Transform the middle market with artificial intelligence

Speaking on Day One of Commercial Lines innovation USA in May 2021, James McKenny, chief strategy officer at Intellect SEEC, was in discussion with Rob Galbraith, director of innovation at AF Group, on transforming the middle market with artificial intelligence (AI).

The session raised a number of key points that are concerning underwriters and brokers today, such as how to effectively target a commercial segment that is neither an ideal target for straight-through-processing like the small business sector, nor a large scale enterprise where the past can be very predictive of the future.

McKenney acknowledged that it is difficult even to define what constitutes the middle market, but noted that those with premiums between $50,000 and $100,000 would appear to fit the bill today.

What he is certain of, however, is that “there’s a ton of opportunity to drive efficiency” and went on to explain the myriad ways carriers could use artificial intelligence to improve their overall processes.

Take submission, for example. Leveraging technologies can certainly make this process more efficient and quicker, while also freeing up the underwriting assistants to move away from manual tasks and more into a value-added space. AI is effectively building the role of the junior underwriter.

Despite the wide availability and relative ease of implementation of AI tools, McKenney acknowledged that brokers and carriers are still leaning heavily on “old-fashioned” tools such as email and paper.

“Any reluctance to adopt AI should be swept away by the learning that it’s possible to make an 80 percent-plus efficiency gain in submissions and reduce processes that took days down to mere minutes,” he explained.

The session revealed that carriers’ reluctance to adopt AI solutions could be caused by their past experiences. Galbraith asked McKenney if they had perhaps struggled to see the full value of their investments in prior solutions.

“In a recent survey a significant majority said they were investing in AI but not seeing the benefits they thought they’d see,” McKenney admitted.

He suggested this was down to implementation and treating it as a change management exercise. Technology may be fantastic but “the biggest challenge is the human-machine interaction,” he said. Helping users have faith in what the machine is doing to build confidence sets you up to succeed, he added.

During the session, McKenney detailed how AI can help the sector make the most of the first party data it has, as well as ingest third-party and unstructured data to provide underwriters with the best context in which to make decisions.

“This doesn’t just help manage the risks they are used to dealing with, but also helps them identify the risks to go and hunt for,” he revealed. “It’s all about getting smarter, earlier in the funnel.”

The recording of the session has a wealth of information for carriers and brokers considering deeper AI implementations, including a roadmap to modernise the information exchange and how to use an improved submissions process to transform the business as a whole. You can view the session here.