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[00:00:00] Robby Horner: From a broker perspective, I would say they can expect, and I hope are already experiencing, faster and smarter underwriting decisions.  

[00:00:08] Ryan Ward: With the use of aerial, use of AI, use of pre-filled data, we're doing that in a matter of hours or maybe a day. 

[00:00:17] Paul Lucas: Hello everyone, and welcome to an Insurance Business TV special, as we look at how technology is helping reshape risk assessment, claims and the customer experience. To do that, I'm delighted to welcome some of the people leading the charge. They are Robbie Horner, Managing Director in charge of CAT Product Properties and Wholesale Distribution at Victor. He's here representing ICAT, which is a Victor organization. And Ryan Ward, Senior Vice President of Insurance Sales at Nearmap. So, gents, give me a little bit of insight here. How are aerial imagery and AI practically changing underwriting decisions today in a way that brokers specifically can see reflected perhaps in faster quotes, better pricing, or improved appetite? Robby, tell me more.  

[00:01:04] Robby Horner: Yeah. So, the combination of these two tools is really helping do several things. One of the more obvious is eliminating questions that we need in order to provide a quote. It's really helping us quantify and really standardize the previously subjective property underwriting elements. So, one of the prime examples here is something like roof condition. And so, these two examples really allow actually underwriting appetite to be what I would say is less black and white on more of a overall true assessment of the quality of the risk. And we're able to do that at scale in a efficient and standardized, and also a repeatable way.  

[00:01:54] Ryan Ward: Yeah, great insight. And obviously we're seeing some of the same things as the technology vendor here, providing aerial, providing AI insights. We've partnered obviously with ICAT and others to provide what we believe is a best-in-class experience for the broker from a quoting perspective and a submission perspective. We're allowing them to grab data that is historic, really hard to find, and programmatically drop that into a prefilled submission so that underwriters, A, can work really, really quickly, or B, flag that, "Hey, we might need some more information." As Robbie alluded to, we've gotten really tight on the roof condition score at ICAT as a leading indicator of overall risk of commercial properties. And I think the last thing I'd mention is the transparency that ICAT is now providing their brokers on what their appetite looks like, what a great risk looks like. I think that's going to be the difference between the winners and the losers down the road as we continue to think about how do we attract more brokers, how do we attract that consistency, and how do we put our organization, ICAT or carrier ABC, at the top of the heap when a broker's thinking about where they want to place some business.. 

[00:03:12] Paul Lucas: If you don't mind, Robby, just tell me a little bit more about where you're seeing the biggest real-world impact of these tools, perhaps across underwriting, claims or risk selection. Indeed, how should brokers expect that to change in terms of the way that they place business?  

[00:03:27] Robby Horner: Yeah. So, we're becoming a lot less reliant upon what is pretty frequently outdated COPE information, and using that potentially outdated COPE information to underwrite the risk on what we assume it is based on what's on the paper application. So using the recent high-resolution imagery, and the data that we can see from the risk, we can truly evaluate it based on its current actual condition. And like I mentioned earlier, this is allowing us to sometimes broaden our appetite, and better select and better price risk. So an example is we frequently come across old roofs that we love, and we also sometimes come across new roofs that we really want nothing to do with. And if we were underwriting and selecting risk solely based off of the age of the roof on a paper application, then we might be missing those old roof opportunities, and we also might be falling into some of the traps that come with the new roofs that might be in poor condition.  

[00:04:42] Robby Horner: From a broker perspective, I would say they can expect, and I hope are already experiencing, faster and smarter underwriting decisions. Which will be leading to fewer post-bind inspection actions and potential issues. And then lastly, the other thing that I would add that I think is a big value faster and smarter underwriting decisions. Which will be leading to fewer post-bind inspection actions and potential issues. And then lastly, the other thing that I would add that I think is a big value is allowing these brokers to be passing some of this information along to their clients, and just that additional value add that is more than just delivering that piece of paper, and delivering some additional insight into their properties.  

[00:05:23] Ryan Ward: I think just what I might add here is from an underwriting perspective, speed and transparency is where we're seeing the biggest uplift. Particularly at ICAT, where a complex commercial property can often take sometimes days or even weeks to gather the right information in order to get that submission ready to roll. With the use of aerial, use of AI, use of pre-filled data, we're doing that in a matter of hours or maybe a day. I think that's a key win for not only the carrier MGA, but also for the broker, right? The broker knows that when they work with ICAT, it's going to move fast and they're going to have a real clear understanding of that risk and a real clear understanding of why they made a specific decision. I think from a claims perspective. Having an understanding of what that property looked like prior to a claim via the real-time type aerial that's taken as part of the underwriting and submission process, that just naturally speeds up the flow, right, and naturally allows a carrier or an MGA to fulfill the promise on paying out a claim. So those are some of the key things we're seeing across that. I think next we get into talking a little bit about how surveys, right, which I know ICAT has done a ton on, so interested to talk a little bit more about that here coming up.  

[00:06:54] Paul Lucas: Yeah. Well, before we get there, if you don't mind, can you just explain to me a little bit about how these technologies, Robby, are improving the quality and speed of risk information that the brokers are relying on? And indeed, are they reducing the need for traditional surveys in certain cases?  

[00:07:09] Robby Horner: So, without a doubt, the quality and the speed of information both go up, both of which are good things, I would say, for everybody involved in the transaction. And in terms of the surveys, yes, again, absolutely. The high-resolution imagery and the recency of that imagery, and then you layer on the AI tools on top of that imagery sometimes helps us avoid having to visit the property in person. And that would be true for whether it's a post-bind inspection, but also especially at the time of loss. 

[00:07:49] Ryan Ward: Yeah. And from our side, we work with hundreds of carriers who historically have said, "In every commercial risk, we're going to send a site visit." Right? And as they've continued to look through, look at, and leverage aerial and some of the AI that comes alongside that aerial, we're beginning to see that change, right, to a place where we can do some desk underwriting, where we can do some inspections from alongside that aerial, we're beginning to see that change, right, to a place where we can do some desk underwriting, where we can do some inspections from the use of aerial, the inspection being done based upon flags that are being created by the Nearmap platform to identify where those risks might be and, on the other side, where there might not be a risk, right? There might not be a reason for us to send an inspector, which, again, back to some of our previous points, is allowing ICAT to move really, really quickly through the submission process. You can imagine a commercial inspection is a timely and oftentimes very costly endeavor for a carrier and MGA to add to each submission.  

[00:08:53] Ryan Ward: This, again, is speeding up the process, creating transparency across the value chain here, and allowing organizations like ICAT to support brokers in a way that likely haven't seen before. So that's what we're seeing on the survey. Is certainly one of those things where there's a lot of cost tied process, creating transparency across the value chain here, and allowing organizations like ICAT to support brokers in a way that likely haven't seen before. So that's what we're seeing on the survey. Is certainly one of those things where there's a lot of cost tied up in these manual surveys. It oftentimes means people getting on airplanes, engineering resources being deployed. And even in those cases where we do indeed still have to send an inspector for a survey, leveraging tools like aerial and real-time imagery or recent imagery is allowing them to be more focused in that inspection process, right? We might notice ponding, for example, on an HVAC unit. Hey, that might be where we want to spend a little bit of time. We might notice fencing that has problems. That might be where we want to spend a little bit of time. And then we might have six or seven buildings on a commercial property that look great, and maybe we don't have to have the inspector spend much time there. So that's where we see this value.  

[00:10:03] Paul Lucas: Yeah. And if you don't mind, just let's dig a little bit deeper into that value if we can. From a broker perspective, Robby, where are we seeing perhaps the clearest value for clients? Is it better coverage outcomes here? Is it faster claims handling, or is it just improved risk insight?  

[00:10:17] Robby Horner: So, I think my answer to this one is a short one. There's value across all three of these categories, but the improved risk insight is the broadest, most influential added value, I would say. So, with that improved risk insight, better claims handling, better coverage outcomes, and overall better experience, I would say, for everybody involved. 

[00:10:46] Ryan Ward: Yeah. And I think the only thing I'd add there is the brokers' relationships with their clients, right? The broker is, of course, looking for that initial right submission, that initial policy, but how do we ensure that that broker is being able to successfully renew that book of business year over year? This type of information, both down to the broker as well as down to the insured, what we're finding is the level of transparency that we can provide and that is being provided through a system like ICAT's is allowing for, A, faster submissions, and then more timely and a higher percentage of successful renewals.  

[00:11:33] Paul Lucas: I think there's always a fear factor, though, isn't there, when people talk about automation and AI and it becoming more embedded in underwriting. So I'd love to get your perspective, gents, on where human judgment remains essential. And indeed, how do you explain that balance to brokers and clients?  

[00:11:51] Robby Horner: Yeah. So, as I think we all know, AI's still flawed in some ways. So it takes a lot of smart human perspective to know where those flaws are maybe most frequent or susceptible or the highest-risk scenarios that need to be validated by a human. In addition to that, so it takes a lot of human judgment to know where to inject tools like these into the overall policy life cycle. There are certain parts of the policy life cycle that are of high importance, and we've got to get those decisions 100% right. And those points of the life cycle, absolutely using tools like this to help aid those decisions. But at the end of the day, it's still the human who has the final call. The last thing I'd say is that I would describe underwriting as an art. The best underwriters really develop gut feels over time based on not information that's on an application or imagery or what the AI is maybe saying but probably based on years of experience. And so these nuanced skills will, I think, always continue to separate the best underwriters from the average underwriters.  

[00:13:28] Ryan Ward: Yeah. I think well said, Robbie. And I think I'd add, much like the broker not going away in the relationship with their customers, I think we feel strongly that the underwriter isn't necessarily going away, regardless of how far we come with AI and insights and whatever technology is next. What I think we are doing is providing those underwriters the right properties to look at and to be able to leverage those resources in the right submissions or in the right renewals. To Robbie's point, absolutely an art, and we want that art being applied to the most complex risks, to the submissions that are highly variable, that have a number of different buildings that the condition might look one way for a specific building, and it might look entirely different for another building. How do we look at the comprehensive kind of risk associated with that entire parcel or that entire group of buildings? 

[00:14:35] Ryan Ward: Yeah. That's where the underwriter is certainly not going away. And I think, again, how it relates to the broker is the broker can move fast on submissions that don't necessarily need a lot of underwriter's attention. And those that do need a lot of underwriter's attention now have the capacity to be able to provide that level of attention and to provide that level of insight and accountability and transparency back to the broker.  

[00:15:03] Paul Lucas: Everything that you've talked about today sounds incredibly advanced and forward-thinking, but if you can just gaze into the crystal ball a little bit more for me. Looking ahead, how do you think brokers should expect the interaction with insurers to evolve as aerial imagery and AI now become standard tools in underwriting and portfolio management? Robby, any thoughts on this?  

[00:15:26] Robby Horner: So especially on clean risks and good submissions, they, I think, are already experiencing a more efficient overall experience in those transactions. I mentioned this earlier, but they should be expecting and hopefully utilizing the additional services and information that they can pass along to their clients as an additional value add. And in general, what I would say is that this will be a positive thing and adding efficiency and making things easier for strong submissions on high-quality risks. I do expect it to probably do a little bit of the opposite for weak submissions on low-quality risks that allow us to really focus our attention on those potentially low-quality risks, gain all the information that we can possibly gain, which might lead to a little bit more time spent on those, but much less time spent on the clean, high-quality submissions.  

[00:16:36] Ryan Ward: I think brokers are best served serving their clients. And being in front of their customers day in and day out, trying to find the right solution for their commercial or personal insurance needs. I think leveraging these tools and working with partners that are deeply embedding these tools allows them to continue to perform those high-value activities with their customers in the field. Finding the right product, finding the right coverages, finding the right long-term plan for how an organization might grow and how insurance is impacted based upon that growth. Those are the types of conversations that we're trying to support brokers in and supporting them in having more of those conversations versus running down roof age information or condition information, or to Robby's points earlier today, COPE data. That's oftentimes outdated and not relevant based upon what the information a system like iCAT or Nearmap is providing.  

[00:17:39] Ryan Ward: So, I think those are where we see the biggest wins for the brokers. I think more broadly from a market perspective, I think the other thing that matters here is the relationship between the broker and a particular MGA or carrier. Those relationships are going to be strengthened based upon the use of tools between the broker and a particular MGA or carrier. Those relationships are going to be strengthened based upon the use of tools like aerial and artificial intelligence through the submission and renewal process. If we make it hard on brokers, or if you make it hard on a broker to submit business or to understand why a decision was made on a risk, it's likely they're going to move somewhere else. And I think that's one of the things that iCAT has absolutely nailed here, is the way in which they're supporting brokers, is bringing brokers back. Not only for renewals, but for those new submissions as well. So exciting down the road, and I'm sure there's things that we haven't talked about that are coming. But I think that's a good look at what we can expect brokers to see in the future. 

[00:18:49] Paul Lucas: Exciting times indeed. Looks like all of this should be really beneficial for brokers and indeed the whole insurance ecosystem, I think. A huge thanks to you both for your time today and for explaining all of this to us. I'm sure a lot of brokers will be checking out the iCAT website, icat.com, to learn more. And of course, once you've finished doing that, well, make sure you come back for more expert insights right here on Insurance Business TV.