The Dawn of AI in Insurance: A New Era of Innovation

Now that there is so much noise about AI (induced by ChatGPT, #bard and #poe, and other Large Language models!), there is an interest in knowing more about its applications in the Insurance industry. We recently released an FS Brew Hype episode on #chatgtp, and #ai  focused on #insurance. During the research, I unearthed several insurtechs utilizing AI:

1. Root Insurance employs AI and telematics data to assess driving behavior in real time, providing a risk-aligned, personalized auto insurance premium. This approach incentivizes safer driving practices and offers a more precise reflection of individual risk profiles.

2. Ladder Life utilizes AI to streamline life insurance underwriting. Insurtech's sophisticated machine learning algorithms analyze a broad range of data, enabling it to deliver customized coverage and pricing tailored to its clientele's specific needs and lifestyles.

3. Metromile leveraged AI to offer a pay-per-mile auto insurance model, aligning premiums with actual mileage and driving behavior. This approach introduces greater fairness, particularly benefiting low-mileage drivers.  Lemonade purchased Metromile in 2022.

4. FRISS and Shift specialize in fraud detection, harnessing the power of AI to analyze claims data and identify potentially fraudulent activities.

5. Brolly was an insurtech that offered an AI-powered advisory platform that personalizes insurance recommendations based on individual customer needs. Through this technology, customers can manage their policies effectively and efficiently. Brolly was acquired in 2020 by Direct Line Group and is now reportedly shut down.

6. Policygenius Inc. operates an online insurance marketplace that uses AI to match customers with suitable policies from various providers. Their platform makes it easier for customers to find and purchase insurance products.

These pioneering Insurtech companies have demonstrated the potential of AI to reshape the insurance industry.  Lessons for insurtechs in this region to learn from?