Data, said CRC Group CEO Dave Obenauer, is a more critical part of insurance than ever, with artificial intelligence leading to greater client coverage outcomes.
Speaking recently at Zywave’s Casualty Insights Conference in New York, Obenauer said the casualty market is facing an unpredictable risk landscape, although rates have moderated. Insurers have recently reported improved profitability, but underlying loss trends tied to large settlements and social inflation – sometimes driven by third-party litigation funding or the lack of tort reform – continue to keep carriers cautious, he said.
“We think our role is to be sure that, while rates are somewhat moderating, we’ve got good line of sight to coverages folks [need],” said Obenauer said. “In my view, it’s less about the premium. It’s more about the coverage.”
A premium deal for the insured means little if coverage components are missed, he added. So the focus of CRC, an independent wholesale specialty insurance distributor, is its “ability to understand through data what the right coverages are for the right type of insured in the right geography and industry.”
“If anything goes wrong on that front, no matter how much you save on premium, it obviously doesn’t matter,” he added. “We cannot effectively anticipate what’s next and how to plan for it without really good data on the underlying exposures and trends.”
CRC is “investing heavily” in data access and AI, which has been a learning process with the help of partnering with various vendors.
“We’re all learning, but there’s no one anywhere that truly knows where this is all headed.” Obenauer said. He added a story about how CRC is using AI to transform routine processes such as email. An account can be cleared automatically, data can be captured that hadn’t before, and professionals can start finding the best insurers for the risks presented based on coverage needs. By using AI for this mundane task, “the power that will unlock in our company will be tremendous,” the executive added.
The new opportunities to increase efficiency come at an especially interesting time when the excess and surplus market is expanding to meet coverage demands of tough risks. Once viewed largely as a market of last resort, the E&S sector now accounts for roughly one-quarter of U.S. commercial P/C premiums, said Obenauer.
“The economy, society, has really put us in a place where our solutions are more and more needed, and our goal is to deliver those in a way that’s most efficient, effective, and speaks to the needs of clients,” Obenauer said.
The casualty marketplace is “recalibrating, not softening,” he continued. From a capacity standpoint, the industry is in a good spot with it flowing from several different sources. Capacity has become a “global investment opportunity,” not limited to carriers.
However, coverage has narrowed in certain classes while exposures have increased. Limits and capacity are being deployed differently, but according to Obenauer, the moderating rate environment “is a great opportunity for ultimate clients, retail brokers and ourselves to assess cash programs and see where in fact did coverage slip away over the last few years that can be built back into the solution so that we have more complete coverage.”
Topics
Casualty
Interested in Casualty?
Get automatic alerts for this topic.
