Every week The Friday Five will bring you interesting news and information from around the insurance industry. This week: State of AI/ML in the Insurance Industry and Investing in Automation.
State of AI/ML in insurance
A new study released by LexisNexis® Risk Solutions found that the majority of the respondents (62%) work for insurance carriers that have already adopted artificial intelligence (AI) and machine learning (ML) initiatives and that an overwhelming majority (75%) believe AI and ML can provide carriers with a competitive advantage through better decision-making. While carriers are generally positive about their use of Artificial Intelligence and Machine Learning (AI/ML), implementation does come with its own set of challenges surrounding staffing, data and compliance. Read the press release for more information.
Invest in Automation for Future Growth
Excerpted from Naresh Kothari’s Property Casualty 360 article, Automation in the Insurance Industry: The mature insurance industry was able to withstand most of the macro-economic challenges thrown at it this year. However, they are feeling the stress from savvy InsurTech companies who are introducing new products quickly and identifying new opportunities to engage with customers using the latest digital technology. Automation built on robotic process automation (RPA) and artificial intelligence (AI) has seen a spike in adoption by insurers as many of these manual processes can now be automated with minimal investment and time.
Insurers Cannot Drop Policies in California
The California state insurance commissioner this week issued a ban on insurers canceling coverage for homeowners in or near areas where wildfires burned this year. The ban is based on a state law enacted in January that allows the commissioner to provide temporary relief to homeowners from insurance policy cancellations. The ban is in advance of an expected legislative battle next year. Read more in Bill Swindell’s Press Democrat article, State insurance chief blocks insurers for a year from dropping homeowner policies near Kincade fire.
Near term outlook for property/casualty stable
The outlook for the U.S. property/casualty sector is stable and not likely to change in the next 12-18 months, Fitch Ratings Inc. said in a report Thursday. Rising claims cost uncertainty in casualty lines, however, creates the potential for future adverse reserve development, and competitive pressures challenge underwriters to produce adequate returns on capital. The industry is expected to generate “moderately” improved underwriting profits in 2019, and rising premium rates in many commercial lines should drive continued underwriting profits in 2020. Real more in Matthew Lerner’s Business Insurance article, US property/casualty sector outlook to remain stable: Fitch.
New auto technologies still spark uncertainty
Excerpted from Denny Jacob’s Property Casualty 360 article, Consumers still lack confidence in self-driving battery-electric vehicles: While many auto manufacturers are preparing for a future where demand for self-driving and battery-electric vehicles is the norm, it’s unlikely to be anytime soon. According to the J.D. Power 2019 Q3 Mobility Confidence Index Study, many consumers still lack confidence in these technologies. More than two-thirds of consumers say they have little to no knowledge about self-driving vehicle technology and well over half say they are unlikely ever to purchase or lease a self-driving vehicle.