AI-Driven Underwriting with Doug Robare, Director of Deal Origination and Underwriting at Coverys Europe

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TLDR:

• There is a demographic challenge in insurance, with an aging workforce and a need for new talent, which AI could help address.
• Vendors have tackled specific areas of insurance with technology, but a holistic approach to improving the entire workflow is lacking.
• AI can help remove redundant processes, facilitate faster decision-making, and handle large data sets, but concerns exist about AI bias and hallucinations in complex product lines.
• AI has the potential to improve risk assessment, develop new products and services, and provide better customer experiences in insurance.
• The future lies in combining human expertise with AI capabilities to create a more efficient and transparent insurance ecosystem.

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Before we dive into the key takeaways from this episode, be sure to catch the full episode here:

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Meet Doug — An Insurance Underwriting Expert

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Doug Robare, currently the Director of Deal Origination and Underwriting at Coverys Europe, shares his extensive background — working for companies like AIG, Zurich Insurance, and Aviva across the United States and Europe.

Doug's journey, spanning 27 years in insurance underwriting, offers a unique perspective into the challenges and opportunities AI presents for insurance professionals. He is especially focused on exploring how AI is reshaping underwriting processes, the hurdles posed by legacy systems, and the regulatory landscape that governs this transformation.

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The Demographic Shift: A Catalyst for Change

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One of the most pressing challenges facing the insurance industry is the widening demographic gap.

As Doug points out, the aging workforce and the need for fresh talent present a unique opportunity for AI to bridge the divide. However, he emphasizes that technology cannot replace the human touch—the soft skills and empathy that are the hallmarks of great insurance professionals.

This demographic shift isn't just about replacing an aging workforce; it's about augmenting human capabilities with the power of AI. It's a delicate balance, one that requires a deep understanding of both the technical aspects of AI and the nuances of human interaction.

As younger generations, more attuned to technology, enter the industry and regulatory bodies, there's a growing hope for a more seamless integration of AI into the insurance landscape.

“Yes, there is a demographic difference. There are a lot of people exiting the marketplace. It does present, though, however, a huge opportunity for younger people coming into the market. Now, hopefully, there's going to be some knowledge sharing along the way. But what will inevitably enhance their experience and improve the overall risk landscape is technologies like artificial intelligence.” - Doug Robare

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The Quest for a Holistic Approach

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Doug highlights a critical issue in the industry's approach to technology: the lack of a holistic perspective. While vendors have made strides in addressing specific aspects of the insurance process, there's a pressing need for a comprehensive view of the entire workflow, from origination to claims management.

This fragmented approach to technology adoption has led to inefficiencies and missed opportunities. It's not just about introducing new tools; it's about fundamentally rethinking the insurance ecosystem.

Doug's vision for the future is one where AI is seamlessly integrated into every facet of the insurance process, creating a more efficient, transparent, and customer-centric experience.

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The Promise and Perils of AI in Underwriting

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Underwriting, the heart of the insurance industry, is the area where AI holds the most promise—and the most potential for disruption. As Doug explains, AI can:

• streamline redundant processes,
• enable faster decision-making, and
• analyze large data sets, leading to more accurate risk assessments.

However, this promise is weakened by the risk of AI bias and the potential for "hallucinations" in complex, emotive product lines like directors and officers (D&O) insurance. The future of underwriting, he suggests, lies in the synergy between human expertise and AI's computational power.

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Handling the Regulatory Landscape Maze

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As with any transformative technology, AI's integration into insurance is not without its regulatory challenges.

Doug paints a picture of a European regulatory landscape that is still tackling the societal implications of AI. The lack of technical expertise among regulators, combined with the rapid pace of AI's evolution, has created a complex maze of compliance issues.

However, Doug sees hope on the horizon. As younger, tech-savvy individuals join regulatory bodies, there's an opportunity for a more robust understanding of AI's potential. He urges insurance companies to proactively engage with regulators, to shape the future of AI governance in the industry.

It's a collaborative effort, one that requires open dialogue, transparency, and a shared commitment to ethical AI practices.

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The Future of Insurance: Combining Human Expertise and AI

Doug shares his vision for the future of insurance in the age of AI: a world where AI empowers underwriters, frees up time for higher-value tasks, and enables more personalized, efficient customer service.

There is a strong emphasis that this future is not about replacing humans with machines; it's about finding the right balance between the two.

Doug argues that the successful integration of AI in insurance will require a delicate balancing act. On one hand, insurers must embrace the efficiencies and insights that AI offers. On the other hand, they must maintain the human touch, which is the foundation of trust in the industry. It's a challenge that will require creativity, adaptability, and a willingness to experiment.

What is hugely impactful is “…using AI as a work empowerment tool, utilizing LLM and other forms of technology to improve the data processing and the decision making opportunities for underwriters. (...) So stay optimistic about the future…” - Doug Robare

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Conclusion

As the insurance industry continues to evolve, the impact of AI and ML will become increasingly significant.

Doug Robare's insights highlight the challenges and opportunities presented by these technologies, emphasizing the need for a holistic approach, a balance between human expertise and AI capabilities, and the importance of navigating regulatory concerns.

By embracing the potential of AI while addressing its risks, the insurance industry can create a more efficient, transparent, and customer-centric future.

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Want to learn more about AI in insurance?  Check out this episode on using AI to automate insurance workflows, boost ROI, and augment human expertise with Meredith Barnes-Cook.

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