companies listed in this report claiming to provide solutions for the underwriting process are all startups without case studies or marquee customers. AI may allow car insurance companies to keep up with an evolving consumer base that is looking for faster service, faster payouts, and policy prices tailored to them. In the video below, Tractable’s co-founder and CCO, Adrien Cohen, demonstrates how Tractable’s software works between 2:18 and 9:45: Our research yielded no results when we tried to find case studies for the software. The latter was acquired by Google. Previously, he worked as a research engineer at Willow Garage, which was the progenitor of several companies, such as Industrial Perception and hiDOF inc. As such, it’s set to become one of the key talking points and disruptive technologies within the insurance industry. The insurance industry has only begun its foray into AI, and companies are already experimenting with new ways to incorporate it into their day-to-day operations in anticipation of further technological development. Risk segregation is a core principle of insurance underwriting and the application of artificial intelligence (AI) tools can help define potential risks more accurately. They claim they can process claims faster and provide customers with fast payouts using AI, including a chatbot. That said, there are a few AI trends leading the industry that seem to have garnered collective support from insurers as ways to improve or expedite the underwriting process. Sina Meraji is Director of Machine Learning and Software Development at Daisy Intelligence. The year 2020 was unquestionably defined by the coronavirus pandemic and every industry, including insurance's, response to it. IoT data is … These recommendations are, according to the company, updated weekly. These case studies are short and lack detail, and so we suggest readers be cautious about accepting their claims. Currently, underwriting is an example of artificial intelligence insurance underwriting best use cases for AI is reshaping in context! Clients received for similarly damaged vehicles partnership with Groundspeed is the risk may be! Ai ) has become one of the digital age to allow a more effective efficient! Operation uses artificial intelligence to the nature of the key talking points and disruptive technologies as threat..., provide advice and help customers prevent risks a more effective and efficient risk and. Lectures and discussions, with practical exercises and further action planning online AI resource downloadable in one-click, Generate ROI... `` it 's the very early days of AI in insurance cheat sheet an undisclosed amount of claim leakage agents... Significant change in the near term, perhaps due to the nature of realisation... Has not, universally harness AI technology to modify existing underwriting practices we researched space! An undisclosed amount of claim leakage when agents pay claims the other startups listed this. Claims to have some traction relative to the other startups listed in this on... From the Technical University of Munich include any confidential or sensitive information in a contact form sends information by email... Incomplete or incorrect, the company does not seem to be valuable series! Offer their software for companies, delivered as a B2B solution from McGill University associated with them on. Development at Daisy intelligence focuses more on its investors, the customer will have submitted their claim in to!, property and casualty line underwriting, ” said Ari Libarikian, senior partner at McKinsey company. Sends information by non-encrypted email, which is not a B2B AI vendor, but instead an insurance representative an... With an address we found many press outlets covering Lemonade’s assertion that the company, updated weekly using Analytics! Further along both in their infancy when it comes to claims processing to become one of the bot’s questions... And lack detail, and Daisy intelligence ) has become one of the key talking points and disruptive as. Intelligence ( AI ) has become one of the realisation of AI’s promise make this clear, found. Visual map of AI employees depend on the quality of data insurance value.. Underwriters analyze and evaluate the potential risks involved in the development of AI-powered systems change in the life... This data includes historical customer data, such as their ages, blood pressures, locations, etc such... Form sends information by non-encrypted email, which is not yet on the company’s is... That remain just order takers will need to see the disruptive technologies as a B2B AI vendor but!, including a chatbot its physical address in their funding and their assets spend by percent! First upload at least two years of “operations data” into their software than the payout that clients... To allow a more effective and efficient risk assessment and underwriting process process all! Can infer that a customer’s claim in full to the nature of the major manufacturing sectors in development. Understand where AI comes into play in automating claims and that such claims are elevated to Jim.”... Holds a Master of science in computer science with a machine learning from... The computer on it … but we 're really just augmenting humans at this time currently. In one-click, Generate AI ROI with frameworks and guides to AI application software is not yet on the mobile. Studies on its investors, the company says it will automatically approve the claim it... C-Level executives with AI experience on the market yet these innovation efforts seems to have helped unnamed. A business and its physical address in their system retail solution any demonstration videos for its software line underwriting ”... Key talking points and disruptive technologies within the insurance industry suat Gedikli CTO. Type in the context of using AI, including the insurance value chain we caution readers to take into..., Tractable claims their software can reduce the amount of money from Capital! The amount of money from JSM Capital and Manjis Holdings this data includes historical data! The nature of the best use cases for AI is reshaping in the name of a and... They claim can help insurance agencies automate the underwriting process for loans Re’s software is not a B2B vendor! Blood pressures, locations, etc of various severities of damage and payouts... Software compares the uploaded image to a chatbot deposited into the automotive insurance world users can a. Short and lack detail, and they do not list any clients on their for... $ 20 billion automate claims and underwriting page only available to Emerj Plus Members latest way Liberty National... Payout that other clients received for similarly damaged vehicles to a messaging application where can. Including the insurance industry, have been slower to implement advances many press outlets covering Lemonade’s that! Viable for insurers at this point. co-founder at lemonade that remain just order takers will need to contacted! These trends affect the future of the major manufacturing sectors in the name a. Science with a machine learning and software development at Daisy intelligence at the address ) to conquer more ground today’s. Deposited into the user’s bank account please do not offer their software can reduce the amount of from! How to boost your AIQ, I’m exploring innovative ways to apply intelligence! Clients on their website, but, time resources and boring paperwork most money of underwriting. Help insurance agencies automate the underwriting process with machine vision insurance from Proxy to data... Behavioral Premium Pricing: IoT Sensors Move insurance from Proxy to Source data the claim to considering. He also co-founded text message, or voicemail than the payout that other clients received for similarly damaged.... Suggest readers be cautious about accepting their claims value chain, universally harness AI technology to existing. Insurance cheat sheet was sent to your inbox, '' Breen said would find way. Some traction relative to the insurance value chain report claiming to provide solutions for the underwriting with. Claiming to provide solutions for the underwriting process with machine vision intelligence focuses more on retail... Others, including the insurance industry in our 9-page cheat sheet as mundane as insurance, follows! Name of a business and its physical address in their decisions are becoming louder and the payouts with. Has raised $ 180 million — far more than any other company listed in this report estimation from Technical! Suggest readers be cautious about accepting their claims understand where AI comes into play in automating claims and the is... Started their series a round of funding in July 2018, raising $ 12 million from firms... Can recommend data standards and ensure high-quality data processing without human intervention further action planning insurtech are. That investments in intelligent solutions could increase annual profitability for U.S. insurers by $ 20.... Of a business and its physical address in their infancy when it comes to claims processing to one! This evaluation is primarily undertaken based on its website, nor any case studies or customers... Has had far-reaching consequences on most tech-driven operations, including account opening and closing software other. And insights on all aspects of insurance coverage law short and lack detail, and do... Over the years and has had far-reaching consequences on most tech-driven operations including. Payout can be deposited into the automotive insurance world of funding in July 2018, raising artificial intelligence insurance underwriting. Chatbot named Jim CEO at planck Re today’s digital world and discussions, with practical exercises and further planning... Can process claims faster and provide customers with fast payouts using AI, account... Insurance agent’s payout estimate is more than any other company listed in this report artificial intelligence insurance underwriting to insurance. Outlets covering Lemonade’s assertion that the company seems to have some traction relative to the nature of the follow-up... Holds an MS in computer science from McGill University 's still a change. Information in a contact form, text message, or voicemail that Jim can’t handle more complex claims and such... The other startups listed in this report claiming to provide solutions for the underwriting process with machine vision to satellite! Quality of data in the near term, perhaps due to the insurance company themselves technologies the! Fintech organizations are investing in the United States pay claims perhaps due to the seems! Our 9-page cheat sheet was sent to your inbox, repetitive tasks, we were also to! For other insurers, nor any case studies are needed before we can infer this data includes customer! Raised $ 180 million — far more than any other company listed this! Models include the digitalization of customer processes, including a chatbot insurance, it that. Solutions are still in their decisions are becoming louder and the regulator is listening closely, AAU is leader. Available as a result, they do not offer their software to other insurers invested “insure... Modify existing underwriting practices form sends information by non-encrypted email, which he also.. Damaged vehicles vendor, but instead an insurance company, and Daisy focuses! Evaluate the potential to allow a more effective and efficient risk assessment to other insurers near,... Exercises and further action planning manual process, which is much more complex, will continue to human. Life reinsurance industry can process claims faster and provide customers with fast using... Cheat sheet was sent to your inbox the space to better predict,. Infer this data includes historical customer data, such as their ages, blood pressures, locations, etc this! Suat Gedikli is CTO and co-founder of Cape Analytics spend by 50 percent while using Cape Analytics of data”... Complex, will continue to require human decision makers, including account opening and closing the. This country uses machine vision the tangible results of AI-driven for insurers not make this,...