P&C insurance companies are relying on legacy workflows to manage risk in their portfolios

The way in which property and casualty (P&C) insurance carriers assess homes for underwriting, renewals and claims requires many manual touchpoints and dates back to 1752—when Benjamin Franklin founded the first insurance company in the United States. Since then, the insurance industry and world have both changed significantly.

While technology has certainly played a role in the pursuant insurance revolution, there are still advancements to be made in the quest for efficiencies, top line revenue, and optimization of underwriting and claims. Climate change from our collective industrialization has made it more difficult to determine the likelihood of a home being adversely affected by a disaster—and the cost and time for manual questionnaires and inspections remain as cumbersome as ever.

The resultant insurtech boom has taken advantage of these weaknesses, and new-age companies like Openly are redefining the business, responding equally to today’s consumer expectations for ease and industry pressures for automation. This has further fractured the industry, forcing traditional companies to compete and innovate. 

But leveraging new technology like artificial intelligence (AI) and machine learning (ML) to understand risk, diversify risk and respond to risk is not impossible.

Utilize AI to understand risk

Today’s industry leaders recognize the talent gap as the biggest obstacle to leveraging the opportunities presented by AI and ML. In a Gartner survey, 90% of respondents affirmed this as a top priority. 

Chart: 90% of insurance respondents rate AI/ML capability as "significantly insufficient" or "lacking in places".

Fundamentally, these technologies can help to streamline underwriting. When it comes to understanding a property, properly trained and developed models can utilize different types of imagery to return dozens of property characteristics. Arturo’s models, for instance, return over 70 characteristics in five to seven seconds—and it gets faster every day. 

This allows underwriters to focus on verifying information while reducing friction at the point of quote, setting the policyholder up for a truly modern insurance experience and increasing quote-to-bind ratio. One Arturo customer saw a 13% uplift in quote completion and conversion. 

Utilize AI to diversify risk

Like any other part of life, homes are always changing. As trees grow, hail falls, wind blows and homes are remodeled, AI applied to imagery that is high resolution and high frequency can be used to monitor these changes—and reassess the risk profile. 

High resolution imagery means the image is clear enough to be usable. The clearer the image, the better the model can derive high confidence insights. High frequency means that the same property is captured multiple times over time, ensuring a true longitudinal view of risk. Using different capture devices, from aerial to drone to satellite imagery, exterior property conditions can be recorded and reported exponentially faster, more accurately, and more frequently than on-site assessments. 

By using these types of models, you can keep a finger on the pulse of the health of your portfolio, enabling you to build a balanced risk profile for your book of business. At the renewal stage, for instance, you can easily determine how the risk of a policy has changed, comparing historical information to today’s imagery to make informed choices that align with the larger picture. 

Utilize AI to respond to risk

And when things go wrong, these same historical-to-present-day comparisons can enable faster response. Sending inspectors on site can be dangerous and costly amid an ongoing natural catastrophe, and the use of “gray sky” imagery—or imagery that is taken just days into the aftermath—can enable a speedy evaluation of the policies in force in the area. It also makes it easy to suss out fraudulent claims. 

This allows claims adjusters to quickly triage the situation, proactively reach out to policyholders, and deploy resources for the properties that need it the most. Not only is it more efficient for carriers, but it is also a lot safer for contractors.

Building the future

According to Gartner, the first step in implementing AI-based technologies is to partner with an outside provider. By providing the insurtech partner with clearly defined metrics and closely partnering with them to strengthen your business, they can make improvements on their AI modeling, and you can focus on what you do best: protecting the people behind the policies. Gone are the days of manual underwriting and claims for P&C insurance. With the infusion of AI-based technologies and ML data models, insurers are demanding things be increasingly automated, standardized, and objective. Prospective policyholders can view a quote in a matter of seconds when insurance carriers have access to sophisticated technologies—and when a claim occurs, insurers can smoothly handle the process, laying the groundwork for a truly exceptional and easy policyholder experience.