June 11, 2023
The Partnership for Insurance Information's Founder and CEO, Truman Esmond, was featured by AM Best TV with an interview on the topic of AI and the opportunities and challenges in Insurance underwriting, products and regulation.
Truman presented on a panel for AI case studies and the applications, implications and regulatory solutions available for insurance, with Dror Katzav, CEO of Atidot.ai during the IASA Xchange conference in Minneapolis, Minnesota, June 6, 2023.
Following the panel, Truman sat with AM Best for a brief interview on the subject of AI and the opportunities for Insurance, to establish the underwriting and regulatory structures to leverage AI in insurance operations and in evolving insurance products.
Watch the video - transcript follows.
AM Best TV's John Weber: I'm John Weber for AM Best TV and we're at the IASA conference in Minneapolis. Speaking today with Truman Esmond. Truman is the founder and CEO of the Partnership for Insurance Information.
AM Best: Truman you presented here at the conference on Artificial Intelligence, what do you see as some of the opportunity for AI?
Esmond: The opportunity for AI in the Insurance industry and risk in general is huge. AI as everyone is well aware, certainly in the last six months has taken everyone by storm as it has become extremely accessible.
The key for the insurance industry is to being able to actually underwrite AI. Not in the context of regulating the technology or diving into the technology, but in the application of AI in underwriting contexts. How do our clients, the businesses and individuals, leverage AI in the risks that they take and what kind of decisions and uses are informed by AI.
AM Best: How should regulators be looking at AI, or how are they looking at it?
Esmond: They are looking at it in a very broad consideration both in how they are using it themselves, and we went through at AAIS a great example with the Department of Insurance of Connecticut, who's using AI Natural Language Processing to dramatically speed their filings in their commercial policies, going to hours from weeks or months of filing time.
But then there's the concerns that regulators have about AI use in Insurance products and further, in the markets that insurance products are trying to serve. And that's the challenge we're really facing is how to hold the AI models accountable to the purposes that they're trying to do in the risk transfer context. Just like we'd trust a human being and their education, experience and decisioning in underwriting or business operations, we need to put that same framework around a much more real-time mechanism to hold a learning machine accountable to the decisions and changing decisions it might make over time.
AM Best: Accountability? How are you able to put structure or guardrails around this technology?
Esmond: Short answer is enterprise blockchain. Using immutable records of blockchain allows the mechanisms be they traditional risk and cat models to modern AI solutions holding them accountable to the purposes, intents and tests that you would have them run as it learns and as the contexts of it's decision making changes.
AM Best: Truman, how much do you think insurance products will change as a result of AI?
Esmond: Completely. To the point where we probably won't even recognize them as insurance products anymore, because they will be much more involved in the activity of risk transfer. As your risk changes, AI and the experience around the insurance product will you inform your decisioning about the risks you want to take, wether it's simple things on directions, or larger risks around capital management for a book of business in the billions of dollars.
AM Best: Truman, thank you so much for taking the time to speak with us today.
Esmond: Absolutely my pleasure, thanks for having me. Enjoy the conference.
The Partnership for Insurance Information (PII) is a Public Benefit Insurance Advisory Organization serving insurers, regulators, communities and businesses involved in risk to develop Community Risk Solutions - modern insurance products connecting the ecosystem stakeholders to information and action, creating sustainable value and resilient communities. Learn more and support PII at https://InsInfo.org.