- AI is disrupting the insurance industry by allowing for faster and more user-friendly claims and creating more transparent and customized policies that suit the client’s situation
- AI Property showed its mettle during Japan’s 2021 typhoon season, resolving claims for MS&AD Insurance policyholders hit by Typhoon Mindulle as quickly as in a single day
- Insurance technology replaces the traditionally long and painful process of getting a claim or settling for a one-size-fits-all property insurance policy
Insurance technology brings in more innovative solutions for homeowners and insurers thanks to artificial intelligence (AI).
AI is disrupting the industry by allowing for faster and more user-friendly claims and creating more transparent and customized policies that suit the client’s situation. This replaces the traditionally long and painful process of getting a claim or settling for a one-size-fits-all property insurance policy.
AI disrupting the insurance trade
AI Property from Tractable, for example, allows anyone with a smartphone to access damage quickly and efficiently to buildings caused by hurricanes, floods, and other natural disasters.
Use its mobile-friendly web-based app to take photos of the external conditions and submit them to Tractable’s AI platform, trained on an extensive database of claims and damaged property. The amount of damage is immediately assessed and relayed to the homeowner’s insurer. There is no need to call an appraiser to come on-site.
“Climate change is leading to more frequent and severe natural disasters. Hurricanes leave households without proper homes. By allowing homeowners to immediately self-assess their homes via AI-augmented damage appraisal, insurers can intervene faster and at greater scale, to help their customers at their time of greatest need,” said Alex Dalyac, co-founder and CEO of Tractable, which develops AI systems for visual assessment and disaster recovery since 2014.
AI shows mettle during Japan’s 2021 typhoon season
AI Property has already shown its mettle during Japan’s 2021 typhoon season, resolving claims for MS&AD Insurance Group Holding Inc policyholders — hit by Typhoon Mindulle last October — as quickly as in a single day. The traditional claims process for disaster relief could take months.
Currently, MS&AD only uses AI for wide-area disasters, such as typhoons, with the AI-generated estimates being verified by humans. It also continues to work with Tractable to expand AI coverage to include indoor damage, such as water leakage and smoke, in the future.
First insurance tech stack for multi-family properties
Meanwhile, fast-growing digital insurance provider Honeycomb has developed its AI-driven technology as the first technology stack for multi-family properties and the first to deliver bespoke instantly, “right-priced” insurance coverages. This is a welcome innovation for landlords and condominium and homeowners’ associations grappling with the complicated and time-consuming insurance processes.
“Commercial lines insurance and specifically insurance for multi-family properties are ripe for disruption given the sheer complexity entailed in underwriting this class of risk, its manual processing legacy, and the absence of a leader in the market,” said Itai Ben-Zaken, co-founder and CEO of Honeycomb which has offices in Denver, San Francisco, and Tel Aviv.
“At Honeycomb, we have succeeded in converting the institutional knowledge of our team of industry veterans into algorithms that parse deep, first-party, location-specific data to more accurately evaluate risk. As a result, we can perform more robust underwriting quicker and at a lower cost structure than previously possible.”
New solution streamlining customer and broker experience
Its new solution streamlines the customer and broker experience by leveraging its unique underwriting technology that accurately “right-prices” every individual risk and provides discounts that no other provider gives. It also enables it to offer custom insurance coverage that can adapt to the client’s needs.
For example, it can insure properties with Airbnb rentals while offering enhanced Ordinance and Law coverage, distinct Business Income and Extra Expense coverages, and a right-sized approach to deductibles in risk-prone areas.
Policyholders who follow Honeycomb’s guidelines and mitigations requests also get deeper discounts with time, thus encouraging positive self-selection. Those who take care of their properties get better prices.
The brokers at Honeycomb can provide as many as 30 bindable quotes per hour and in real-time, thanks to its proprietary algorithms and first-party data. The process of producing a single quote typically took weeks with multiple “touches” and follow-ups, so the dramatic slash in time means more profit for the brokers.
While insurtech hasn’t been as much in the spotlight as fintech, with results like that coming forth from startups like Tractable and Honeycomb above, the disruption to the insurance industry looks to be a win-win for both the clients and insurance providers.