Creating the best insurance solutions possible is made easier with the right technology. Artificial intelligence and successfully leveraging data have paved the way for more accurate risk assessment and pricing, but a comprehensive plan is still needed to integrate digital solutions efficiently.
Richard Kahlbaugh, CEO at Fortegra, spoke to Insurance Business about the company’s business approach, and where the aim is to improve product numbers and profitability using artificial intelligence and machine learning.
“The first step in the process is to identify opportunities of similarly situated or homogeneous risks. Once we know what product we’re underwriting and what the target risks look like, we take those characteristics, have our digital partners scan the web for publicly available information, and use their AI engine to identify any targets by geographic region that meet those risk characteristics,” he explained.
This information is then passed on to Fortegra’s underwriting agency to assess opportunities for growth, improving the overall efficiency of the sales process. Now data can play a critical role and be applied to an AI engine to ensure the hierarchy of risk characteristics are properly set.
Kahlbaugh highlighted that this strategy allows underwriters and agents to be far more productive, and the application of technology to improve both relationships ultimately translates to better risks, lower loss ratios and higher commission profits.
From an underwriting perspective, applying AI on a broad scale provides a more refined approach to risk. The process will not be completely automated, but once risk can be graded based on publicly available data agents will be provided with more accurate price ranges.
In this hard market, people are running from a lot of risk, but Kahlbaugh noted that if you have AI as a support feature, and you know the pricing points of different risk classes, its easier to make a predictive model for business partners.
“We’re constantly looking at the experience that our insureds have, but we also look at the agent experience and try to apply technology to improve the entire process,” he said.
The application of the right technology varies depending on the line of business, but simplicity and accessibility are universally essential for clients, especially during the claim’s lifecycle.
“What we’re finding is the majority of people still want to report a claim over the phone,” Kahlbaugh added. “Email would probably be second and text is a distant third.”
The CEO mentioned that innovation is not just about communication bandwidth and how clients decide how to interact with insurers - it’s how to approach data once it is received.
“We’ve developed a concierge claims team,” he said. “If we consider warranty claims, we looked at all the data that was there, assessing frustration points that arise when customers are under extreme pressure.”
Fortegra’s concierge claims team works on the client’s behalf with the repair service to ensure they are on time and have the necessary means to fix the situation.
“We have empowered this very unique group of claims professionals to take the steps necessary to satisfy the customer’s needs,” said Kahlbaugh. “Technology enhances communication, but you still need that personal touch in certain circumstances.”
As more data is collected, speed and pricing consistency will naturally improve.
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“If you lower the loss ratio through the use of AI, costs will stabilize,” he said. “Technology is evolving so fast in insurance, and insurtechs have forced carriers to become more conscious of the varied applications of technology to improve the customer experience.”
Insurance is unique as the industry prices a product before costs are known, but with the right data, there is more insight and accuracy applied to costs. The industry is making strides with risk assessment and pricing accuracy, keeping everyone in the value chain happy.
“Our big push right now is AI and using it to touch all our constituents which is a work in progress,” Kahlbaugh added. “It will be an investment that lasts for many years.”
