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The insurance industry is not making fast enough progress on AI, Accelerant’s Wentworth

1st March 2023 - Author: Jack Willard

In an interview with Reinsurance News, Heather Wentworth, Chief Data Officer at Accelerant, has suggested that the insurance industry as a whole is not “making enough progress” to get the data needed to successfully use artificial intelligence (AI) technology — which she argues will be transformative for the ecosystem.

AI and machine learning has become a growing topic within both insurance and reinsurance over the last few years, as companies begin to use this technology to manage manual, low complexity workflows and increase operational efficiency. Since its founding in 2018, Accelerant has focused on building a platform that creates better risk exchange outcomes, which Wentworth said started with investing in better data infrastructure.

When answering a question regarding what advantages do companies have who possess both the talent and resources to be able to use this technology, Wentworth said: “Ultimately faster information leads to earlier — and better — decision making.

“We’ve seen this a million times at Accelerant in our work with our Members. Our technology platform lets us detect issues early. That helps us make good decisions more quickly — mitigating issues before they turn into big problems, for example. But it’s not just about underwriting decisions; it’s about decision making for the business as a whole. The outcomes you’re able to achieve when you have access to and confidence in the data are just unbelievable.”

She added that there are a number of low-hanging fruit opportunities that come with applying new technologies; for example, natural language processing (NLP), which can free up time for underwriters to focus on their actual business.

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“Think about how much information has to be interpreted by underwriting. People are spending hours writing up those underwriters’ summaries when you start working with more complex businesses. Financial services and trading have been relying on NLP for a long time now to generate stock reports and insights, we as an industry are still not tapping into that.”

Wentworth also highlighted how, despite the gaps today, the industry may have an opportunity to take a leadership position in AI ethics, with synthetic data presenting another area of opportunity for the industry.

She adds: “One silver lining of AI being so nascent in our industry is that we have the opportunity to build things the right way from the beginning. There are actually a lot of privacy implications and regulatory considerations when it comes to integrating AI.

“Machines don’t forget — so there need to be safety guardrails in place. As an industry we need to take the steps that financial services in other industries are doing, to make sure that we are aligned for that protection and use of the data. I think synthetic data is the gold standard when you start to develop models and use other sources of AI.”

In addition to investments in data, Accelerant Holdings launched Flywheel Re, a $175 million sidecar investment vehicle in August 2022.

Addressing the benefits that Accelerant has seen since launching the sidecar, Jeff Radke, CEO and co-founder of Accelerant, said: “Accelerant’s a platform for risk exchange, where we’re connecting specialty underwriters with the ultimate risk capital providers. Historically this work has been done with insurance company and a reinsurance company and a bunch of brokers floating around. But we are reimagining that. For example, we’ve got the ability to take a small commercial policy in Spain or in California, and deliver it to institutional investors, with extraordinarily low friction. What’s the benefit there? Ultimately it creates much more flexibility and consistency which improves outcomes — the size of capacity and the amount of capital is extraordinarily consistent, so we’re able to give a guarantee of availability along with much better data and insights.”

Also commenting on the benefits, Jay Green, CFO of Accelerant, said: “We are looking to further develop relationships with institutional investors that we can partner with to support our growth. We’re growing at an exceptional rate and putting together a very attractive portfolio for investors in a part of the market that they don’t really have access to traditionally.”

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