Can insurtech boost nat cat preparedness?

Can insurtech boost nat cat preparedness? | Insurance Business Canada

Catastrophe & Flood

Can insurtech boost nat cat preparedness?

AI may be the key to speeding up disaster response

Catastrophe & Flood

By
Nicole Panteloucos

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.

Transforming risk assessment through AI

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.

Balancing AI with human connection

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.

Tips for brokers: Using AI to strengthen client relationships

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:

Leverage AI for personalized insights: Utilize AI to gather and analyze relevant data about your clients’ risks and preferences. This allows you to enter client meetings armed with tailored insights, making conversations more meaningful and demonstrating your commitment to understanding their unique needs.

 
Automate routine tasks to focus on relationships: Delegate repetitive tasks such as data entry and basic research to AI. By automating these time-consuming activities, you free up valuable time to engage more deeply with clients, allowing you to strengthen relationships and provide higher-value advisory services.

 
Foster open communication and trust: While AI can enhance decision-making, prioritize building trust through open, honest communication. Make sure clients feel heard and understood and reassure them that your human expertise complements the data-driven insights provided by AI, reinforcing the personal connection in your client relationships.

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