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Transforming insurance risk and claims inspection

Complex property transactions include insurance inspections to evaluate risk assessment for the property being insured. Commercial property insurance is a complex process, which requires risk assessment on several aspects during underwriting and property rating. Insurance inspection and underwriting help insurers mitigate risks, handle hazards and raise red flags, improve the bottom line by enhancing accuracy of valuation and prevent over-insurance.

The explosion of data in recent times has transformed several industries, and insurance is no exception. The availability of data has improved evaluation and predictability of risk significantly. The ever-increasing use of cutting-edge technology such as Virtual Reality (VR), Augmented Reality (AR), IoT and cloud computing is transforming several aspects of the industry. In property insurance, immersive technology stands to make a major impact on site assessment, damage estimation and risk mitigation. These technologies are gamechangers for commercial property insurance and enable pre-underwriting, letting insurers evaluate and price every potential risk well ahead of time.

Challenges in property insurance

Risk and claims inspection in insurance face several challenges. The age-old industry finds it difficult to recruit millennials and attract new talent that is keen on working in technology and other new fields. In a field which is largely dominated by an ageing population, this also creates a shortage of experienced staff when it comes to inspections and underwriting. The COVID-19 pandemic made on-site inspections a challenge. There is also stiff competition with a huge number of players in the market. A digital world has created new customer expectations, and insurers need to employ state of the art infrastructure to be able to meet them.

Risk and claims inspection for large property, engineering and energy is often hazardous. Perilous sites and potential health hazards further compound the problems, and scarcity of resources is common if not the norm. This impacts accurate risk assessment. In this scenario, pre-underwriting using AR, VR and drones can bring about trailblazing changes in insurance risk assessment and claims processing, leading to better profitability.

Immersive technology paves the way for pre-underwriting

>With immersive technology coming into play, inspections can be carried out by staff with lesser experience. Overall, with the aid of these technologies, the accuracy of evaluation is much higher, and so is the predictability of risk. Using imagery and AI-based technologies, insurers may actually be able to understand the condition of buildings and predict what may happen, say 20 years down the road.

Property condition data is a very important component of underwriting; it correlates to business interruption and worker safety claims. A flawed understanding of property condition can occur due to various reasons: incorrect property risk information, incomplete identification of issues in commercial complexes, changes in tenancy, inability to keep track of the turnover, and manual errors. This can result in huge losses for insurers. Aerial imagery from drones can be used to evaluate external property condition, which is correlated with business interruption claims and worker safety claims.

Smart devices using IoT can be used to check fire safety, security, even electricals and plumbing going forward, and as we move toward a smarter and connected world, data can be collected unobtrusively. Data integrated from various sensors can predict environmental effects on buildings and properties, giving insurers a holistic perspective when it comes to property evaluation.

AR can also be used for damage estimation, by using images of objects before and after an incident. Inspectors can view images of hard-to-reach areas such as gas pipelines or possible sources of fire, without having to actually be physically present.

Automation helps to identify inadmissible and fraudulent submissions, and eventually move towards risk mitigation, resulting in a healthier relationship with customers. Pre-underwriting in property insurance flags a smoother underwriting process with improved agility and hyper-productivity.* Automation and predictive analytics using AI and ML-based software gives insurance companies the competitive edge, freeing up their underwriters for more complex judgement calls. 

As insurance companies embark on the digital transformation journey, they can tap into valuable historical data and take advantage of the vast amounts of real-time data by leveraging cutting-edge technology to rejig traditional business processes and emerge with new business models that give them competitive advantage.

*For organisations on the digital transformation journey, agility is key in responding to a rapidly changing technology and business landscape. Now more than ever, it is crucial to deliver and exceed organisational expectations with a robust digital mindset backed by innovation. Enabling businesses to sense, learn, respond, and evolve like a living organism, will be imperative for business excellence going forward. A comprehensive, yet modular suite of services is doing exactly that. Equipping organisations with intuitive decision-making automatically at scale, actionable insights based on real-time solutions, anytime/anywhere experience, and in-depth data visibility across functions leading to hyper-productivity, Live Enterprise is building connected organisations that are innovating collaboratively for the future.