Does emerging artificial intelligence-focused insurtech provide more opportunities for captives? That’s a question confronting our industry with the growing trend of automated data analytics in insurance.
At the same time, Munich Re reported its US-based insurtech platform, Slice Labs, has launched its on-demand homeshare insurance product across 13 states. Slice’s insurance product is specifically designed for homeshare hosts who participate in platforms such as AirBnb or HomeAway, and covers the time period hosts rent their homes out. Machine learning, which is a branch of artificial intelligence that gives computers pattern recognition and computational learning capabilities, is gaining momentum in the insurance industry. Specifically, 54% of the almost 200 insurance executives surveyed said that their organization was using machine learning to support predictive analytical modelling functions. Furthermore, 70% of those who deployed the technology applied it to risk modelling, while 45% used it to develop demand models, and another 36% employed it for fraud detection.
As I am sure all of you remember in a past blog (you know, the one with the picture of me and Beyoncé – one of my faves) I took your valuable time to ramble on about this trend, focusing on a peer-to-peer insurance start-up called Lemonade. Lemonade, an artificial intelligence-focused insurtech company, more than doubled its clients in two months, according to its co-founder, from 6,000 customers at the end of March to about 14,300 by the end of May.
Having more insurance companies employ machine learning technology in their underwriting and modelling could mean more opportunity for organizations with risks that don’t fit the “emerging algorithm” to utilize captives. Not that captive insurers and service providers aren’t using the emerging insurtech technologies as well; just that the bespoke nature of captives could further differentiate them from traditional insurance as the robots take over!
I look forward to hearing from you.