Insurtech, short for insurance technology, is a fast-growing digital trend that applies technology innovation to insurance processes. As automation use accelerates in the property and casualty (P&C) insurance industry, insurance defense law firms will want to stay current on insurtech panel counsel news that can affect their client relationships and workflow management.
This article identifies several recent announcements that might be of interest to insurtech panel counsel members.
The Hartford is working with technology company Tractable to use artificial intelligence in analyzing U.S. auto insurance claims, according to a January 28, 2021 news release. The goal is to process claims as quickly as possible for policyholders. Tractable has raised $55 million in venture funding since its founding in 2015. It has processed over $1 billion in automotive claims for leading P&C insurers like Tokio Marine and others internationally. Tractable has been working with Mitchell International, a CCC competitor (below), since 2016. Mitchell provides automated software for claims involving collision repair and auto physical damage, auto casualty, workers’ compensation, and pharmacy filings.
Sompo International announced a long-term partnership with Flock, a UK insurtech company, in a January 21, 2021 news release. The partnership will focus on the insurance market for unmanned aviation uses, including drone cargo deliveries, flying taxi passenger flights, and drone swarm shows. Sompo International is a global specialty provider of property and casualty insurance and reinsurance. It was established in March 2017 as the result of the acquisition of Endurance Specialty Holdings Ltd. by Sompo Holdings Inc. Flock insures thousands of complex commercial operations globally, with support for all-electric vehicle fleets, medical delivery drones, and others.
LegalMation, a California-based artificial intelligence technology company developed by lawyers for lawyers, recently launched a Georgia version of its lawsuit analyzer for employment and torts cases. The AI software dynamically generates case-specific pleadings, discovery requests, responses, and related documents in as little as two minutes. The software is also available in California, Texas, Florida, New York, Pennsylvania, Illinois, Connecticut, New Jersey, and Massachusetts, according to CEO James Lee. We first wrote about LegalMation in 2018 in an article titled, “Walmart Panel Counsel Automates Filings.”
CCC Information Services Inc. recently announced a $7 billion public offering in conjunction with Dragoneer Growth Opportunities Corp. CCC processes 16 million auto damage claims annually, according to the company. Processing time has been reduced by up to six days, and appraiser productivity has increased by 25 percent. For first party and third-party claims, CCC analyzes more than 12 million medical bills annually. Read our related article, “Auto Panel Counsel Automation News.”
Metromile, Inc., a pay-per-mile car insurance company, is in the process of going public through a reverse merger with INSU Acquisition Corp. II, a publicly traded special purpose acquisition company. The transaction is expected to close in the first quarter of 2021. Coverage includes liability, vehicle and medical. Metromile is admitted in Washington, California, Oregon, Illinois, Arizona, Virginia, Pennsylvania, and New Jersey. The Metromile Enterprise division, a software-as-a-service business group, licenses the company’s proprietary artificial intelligence claims platform to automate claims, reduce fraud losses, and increase claims productivity.
Drone delivery of packages came a step closer with new Unmanned Aircraft (UA) regulations issued by the Federal Aviation Administration (FAA) on December 28, 2020 and scheduled to take effect within 60 days of publication in the Federal Register. The new rules will require Remote Identification (Remote ID) of drones. Operators of small drones will also be allowed to fly over people and at night under certain conditions. The long-awaited rulings are a step toward addressing security concerns as drones become integrated into U.S. airspace.
USAA and Google Cloud have been working together since 2019 to develop machine learning models that use digital images to automate vehicle damage estimates. Image analysis performed in the Google Cloud estimate damage and repair costs. Appraisers review the projections to finalize the process. The auto insurer is also using drones and related aerial photography for damage estimates in catastrophic losses.
Funding for insurtech deals in 2020 grew by 12 percent to $7.12 billion, according to Business Insider reports published on February 1, 2021.Funding levels related to 377 deals, up from 314 similar transactions in the previous year.
NAIC Insurtech Industry Oversight
The National Association of Insurance Commissioners (NAIC) formed an Innovation and Technology Task Force in 2017 to monitor insurtech technology, data collection and cybersecurity developments in the insurance industry. The NAIC is monitoring insurtech developments in several areas, including:
- Big data
- The Internet of Things (IoT)
- Mobile technology
- Artificial intelligence (AI)
- Wearable devices
Implications for Insurtech Panel Counsel
The good news is that money is pouring into the P&C insurance sector, both in the form of more industry participants and emerging technologies. The claims processing software is available to law firms as well as insurers, albeit at some risk of disintermediation. The bad news is that automation is speeding up claim resolution across big sectors of the market like auto property damage, workers’ compensation, and employment law.
Managing partners at insurance defense law firms will want to stay informed on insurtech matters. Understanding how insurance company clients are using insurtech technology may provide helpful insights into relevant actions the law firm can take to transition to a digital future.
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This article is provided for educational purposes only. It is not to be interpreted as legal advice or an opinion in regard to any topic discussed. Information covered is believed to be accurate but is not guaranteed.