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Featured General Insurance Press Release

LenderDock Inc., the leading provider of online Property and Casualty Insurance policy verification and automated lienholder process management services, is pleased to announce an enhanced partnership with West Point Insurance Services.

“The team at WestPoint are fiercely loyal to their growing customer base and do everything they can to strategically improve service and support.  Operationally, their investment in key technologies like lienholder automation reflects a forward-thinking approach to mitigating unnecessary or inefficient workflows within the business,” said Frank Eubank, LenderDock CEO.

West Point will now take full advantage of LenderDock’s Base platform, which includes the VERiFi™, LIENSure ™, and LENDERDocs™ solutions. West Point has already previously implemented the NOTiFi™ service.

The first tool, VERiFi™, is a real-time insurance policy verification system. VERiFi™ eliminates the need for phone calls for policy verification, resulting in a quicker and more effective process.

With the second tool, LIENSure™, lenders can send adjustments to the carrier directly, automating the process of changing policy information. This enables carriers or providers to process the updates quickly and effectively in accordance with their own protocols.

Finally, LENDERDocs™ offers financial third parties electronic and real-time access to critical policy-related papers including EOIs, Certificates, and others. This facilitates the acquisition and dissemination of these documents, making it simpler for business partners to handle their policy data.

“Partnering with LenderDock allows us to solve the specific problem of freeing up time for UW/Billing areas, empowering our employees to focus on providing excellent service to insureds. West Point chose LenderDock for their forward-thinking solution, enabling mutual growth without the burden of administrative tasks,” said Bobby Norvell, VP Business Development at West Point Insurance Services.

About West Point Insurance Services

West Point Insurance Services pairs specialized technology with a combined 135+ years of Property & Casualty industry knowledge to help you effectively scale, rapidly launch new programs, and consistently ensure quality and compliance. West Point has garnered years of experience solving difficult system challenges with customized software and Business Process Outsourcing solutions. They offer a mature business process, complete transparency, and 100% onshore resources to help their clients make the most of our Property & Casualty insurance software.

About LenderDock Inc.

Headquartered in Salt Lake City, Utah, LenderDock Inc. is the leading provider of online Property and Casualty Insurance policy verification and automated lien holder process management services. The policy verification-as-a-service (VaaS) platform offers banks, lenders, and financial third parties the ability to digitally verify and correct home and auto policy-related data in real-time.

Contact West Point Insurance Services

Bobby Norvell

VP Business Development

727-489-9190

May 3, 2024
Automation Featured General Insurance

As artificial intelligence continues to advance, the insurance industry is harnessing its power to enhance various aspects of its operations. 

From machine learning and natural language processing to robotic process automation and audio/video analysis, insurers are leveraging AI technologies to deliver improved products and services. Customers are also reaping the benefits through practices like comparative shopping, expedited claims processing, 24/7 service availability and enhanced decision-making support.

In this guide, we will explore how AI solutions are transforming the insurance sector across various sub-industries and operations.

What is artificial intelligence?

The rapid adoption of AI technologies is evidenced by significant milestones like ChatGPT amassing 100 million users in its first two months and the market potential of generative AI (GenAI) projected to reach billions of dollars in the next year.

But then what is Artificial Intelligence? 

Artificial intelligence is technology that enables computers and machines to simulate human intelligence like reasoning and problem-solving. From the development of self-driving cars and voice assistants to curated algorithmic social media feeds, AI is increasingly becoming part of everyday life.

With digitalization accelerating across various domains, the volume of data available for analysis is expanding rapidly. 

Insurance, being a data-driven industry, has long utilized AI and data analytics to enhance products, interactions, risk management, claims processing and overall operational efficiency. 

How? 

Let’s explore this in the next section.

Benefits of artificial intelligence

 1. Redefining underwriting practices

Gone are the days of manual risk assessment processes. Advanced analytics, now powered by Artificial Intelligence, enables insurers to analyze vast amounts of data with unprecedented accuracy. 

By gathering real-time data with the help of telematics complemented with advanced analytics, insurers can determine the likelihood of claims more precisely than ever before. 

Additionally, machine learning algorithms automate the underwriting process, swiftly identifying high-risk factors and enabling insurers to offer personalized policies tailored to individual needs.

 2. Elevating customer service standards

Insurance customers expect round-the-clock support and instant responses to their inquiries. AI-powered chatbots with Natural Language Processing (NLP) capabilities can handle routine customer queries like questions about policy coverage, claims status and premium payments. 

This frees up human agents to tackle more complex issues and address customer grievances promptly.

 3. Streamlining claims processing

AI algorithms are revolutionizing the claims processing workflow by automating manual tasks and expediting the settlement process. By extracting relevant information from claim forms, documents and images, AI technologies like OCR backed with Deep Learning reduce the need for human intervention and accelerate claims resolution. 

Moreover, predictive analytics play a crucial role in fraud detection by analyzing patterns and anomalies in claim data, enabling insurers to identify suspicious behavior and take proactive measures to mitigate risk.

 4. Enhancing policy administration efficiency

AI-powered automation tools are streamlining policy issuance, renewal and modification processes, reducing the administrative burden on insurers. By generating documents, recording transactions, and initiating premium payments automatically, these innovative solutions enhance operational efficiency and improve overall workflow management. 

Artificial intelligence like Natural Language Processing (NLP) used in hand with smart contracts, can help automate certain tasks like issuing a policy once a set condition has been met like payment of premium.

5. Ensuring regulatory compliance

Artificial Intelligence plays a crucial role in ensuring that insurance products and processes adhere to legal and regulatory standards. 

By analyzing regulatory requirements and compliance documents, AI technologies enable insurers to identify potential risks and discrepancies proactively, minimizing compliance-related challenges and ensuring adherence to industry regulations. 

Similarly, AI can be applied in tandem with blockchain to automate report generation once certain conditions have been met like the end of a quarter or annual duration.

Final thoughts

Artificial intelligence is reshaping the insurance industry, driving innovation and efficiency across various operations. 

By harnessing machine learning, natural language processing, and robotic process automation, insurers and risk intermediaries are enhancing accuracy, speed, and customer experience.

Looking ahead, the convergence of AI with technologies like blockchain promises even greater opportunities for innovation. Embracing AI-driven solutions will enable insurers to stay ahead of the curve and meet the evolving needs of customers in the digital age.

May 1, 2024
Featured General Insurance

With cloud-seeding now a reality, insurance should harness technology to address the challenges posed by climate change.

Just a few weeks ago, Dubai experienced severe flooding due to heavy rains—the heaviest since the 1940s.

This raises two questions: First, what factors should insurers consider when determining coverage for damages from climate change? And second, how can insurers effectively manage risks associated with cloud seeding-related claims?

To address these questions, Insurtech solutions offer a promising avenue to not only streamline insurance operations but also enhance risk management practices.

Climate risk and insurance

Climate change isn’t just a distant threat anymore—it’s happening right now, all around us. 

Today, we’re experiencing more frequent and severe weather events than ever before, and UAE serves as a testament to this reality. The recent floods turned main country roads, particularly in Dubai, into waterways, leaving motorists stranded and causing widespread damage to commercial and residential properties.

Traditional insurance methods are feeling the strain. While policies like motor and homeowners’ insurance typically cover events like earthquakes and floods, they become strained when many policyholders are faced with the peril at the same time. Asides that, insurers may refuse coverage for events deemed man-made like cloud seeding. 

Whether the Dubai floods were man-made or not, that’s a discussion for another day.

Insurtech’s response to climate change

Predicting and accurately assessing the risks posed by climate change has proven difficult with traditional underwriting methods. Add to that, engaging other disciplines like meteorology and seismology for risk assessment and claim investigation adds to the complexity and cost.

Fortunately, Insurtech—the integration of technological innovations into the insurance industry—is changing the game. Insuring against climate-related risks is now easier and more cost-effective than ever before, thanks to Insurtech’s ability to bring savings and efficiency to the insurance model.

Insurtech trends and success stories

Advanced analytics and predictive modeling

Insurtech companies employ sophisticated data analytics algorithms for more accurate assessment of climate-related risks. Through analysis of historical weather data, satellite imagery, and other relevant information, these solutions predict the likelihood and severity of extreme weather events.

 Twinn, a software platform developed by Royal HaskoningDHV can provide a climate risk assessment that helps you visualize physical risks and identify hazards as they develop. 

Drones

Drones equipped with high-resolution cameras and sensors revolutionize risk assessment and claims processing in the insurance industry. 

Insurtech firms deploy drones to conduct aerial surveys of properties, infrastructure and disaster-stricken areas, enabling faster and more accurate assessment of climate-related damages. Customers will then benefit from faster claims processing and eventual settlements.

Blockchain

Blockchain technology provides a transparent and tamper-proof platform for managing insurance contracts, especially those tied to climate-related risks. 

Insurtech startups like Arbol explore the use of blockchain-based smart contracts to automate the execution of parametric insurance policies triggered by specific weather events or environmental indicators. 

This ensures timely payouts to policyholders in climate-related disasters, reducing administrative overhead and enhancing trust and transparency in insurance transactions.

Microinsurance

Microinsurance, providing affordable coverage to low-income and underserved populations, is increasingly employed to tackle climate-related risks in developing countries. 

Lemonade has collaborated with local organizations and mobile technology providers in Kenya to deliver microinsurance products safeguarding vulnerable communities against weather-related disasters like droughts and famine.

Conclusion

As climate risks escalate, Insurtech emerges as a beacon of hope. By leveraging technology like smart contracts climate coverage can be automated in a way that when conditions have been met i.e. heavy rains being recorded then insurance settlements will be paid out automatically to all policyholders. 

This, alongside other discussed examples, demonstrates how Insurtech innovations can practically enhance and improve insurance operations. Insurers can navigate uncertainties, address coverage dilemmas, and effectively manage risks—ultimately safeguarding communities in an ever-changing climate.

 

April 29, 2024
Cloud Computing Featured General Insurance

Cloud computing is a game-changer in redefining business operations and consumer interactions as the insurance industry undergoes considerable transition due to digitalization and client demands.

This article examines cloud computing’s potential in the insurance industry, going over its innovations, drawbacks, and possible advantages for both policyholders and insurers.

Innovations fueled by cloud technology

Numerous advantages of cloud computing are drastically changing the insurance industry. The following are a few of the biggest innovations:

Improved agility & scalability

Because of the adaptability of cloud infrastructure, insurers can modify IT resources in response to urgent demands, which saves money and improves their capacity to manage spikes in activity.

Simplified processes

Insurance procedures are streamlined by cloud-based solutions, which lower operating costs and frees up staff for higher-value jobs including underwriting, processing claims, managing policies, and providing customer support.

Better analytics & data management

Large volumes of data may be securely and centrally stored via cloud storage, which gives insurers the ability to create customized products, spot fraud trends, assess risk profiles, and launch focused marketing efforts.

Customer experience without barriers

Because cloud technology makes it easier to access policies, file claims, and handle payments, it may be used to create easy-to-use online portals and mobile apps that increase customer satisfaction and loyalty.

Working together & inventing

Cloud platforms provide open, creative environments for the rapid testing and implementation of new ideas, enhancing collaboration both within insurance businesses and with external partners.

Uncovering possibilities for a more positive future

The short-term difficulties are outweighed by the long-term advantages. By adopting cloud computing, insurance companies can take advantage of numerous advantages:

Tailored insurance items

Using consumer data and analytics, insurers can develop customized insurance products that support usage-based insurance models, in which premiums are determined by real risk exposure or behavior.

Instantaneous risk evaluation

Through the analysis of immediate information from connected gadgets and sensors, cloud-based solutions allow insurers to continuously assess risk, improving their capacity to provide accurate rates and even offer discounts for responsible conduct.

Quicker processing of claims

Cloud-based claims management solutions facilitate shorter resolution times and higher levels of customer satisfaction by automating repetitive operations and encouraging cooperation between adjusters and policyholders.

Improved fraud identification

Algorithms powered by artificial intelligence and machine learning can swiftly spot patterns of fraudulent claims, lowering insurer losses and helping policyholders with cheaper premiums.

Integration of emerging technologies

Cloud computing enhances risk evaluation, claims processing, and client service by integrating blockchain and IoT technology into insurance products.

The impact

Cloud computing is being embraced by the insurance sector to foster creativity, effectiveness, and customer-centricity. Driven by agility, data-driven knowledge, and value generation, this offers policyholders a secure, adaptable experience as well as a competitive advantage.

 

April 25, 2024
Business Featured General Insurance

Visualize all the grains of sand on beaches across Earth. It’s a number so big – roughly 2.5 quintillion to be exact – that we can’t imagine it in any meaningful way. But it’s also the amount of data that we generate every single day. That data, hidden in documents or flowing through the internet, is akin to the oil that revolutionized the 20th century; it drives our economies and powers our technological advancements.

And just as oil needed engines to transform raw power into usable energy, data requires analytics to unlock its potential. These analytics, the combustion engine of our era, turn vast, inert numbers into insights that propel us forward, shaping everything from daily decisions to global policies.

The insurance industry is no exception here. Big data and analytics have been fundamentally transforming how policies are priced, risks are assessed, and claims are managed. By harnessing vast amounts of data—from driving records to real-time health monitoring—insurers can tailor policies more precisely to individual risk profiles, enhancing both customer satisfaction and operational efficiency. With this in mind, let’s look at precisely how data and analytics are driving improvements in underwriting.

The challenge for underwriters

Underwriters face the daunting task of accurately assessing and pricing risks in a highly complex and ever-changing world. Traditional methods rely heavily on historical data, and while historical data has worked well enough for a long time, it’s not ideal. It’s far less useful at accurately predicting future risks due to emerging technologies, new medical advancements, and shifting social norms.

For example, how can historical data on human drivers anticipate the challenges and uncertainties presented by the rise of autonomous vehicles? Similarly, advances in genetics and personalized medicine are rapidly changing health profiles, which impacts life and health insurance industries in ways that past data cannot adequately forecast.

Furthermore, the sheer volume and complexity of data now available can overwhelm traditional analytical processes, making it challenging to identify relevant insights quickly and efficiently. These limitations can lead to imprecise risk assessments, mismatched premiums, and ultimately, financial losses.

How underwriters are leveraging big data & analytics today

So, that’s the challenge – historical data alone limits accuracy and efficiency in underwriting, but what’s the solution? You guessed it – big data and advanced analytics. Insurers are leveraging big data to assess a far bigger range of data sources and leveraging AI-driven analytics solutions to turn that data into meaningful insights.

More accurate risk assessment

Insurers can now access vastly more data sources than in the past, including public records (like driving violations and property details), data from connected devices (such as telematics for car insurance and wearables for health insurance), and social media insights. This rich, diverse dataset allows for a more detailed understanding of an applicant’s risk and offers many benefits, including:

● Fairer pricing: More accurate risk profiling leads to lower premiums for lower-risk individuals, making insurance more affordable for those less likely to file claims.
● Better risk selection: Enhanced data analysis helps identify high-risk applicants, allowing insurers to better manage their risk pool.
● Reduced risk of fraud: Cross-referencing data points helps uncover inconsistencies in applications, thereby mitigating potential fraud.
● Predictive modeling: Advanced analytics can go beyond static profiles and predict future behavior. For example, telematics data might indicate a driver with a higher risk of accidents, allowing insurers to offer targeted safety resources or adjust premiums accordingly. This can help prevent accidents and ultimately reduce costs for both insurers and policyholders. And these models become even more accurate over time as more data is fed to them.

Automated underwriting decisions

Big data and analytics go hand in hand with automation. Here, automation and AI are primarily used in decision-making processes for straightforward, low-risk cases. This automation not only speeds up the underwriting process but also allows human underwriters to dedicate more time to complex or unusual cases where personalized attention is crucial. The result is a more efficient overall process with improved turnaround times for customers.

And statistics back this up. A study published in McKinsey found that leading insurers who built advanced data and analytics underwriting solutions saw business premiums increase 10 to 15 percent. They also saw loss ratios improve by three to five points, and retention in profitable segments surge up to 10 percent.

Staggeringly, it’s estimated that with advanced automation (ones that leverage machine learning models), an eye-watering 95% of policies go straight through processing without underwriter involvement. No more waiting weeks for a decision.

Dynamic pricing

Dynamic pricing models allow underwriters to adapt premiums based on a customer’s current behaviors or circumstances. For example, usage-based car insurance policies leverage telematics data to offer a “pay-as-you-drive” model. Premiums are adjusted based on actual driving behaviors, rewarding safe driving and creating financial incentives for risk reduction. This not only makes insurance pricing more personalized but also encourages better behavior among policyholders.

Benefits for underwriters, but benefits for customers too

Here’s the bottom line. Big data and analytics undoubtedly help insurers avoid financial loss. More efficient profiling through data analysis means more time and less human error for underwriters. They can focus on complex cases and customer service, rather than getting bogged down in manual data processing.

However, that’s not to say the benefits lie solely with underwriters. Customers also reap significant advantages. More accurate profiling means fairer pricing for policyholders. Insurers can identify lower-risk individuals quickly and accurately and offer competitive premiums, reflecting their actual risk profile.

And big data also opens the doors for highly personalized coverage. Data allows insurers to offer tailored insurance products that better meet individual needs. For example, a homeowner with a robust security system might qualify for a discount on their property insurance.

Final thoughts

Big data and analytics are no longer a futuristic vision, but the essential tools driving the insurance industry forward. By harnessing the power of vast datasets and sophisticated analytics, insurers can create a win-win situation for both themselves and their customers.

April 23, 2024
Featured General Insurance

In 2023, heatwaves that broke records hit the US and the EU, wildfires tore across Mediterranean countries, and East Africa was hit hard by flooding. $250 billion is the overall cost of the losses and damages.

The Loss and Damage Fund (L&D), which was established in 2022 during the United Nations Climate Change Conference (COP27) was designed to help developing nations recover from climate-related calamities. But barely $700 million had been promised by COP28 in 2023. By 2030, the L&D Fund is expected to have an annual shortfall of up to $400 billion due to the growing speed of climate change, with promises covering less than 0.2% of losses.

The need to create financial frameworks that can invest in catastrophe and climate resilience while reducing recovery costs and dependency on underfunded L&D structures is thus becoming even more imperative.

There remains a gap in the funding required to engage in mitigation and adaptation strategies compared to the insurance systems in place today. Increased coverage across all industries is widely required, as seen by the surge in premiums caused by rising climate-related risk.

Home insurance

The average rate for home insurance increased by over 24% over the previous year while big insurers like State Farm and Allstate left California and Florida.

Utilities wildfire insurance

With the ability to pay only $11 billion of the $30 billion in damages it was liable for during the height of the 2019 wildfires, Pacific Gas & Electric Corporation (PG&E) filed for bankruptcy protection. The California Commission granted PG&E permission to establish two Risk Transfer Balancing Accounts, one for general liability and the other for wildfire liability, in response. While Southern California Edison chose to self-insure rather than renew its customary $1 billion policy, PG&E insured around 80% of its assets, valued at up to $750 million, to prevent a repeat of the financial turmoil of 2019.

Marine insurance

Drastic weather has drastically decreased the load capacity of Neopanamax, or larger ships, even with the $5 billion upgrade of the Panama Canal in 2016. The entire insured value of cargo traveling through the canal has decreased because of the capacity restriction, which has prompted a spike in container rates from $300 to $500 per container. Longer wait times and delays in the delivery of goods have resulted from this, which has influenced the entire supply chain.
The globe will see huge changes in risk and what is insured while new sustainable technologies are implemented, countries urbanize quickly, and the effects of climate change get worse. Insurance businesses have a special chance to organize fresh and creative funding sources that encourage resilience investments, resulting in increased stability over the long run and a variety of income sources.

In what ways may insurers improve their own long-term resilience by utilizing digital strategies?

Addressing challenges on a national level

Because of the hazards associated with climate change, major house insurers have pulled out of Florida and California, each state experiencing unique difficulties. Florida faces flooding risks, whereas wildfires are the main cause of risk in California. Furthermore, even within the same state, there can be large local variations in the hazards and long-term benefits of mitigation initiatives.

Insurers may find the best localized resilience alternatives on a national level with the use of new AI-driven digital tools that offer a shared toolbox of options made possible by unique customization capabilities at scale. With the use of these technological tools, insurers can recognize hazards and determine amounts of coverage that are both profitable and appropriate for hyper-local environments.

Additionally, as laws, financial models, and technology advance, digital Systems of Record become increasingly important to the upkeep of these national-level programs. The cost of resilience-enhancing and sustainable technology is falling dramatically, so investments might go from being unprofitable to being extremely profitable very quickly.

Enhancing risk evaluation

Better methods for gathering data can increase the accuracy of risk assessment because climate risk is a localized phenomenon.

The marine industry, for instance, frequently undervalues risks and uncertainties in particular regions due to present climate approaches. Ship operations in the Panama Canal are exposed to considerable climate-related dangers due to the increased frequency and unpredictable warmer temperatures that accompany El Niño periods. In contrast, ports in Asia might encounter fewer typhoon-related events, which would allow insurance companies to instantly modify rates to reflect increased risks.

Insurers can take into consideration regional differences in climate-related risks and modify premiums as these risks evolve by regularly collecting data and reassessing risk models during seasonal cycles.

Addressing and responding to climate challenges

Insurance firms can significantly impact how resilient assets are in certain areas, even if they decide to leave markets and geographic locations. Insurers can increase long-term profits by protecting income from these assets and drastically reducing costs associated with climate disasters by investing in adaptation measures in markets they would otherwise leave.

Insurers may be able to make significant investments outside of their typical coverage areas with the help of cutting-edge digital tools. For example, hundreds of miles away, people may suffer serious respiratory damage from wildfires, which can result in significant expenses for health insurance companies. But health insurers might benefit greatly from investing in wildfire mitigation, which is made possible by AI-driven geospatial tools that enable thorough area analysis.

These kinds of creative expenditures necessitate close coordination between companies that have historically operated in isolation. These barriers can be removed with the help of digital multi-player collaboration tools, which enable specialists from many fields to communicate with regulatory and financial stakeholders about a common plan and swiftly come to an agreement.

Both the public and commercial sectors must work together to reshape financial systems to increase investment and promote cooperation that will help us move closer to a future free from climate change. By enabling policyholders to invest in resilience and adjust to risk, insurers have a rare chance to develop new financing models that will improve long-term revenue streams and the viability of entire communities.

April 18, 2024
Automation Cloud Computing Featured General Insurance

As society embraces the digital age, the surge in data usage presents challenges for companies to maintain their vital information, programs, and systems on in-house servers. However, the solution to this dilemma, which has persisted since the internet’s inception, has only recently gained widespread adoption.

In recent years, cloud computing has transitioned from being a strategic technology to an essential one. The COVID-19 pandemic accelerated the adoption of a “cloud-first” approach across various sectors, including financial services and insurance. 

While insurers were initially skeptical about cloud computing, they now recognize its value and actively integrate cloud solutions into their practices.

Cloud computing in insurance

According to a recent study by Gartner, 78% of insurance companies have adopted cloud technology in some form. 

Cloud computing involves the utilization of remote servers hosted on the internet to store, manage, and process data, as well as to deliver computing services specifically tailored to meet the needs of the insurance industry. 

This approach replaces traditional on-premises infrastructure with scalable, on-demand resources accessed through the internet. 

Benefits

Cost efficiency

Cloud computing eliminates the need for upfront investments in hardware and infrastructure, allowing businesses to pay for only the resources they use on a pay-as-you-go basis. 

Add to that, Insurance-as-a-Service has gained popularity nowadays, as traditional insurers have turned to insurtechs like LenderDock to leverage the cloud computing capabilities to adopt new insurance environments. 

This helps in reducing capital expenses and converting them into predictable and manageable operational expenses.

Scalability & flexibility

Insurance companies can easily scale with the help of cloud-based solutions. This flexibility ensures optimal resource allocation, preventing over-investment during slow periods and enabling efficient management of peak periods. 

Additionally, cloud services allow flexibility in insurance processes and accessibility of business data and applications from any location which fosters collaboration and remote work, enhancing productivity.

Disaster recovery & business continuity

Cloud providers offer robust data backup and disaster recovery solutions, ensuring secure data backup and accessibility in case of disasters or outages. This minimizes downtime and maintains continuity of operations.

 Unlike traditional recovery methods, which are often complex and time-consuming, cloud-based systems streamline recovery with automated backups and rapid data replication.

Greater innovation & insight

With data stored in the cloud, insurance companies can implement tracking mechanisms and generate customized reports for organization-wide analysis. 

Cloud infrastructure also empowers insurers to swiftly develop and launch new products and services, eliminating the need for lengthy IT setup times. 

This agility is crucial in a competitive landscape where the speed of bringing products to market is of utmost importance.

Taking the initiative 

The post-COVID era we are now in has seen insurance companies and other service providers accelerating the shift to cloud computing.

Lemonade

Originally based in Israel, the insurance unicorn opened an office in USA but has now shifted most of its core operations to the cloud, hosted by Amazon Web Services (AWS). 

Cloud computing, coupled with their AI-powered chatbot, Jim, has enhanced customer interactions.

Allstate

Allstate has leveraged Microsoft’s Azure AI platform to adopt cloud-based solutions. By employing AI-based virtual assistants and predictive analytics, the insurance company has improved claim processing, personalized service recommendations, and risk assessment practices.

To sum it up

Cloud computing doesn’t just mean moving to the cloud. 

As you have seen in earlier paragraphs, for the potential of cloud computing to be realized, complementary technologies like Artificial Intelligence, Advanced Analytics, and Machine Learning should be developed in tandem with the approach. 

April 16, 2024
Automation Featured General Insurance

Insurance is defined as the pooling of resources by many to compensate the few faced with named risks. In legal terms, it is a contract in which the insurer agrees to indemnify the insured upon the occurrence of a specified event, in return for a payment called premium. 

Like many contracts, terms and conditions are stipulated to govern it. But with the advent of technology, today, the insurance contract can be entirely digitized. This allows for entire processes like claims to be done autonomously. The technology making all this possible is blockchain.

Smart contracts in insurance

From policy issuance, claims settlement, and even premium payments, smart contracts can automate all insurance processes with the help of blockchain technology. 

This is because they are self-executing, meaning they perform a task, like releasing insurer’s funds for a claim settlement, upon satisfaction of a pre-coded condition, like approval of a claim upon evaluation.

Smart contracts are coded on a distributed ledger system like Ethereum, making it possible for anyone to verify the transaction. How? The record of all transactions is replicated in full on each participant’s computer. This makes them highly transparent, as everyone has a complete, traceable record of every transaction recorded on the blockchain.

Insurance can benefit from smart contracts through:

 1. Automated claims

Smart contracts streamline the claims process by automating it based on predefined conditions. For example, in homeowner’s insurance, if an earthquake occurs, the smart contract can trigger the claims process without manual intervention. It verifies coverage, assesses damage, and can even facilitate claims settlement.

 2. Enhanced risk assessment

Smart contracts, with the help of blockchain, predictive analysis and IoT devices, can greatly improve the process of identifying potential risks posed by prospective customers. 

Some health insurance programs today utilize smart contracts to monitor policyholders’ real-time health data from wearable devices. If certain health metrics indicate an increased risk, the smart contract can adjust the premium accordingly or trigger preventive measures such as health counseling or lifestyle recommendations.

 3. Streamlined policy administration

Smart contracts can automate various aspects of policy administration such as issuance, renewal and modification. For example, when a customer purchases an insurance policy, a smart contract can automatically generate the policy document, record the transaction on the blockchain and initiate premium payments. 

Similarly, at the time of renewal, the smart contract can assess the policyholder’s claims history and adjust the premium accordingly.

 4. Better customer experience

By leveraging smart contracts, customers’ experience can be greatly enhanced, offering transparency, efficiency, and convenience. Clients can easily access their policy details and track claims status in real-time through a user-friendly interface. 

Furthermore, automated processes enabled by smart contracts ensure faster response times and resolutions, ultimately leading to increased customer satisfaction and loyalty.

Beyond the proof of concept

The implementation of smart contracts in the insurance industry is gaining momentum. With the potential to revolutionize traditional insurance practices, smart contracts represent a significant step forward in modernizing the industry.

Chainlink Labs

ChainLink enables blockchain-based parametric insurance applications to access real-world data, automating claims processing and reducing operational expenses. In instances like severe weather events, Chainlink retrieves pertinent weather data to validate and automate compensation disbursements through an insurance provider’s smart contract.

Lemonade

Last year, 7000 Kenyan farmers received insurance payouts via the Lemonade Crypto Climate Coalition. Smart contracts on the blockchain were created upon enrollment in the parametric crop insurance program. At season end, yield data transmitted to smart contracts triggered instant payouts for crop failures due to adverse weather conditions. This has expedited claim settlements, eliminating the need for filing or human adjusters, thus reducing costs and processing times.

Insurwave

Insurwave is the world’s first blockchain solution for marine insurance, utilizing the Corda Blockchain. It connects clients, brokers, insurers and third parties via distributed ledgers, storing comprehensive data on identities, risks, and exposures. Seamlessly integrated with insurance contracts, Insurwave facilitates asset data management, links data to policy contracts, enables real-time processing of pricing and business changes, and validates up-to-date loss data notifications.

Bottom line

Smart contracts have revolutionized the insurance industry, transforming slow claims processing and lack of transparency in insurance into streamlined, automated operations. This transformation is exemplified by bold initiatives from major firms like Lemonade and IBM.

However, as with any emerging technology, it’s crucial to ensure that the benefits outweigh the drawbacks. Proper utilization of smart contracts requires smart and proper investment in understanding the underlying technology, namely Blockchain. In addition, thorough market research is essential to gauge readiness and reception.

April 10, 2024
Automation Featured General Insurance

Location intelligence and aerial imagery are relatively new ideas, but they are already proven to be very useful in helping insurers better understand what their customers need.

This technology uses geospatial information to give a more accurate picture of danger, going beyond simple zip code data. For example, real-time level data can help insurers figure out how likely it is that a property will flood or find infrastructure that has been updated or damaged. Putting together geospatial data with advanced analytics makes it easier for insurers to do their jobs by combining better underwriting and claims handling into a single framework.

Besides these improvements, new technologies offer something more to help insurance than just analyzing data. They allow consumers to get personalized safety advice, see changing claims visualizations, and keep an eye on risks all the time. It works out well for everyone: customers get better security and lower premiums, and insurers learn more about how their business works.

Property & casualty division

The P&C industry is about to go through a big change. Due to inflation, rising labor costs, staff shortages, and bad weather, premiums around the world are expected to rise to $10 trillion by 2030. Because of this upcoming financial milestone, insurers are putting money into new technologies like location intelligence to help them write more accurate plans. This method uses location data and pictures taken from above to see things that the human eye can’t. This gives us a complete and more correct picture of property risk, and it also encourages insurance companies to correctly price and quote property risks, which sets them up for success right from the start.

With location intelligence, insurers can control risk ahead of time to find properties that are likely to be damaged by natural disasters, crime hotspots, and other dangers. Think about flames as an example. For example, the defensible area around a property, the materials used on its roof, or the distance between buildings are all things that help insurers figure out how much risk a property is exposed to. When they have these exact insights, they can change policies, set prices and rates more accurately, and maybe even lower losses or stop them from happening. Ultimately, giving insurance accurate risk assessments leads to better customer service, more efficient operations, and higher profits in the future. More importantly, though, it becomes important for building a strong future.

Enhancing efficiency in underwriting & claims procedures

Underwriters can make sure they don’t miss any important areas by using specific location intelligence and checking to see if secondary structures change the risk criteria. Using geospatial data and aerial imagery together in this way speeds up the screening and claims management processes that are usually very slow. When underwriters learn about property risk, they learn about things like flood zones and how vulnerable the property is to bad weather like hurricanes, wildfires, and tropical storms. For example, when insurers use location intelligence, they don’t have to rely on old images and bad data to reevaluate the risk of flooding in coastal areas. After that, they can change the prices of their policies by combining current images, elevation data, and old storm records.

Also, this makes insurers work on loss control more effectively, making it an important part of the lifecycle of an insurance policy. When it’s time to renew, location intelligence can give insurance up-to-date information on properties, which makes it easy to spot any new risks. Innovative AI systems can find all of these new risks by pointing out things like property repairs, roof and property damage, and any additions or secondary buildings to properties.

Location intelligence is a very useful tool for adjusters who deal with claims. Location data can be used by adjusters to check details about an incident, like where a property is located, what features the land has, or how the weather behaves during a weather event. Insurance companies can easily compare pictures taken before and after a disaster to figure out how much damage was done and send help to the places that need it the most. This speeds up investigations, gets rid of pointless delays, and helps agreements be finalized faster in the end. It also adds a new level of openness and provides objective proof during the claims process, which is good for both the insurance and the insured.

Revolutionary technologies transforming the insurance industry & policy management

At the center of change in the insurance business are machine learning (ML) algorithms and generative AI. What do these tools have to do with location intelligence, though? One thing is that these algorithms can now quickly and accurately look at huge geospatial location records to predict possible risks. This feature makes it easier for location intelligence to make predictions. Location intelligence uses machine learning and generative AI to give real-time information about important property features like debris, roof state, and roof age.

Moving beyond traditional “one-size-fits-all” models, this process lets insurers make policies that change based on each person’s wants and habits. Moving from risk assessment to claim handling, for example, large language models (LLM) can speed up the claims process by automating the tedious tasks that come with it. A LLM can go through a portfolio and automatically take out data, which can then be put together into a full risk assessment. Because it handles administrative chores, speeds up document analysis, and makes communication with policyholders better, this automation lets insurers focus on the more strategic parts of their work. In addition, this automation increases the trust and accuracy of insurers throughout the whole lifecycle of a policy.

Nearly a trillion devices will be connected by 2025, according to experts. These technological advances are not only bringing the industry up to date; they are also changing what insurance means in a fundamental way. A change is happening from “repair and replace” to “predict and prevent” for more personalized risk management. These tech-based innovations can make insurance more useful, easier to get, and better for everyone.

There is no doubt that location intelligence is a powerful force that is shaking up the insurance business. When insurers use geographic data and advanced analytics, they not only improve their financial health, but they also make key processes run more smoothly and set a new standard for proactive, data-driven industry practices. As location intelligence and the technologies that go with it keep getting better, the insurance business will be more flexible, data-driven, and proactive in the future.

April 8, 2024
Featured General Insurance

In auto insurance, risk assessment has traditionally relied on demographics and statistical data. While this approach provides a snapshot of customers’ risk profiles, it’s not highly accurate as it relies on generic factors and historical data.

However, with advancements in technology, accessing real-time data and various risk-related information has become feasible.

Telematics, special sensors that collect and transmit driving behavior data in real-time, facilitate this process. Metrics such as driving speeds, braking patterns and cornering are transmitted at low latency to insurers, forming the foundation for risk assessment.

The mechanism behind

There are mainly two kinds of telematics technology used today.

Telematic-based devices uses special fitted devices to a vehicle’s OBD port while App-based telematics use special mobile apps developed by the insurer to capture data from a smartphone’s many sensors. Choosing one over the other depends on the insurer’s technological capabilities and financial resources.

Telematics technological aim to capture the driver’s habits and vehicle usage through:

Data Collection: Telematics devices gather driving metrics directly from the vehicle’s OBD-II port, including speed, acceleration, braking and GPS location.

Data Transmission: Collected data is transmitted via cellular networks to the insurer’s systems, enabling immediate access for analysis.

Data Analysis: Advanced algorithms analyze the collected data to create a detailed profile of the driver’s behaviors and associated risks like speeding or harsh braking.

Underwriting: Based on this analysis, insurers assess the level of risk posed by each driver they’ve insured for. Safer driving habits translate to lower premiums while riskier behavior may result in higher rates.

By customizing premiums based on individual driving habits, this results in more accurate risk assessment, leading to what is known as Usage-based insurance – where you only pay based on your usage – a trend that is really catching on nowadays!

Benefits of telematics to the insurance industry

 1. Risk assessment precision

Telematics allows insurers to assess risk with greater accuracy by evaluating individual driving behaviors. This enables them to offer personalized insurance premiums that reflect the actual risk posed by each policyholder.

 2. Promotes safe driving habits

By providing drivers with feedback on their driving performance and offering incentives for safe behaviors, telematics encourages safer driving habits. This not only reduces the likelihood of accidents but also leads to lower claim frequencies and costs for insurers.

 3. Fraud detection and prevention

Telematics data can be instrumental in identifying fraudulent claims by providing comprehensive insights into the circumstances surrounding an incident. Suspicious activities like sudden changes in driving patterns or discrepancies in reported incidents, can be flagged for further investigation, thereby reducing insurance fraud.

 4. Enhanced customer engagement

Telematics empowers insurers to engage more effectively with their policyholders by offering value-added services such as personalized driving insights, maintenance alerts and emergency assistance. This fosters stronger customer relationships and increases overall satisfaction.

Real-time examples of telematics implementation

Progressive Insurance – Snapshot

Progressive Insurance offers Snapshot, utilizing telematics to analyze driving habits. This innovative initiative allows policyholders to receive lower premiums for safe driving practices while adjusting rates for riskier behavior.

Allstate Insurance – Drivewise

Allstate Insurance has the Drivewise program, a telematics-driven initiative aimed at promoting safer driving behaviors among customers. Through real-time feedback and incentives like cashback rewards, Drivewise encourages policyholders to adopt safer driving habits, thereby contributing to improved road safety.

Travelers Insurance – IntelliDrive

Travelers Insurance introduced IntelliDrive, which customizes insurance prices based on individual driving behaviors. By offering savings for safe driving habits and adjusting rates for riskier behaviors, IntelliDrive aims to promote safer driving practices among policyholders while providing potential financial benefits.

In summary

Through the use of telematics, insurers can now personalize insurance premiums based on actual risk profiles, leading to the rise of Usage-based insurance.

With this trend, more audiences can be convinced to buy insurance, especially Gen Z and Millennials, since it not only promotes safe driving but also rewards policyholders with benefits like loyalty programs and discounted rates.

April 5, 2024
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