AI Can See Clearly Now: How AI Technology is Steering the Future of Insurance

AI Can See Clearly Now: How AI Technology is Steering the Future of Insurance

Introduction

Insurance typically is not the most exciting topic to discuss at happy hours or neighborhood barbecues — until now, that is.  Fortunately, the insurance industry has not been immune to the wave of AI tech that has emerged fast and furiously right before our eyes.  From the pages of science fiction to an inescapable reality, AI is here to stay.  Whether we like it or not, fully embracing AI’s transformative power is not only wise, but necessary​​.

 

AI Drives the AV Revolution

The rise of AI tech behind autonomous vehicles (“AVs”) has revolutionized everything that touches the automotive industry – including and especially insurance.

Regulators are quickly trying to respond to even quicker moving AI technology, developing legal frameworks aimed at determining liability in accidents involving driverless cars. One of the most difficult questions presented: When cars drive themselves, when should a human be held accountable for an accident?

Like many states, Washington has attempted to proactively address this emerging issue through legislative action.  House Bill 2470 of the 2020 Regular Session sought to redefine “driver” within the context of driverless cars by establishing the autonomous vehicle as the sole operator and driver when in automated mode​​.[1]  Negligence is about accountability—putting a human face to the responsibility of a vehicle’s actions on the road. Suggesting a computer could be ‘negligent’ in an accident is a paradigm shift to our existing standards of liability.  As drivers become passengers in their own vehicles, their legal responsibilities become diluted and we enter uncharted territory.  In the age of AI, we are no longer just debating who is driving or at fault – we are debating what driving even means when the driver is not human, redefining fault itself.

Although the bill did not pass this session, this attempt to redefine what it means to be a driver is an example of the thrilling but complex intersection of insurance and AI happening all over the country, marking the beginning of significant and exciting shifts in our industry.

 

Shaking Up the Status Quo

While the integration of AVs onto our roads continues to develop, we already have the ability to harness the power of AI to revolutionize the industry.  Leveraging AI’s algorithms and data metrics can unlock pattern detection, enhancing predictive accuracy and preemptively addressing future challenges proactively.[2]

Schaefer City Technologies is a groundbreaking insurtech company at the forefront of the AI insurance frontier, particularly involving high-stakes litigation, having launched the industry’s first software product on the market aimed at detecting Nuclear Verdicts® in claims files before they happen!  Through machine learning, NaVel™ acts as an early warning system through ongoing analysis of data in existing claims files (and new data as it is added) to identify risk factors linked to likelihood of a Nuclear Verdict®.[3]  NaVel™ is the first-ever software to help predict these verdicts and alert insurance professionals to a Nuclear Verdicts® risk score so claims professionals and their counsel can adapt and strategize more effectively, efficiently, and proactively.[4]  Harnessing the power of AI and the usability of a chat bot, Big Blue™ offers strategic insights for trial counsel who can ask questions and receive a detailed and tailored report designed to prevent a Nuclear Verdict® at trial. Ultimately, technologies like these have the potential to save insurers billions of dollars, benefiting policyholders and curbing social inflation.

 

Takeaway

AI’s relentless march forward brings transformative changes to the insurance industry that turn the status quo on its head and could save billions of dollars to insurers.  While the future of AI is can feel like an unpredictable journey, one thing is certain: adaptation and embracing these advancements is imperative for staying relevant and innovative in a rapidly evolving technological landscape.

 

 

 

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Sources


 

[1] Washington State Legislature. “HOUSE BILL 2470.” 66th Legislature, 2020 Regular Session, 14 Jan. 2020, Z-0788.1, sponsored by Representatives Hudgins and Kloba; by request of Uniform Law Commission, Referred to Committee on Transportation. https://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/House%20Bills/2470.pdf.

[2] SensEI. “Magic Algorithms: Does AI Really Predict the Future?” Geek Culture, 24 Mar. 2023, medium.com/geekculture/magic-algorithms-does-ai-really-predict-the-future-9fe65c974ecc.

[3] “Schaefer City Technologies Launches with First Software Product to Help Insurers Identify, Manage, and Reduce Nuclear Verdicts®.” Business Wire, 29 Mar. 2023, 09:30 AM EDT, San Diego.

[4] https://www.schaefercitytech.com/NaVel.aspx