The 2023 Spring Membership Meeting education program included a presentation on the hot topic of artificial intelligence. Rooney Gleason, Chief Insurance Officer at Evolution IQ and Adam Fisher, Chief Data Officer at Sedgwick served as panelist with Marcus Doran, Senior Director Commutations at AIG as the moderator. A video replay of this presentation is available in the AIRROC On Demand library.
Run-off transactions are extremely complicated – especially because each party must understand nuances and hidden value inside entire claims blocks in a short amount of time. Whether you’re selling a block, buying a block, or contracted to close the block once purchased – each party is at a disadvantage if they don’t have line-of-sight to the resolution potential (or lack of potential) inside those claims.
AI, along with big data, are transforming the insurance industry and helping to improve outcomes while reducing costs in a variety of ways. AI in software is helping insurance professionals augment their knowledge. Incorporating systematic investment in AI technologies into their business models will yield significant return on investment.
Some examples of the data driven insights discussed by the panel include sophisticated models powered by AI that predict claim development and influence better outcomes; dynamic advance analytics platforms that visualize trends, outcomes and development opportunities and facilitate benchmarking studies that allow for drilling down into lines of business, industries and geographies.
The promise of AI in run-off transactions is enormous and will likely lead to more partnerships between software companies with strength in AI competency and organizations in the legacy space specializing in specific need modeling. AI technologies can assist in deal origination by identifying prospective deals by sourcing huge amounts of data and deal structure by the use of smart contracts (parametric coverage). Execution of legacy deals can be facilitated by AI powered extraction of data from the source and configuration into a common data format for ease of data ingestion. Applying AI capabilities to claims can provide rapid forecasting of potential costs, continuous monitoring for most resolution ready claims and track future development.
Implementation of AI in the legacy sector is at the early stages but it is green fields ahead with applications that seem limitless. Companies that strategically employ AI will gain a technological edge that will drastically change the lay of the land and force others to test the waters in order to stay competitive.