Rate adequacy is on the horizon for the industry after enduring a challenging hard market, and carriers are bolstering their digital infrastructure to prepare themselves for increased demand.
Insurance software companies such as Earnix, are playing a big role in the marketplace, as single end-to-end solutions are enabling carriers to offer more personalized and dynamic solutions.
Decision delivery platforms are a great example of a digital solution that is allowing carriers to understand customers’ unique needs and deliver the right products using artificial intelligence (AI) and machine learning (ML).
“What is unique is that our software sits on top of existing infrastructure versus having to replace it,” Udi Ziv, CEO at Earnix explained.
Well-established carriers have spent decades trying to build out technological capabilities, and a system overhaul can be very time consuming and costly. “Rather than taking four to six months to roll out changes, it can now be done within four days, including approvals,” he explained.
Operational efficiency is taking the form of automation to reduce the errors traditionally experienced with manual processes.
“Regardless of how cutting edge your APIs are, it all has to be compliant with local regulations,” he stated. “Carriers are operating across many different systems and supporting all aspects, whether it is data sources or telematics, takes some time to implement ML and AI models that predict customer behavior.”
Ziv brought up the example of usage-based insurance (UBI), and how tracking driving behavior is made easier with AI, but carriers have to be patient throughout the integration period.
“By definition, UBI is personalized and having the ability to collect that data while providing affordable pricing is a win-win for everyone,” he emphasized.
For carriers, maintaining confidentiality in an age of automation is top of mind. To ensure clients are comfortable with products such as UBI, carriers need to be transparent and fully understand the value of digitization.
In an age where social media and streaming services use predictive analytics to suggest shows and products, Ziv agreed that there is a higher level of trust when it comes to data collection, which bodes well for carriers hoping to be successful selling products like UBI.
“Analytics helps predict risk and allows carriers to have a competitive advantage in a dynamic marketplace,” he said. “We’re weaving AI with predictive data so carriers can have interconnectedness between all their systems.”
Data is like gold for carriers and having decision platforms work in tandem with existing infrastructures makes everyone’s lives easier in a complex economic environment.
Decision delivery platforms will eventually touch every segment of the industry and carriers need to embrace automation and personalized, dynamic data to stay relevant.
“Replacing everything is not practical. It can take up to five years to overhaul a carrier’s system and many need to assess who can accommodate to their specific needs,” Ziv added. “Thoughtfully stepping into the realm of AI and data is so important in a market that is changing on a monthly basis.”