PHILADELPHIA – Insurers have been slow to embrace artificial intelligence and analytics, and those who will not experience adverse effects on their business, experts say.
"I was surprised and scared of how bad insurers use analytics" Jonathan Kalman, founder of Eos Venture Partners in New York, a global investment fund that invests capital on behalf of insurance companies, said Tuesday at the Philly I-Day conference in Philadelphia. "They are handcuffed by analytics. They are paralyzed by analytics. Insurance companies just … … have something called AI and they can use it. Insurers who fail to use analytics will see their business diminish."
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"We at Eos believe that 99% of the 12 billion dollars will be flushed down the toilet, "Kalman said. "Of the $ 12 billion, most will be acquired and rolled into existing business."
Devices that invested the $ 12 billion did so because they believed the insurance industry was heading for a development that would facilitate the insurance buying process, he said.
"Getting insurance is like a root canal," Kalman said. "Your industry is difficult. You are not trying to make it difficult. It's just hard."
"The insurance industry is very complicated, very nuanced and very regulated, and you can't just jump in" he continued. "You will lose. It is because you have rules. It is because you have legislation. It is because you have consumer protection. It will be evolution. It will not be revolution."
The insurance industry is in a "moderate" development, with "a great deal" of the investments made during the first wave that goes to ideas and "overweight to personal lines" Purowitz said. Against the past year or two of the first wave, more money was invested in companies like insurtech firm CoverWallet Inc. which "could actually produce something", but then also the largest investment focus on innovation departments and laboratories – some of which were often manned by people without digital education, he said.
"They all worked on things that didn't affect the core of what an insurance company does day in and day out," he said. "They were looking for new ideas, mainly centered on technology. They had four or five pillars if it were AI or drivers without vehicles or telematics or blockchain or other things, but the majority of them were not centered on what basic business issues we are trying to solve or new. We see opportunities in the market for us to build a company around. There was more about how we play with technology. "
" When we now move into the second wave, less money is thrown on ideas and more money is thrown on things which are tangible … they get bigger amounts of money because they have started to prove it and it is much more consumable by the industry, "added Mr. Purowitz. "The other thing that has happened is that we have shifted from personal lines to slightly more commercial lines orientation."
"The insurance companies have been very slow to act and figure out how everything is done," he continued. "A good part of what (CoverWallet bring) must plug into existing structures, and these structures are not open."
CoverWallet's partnership approach with the insurance industry "is the right approach," says Kalman. "You can't swim against this industry." New York. "Compare it to self-driving cars that have to make real-time decisions when moving at 70 miles per hour. Our artificial intelligence is nothing compared to what happens in other sectors like self-driving cars, but we use machine learning and artificial intelligence, even though it is very basic in a way no one in insurance has done.
The company has "looked at insurance from a framework that no one has looked at insurance before, looking at insurance as a digital product you are subscribing to and that as long as you continue to pay, you will be insured, no different than Netflix or Spotify or Dropbox, "he said.