Still grappling with the devastation left in the wake of Hurricane Milton, another named storm, Hurricane Oscar, is now swirling its way through the Bahamas. As the severity and frequency of natural disasters is only expected to rise, the insurance industry is faced with an urgent need to enhance its resilience.
A potential solution to this challenge lies in the opportunity to leverage cutting-edge insurance technology, which can play a critical role in both predicting and responding to natural disasters.
Robert Pick (pictured), EVP and CIO at Tokio Marine North America, spoke with Insurance Business about how digital tools can empower insurers and brokers to better manage these risks, while also maintaining the human connections that define the industry.
Just a few years ago, many insurtechs lacked a deep understanding of the insurance industry, but Pick has noted a marked improvement in this area.
“In a general sense, all insurtechs now speak more insurance, which is great. We’ve also improved our ability to communicate tech in relation to resilience,” he shared.
Pick highlighted the invaluable role of insurtech solutions in identifying point risks, such as wildfires, which continue to pose a significant threat across Canada. “Technologies that can pinpoint the location of every fire hydrant in a specific area were virtually non-existent just five or six years ago, but now there is a plethora of options available,” he said.
Real-time data delivery is crucial in solutions like these. As Pick explained, whether it be text, images, or videos— generative AI can analyze data and return it with a level of analysis that helps insurers uncover insights previously hidden between the cracks.
In this way, AI serves not only as a risk management tool but also as a means to unlock new business opportunities. For instance, by identifying anomalies in risk profiles, AI can empower insurers to consider properties that (due to weather risk) were once deemed too risky for coverage.
Predictive modeling enables AI algorithms to analyze historical data and develop models that highlight potential risks. This approach allows insurers to evaluate risk from a fresh perspective, enabling them to underwrite policies they may have previously avoided.
While AI and data analytics are revolutionizing the nat cat space, Pick stressed the importance of maintaining the human connection in insurance.
“Agents play a critical role. They understand risks and policyholders better than any carrier can, because they're right there, having those direct client conversations. Ripping that away for anybody's AI, is fraught with danger,” warned Pick.
For brokers, the challenge lies in using AI tools to enhance their ability to serve clients while ensuring that personal relationships remain intact. According to Pick, strategies brokers can use to strike that balance include:
