In what is hailed as a groundbreaking initiative for London’s insurance market, Hiscox plans to implement this cutting-edge tool in the coming year, following a successful trial focused on automating the underwriting of a property sabotage and terrorism policy, where Hiscox acted as the lead underwriter.
The innovative AI model, developed through a collaboration between Hiscox and Google, promises to automate and streamline the underwriting process, marking a significant departure from the traditional person-to-person trading model prevalent in the negotiation of specialist commercial insurance contracts. The platform, leveraging Google’s generative AI and Hiscox’s digital technologies, extracts data from email submissions by insurance brokers and automates the entire process, from analysis to quote generation.
According to Hiscox, the implementation of AI tools is expected to dramatically reduce the time spent on generating quotes, transforming the process from days to mere minutes. This efficiency boost will enable Hiscox’s staff to focus on underwriting more complex risks, with the added benefit of facilitating increased sales activities.Kate Markham, Chief Executive of Hiscox’s London market division, said that the integration of AI will not replace human involvement but enhance it. While AI will handle various aspects of the underwriting process, human underwriters will continue to play a critical role in reviewing and confirming the models’ behaviour.
The anticipated go-live date for this transformative model is set for the second half of 2024. Hiscox is deliberating whether to deploy the capability across multiple lines of business or focus on a specific line. This strategic decision will shape the future landscape of AI integration in the insurance sector.While AI has been previously employed in analysing claims, the negotiation of specialist commercial insurance contracts has largely relied on traditional methods. Hiscox’s initiative signals a shift toward embracing AI in lead underwriting, a development that could reshape industry norms.Google’s involvement in the project underscores the ongoing competition among tech giants in the field of generative AI.
The recent release of products by Google, Microsoft, and Meta highlights the increasing accessibility of foundation models for businesses looking to develop bespoke applications in the realm of generative AI.As the insurance industry embraces AI innovation, the regulatory landscape remains a consideration. The recent agreement on the AI Act by the EU is seen as a landmark in regulating artificial intelligence.
However, the UK has emphasised its approach of not creating specific AI legislation in the short term, opting to rely on existing regulators to oversee the technology and foster innovation.The collaboration between Hiscox and Google represents a pivotal moment in the integration of AI into the insurance underwriting process, setting the stage for potential industry-wide transformations in the near future.
Original source: Financial Times
