Baron’s risk team creates breakthrough GenAI to analyse GP wordings and close gaps
Service providers extol virtue of regulatory databases and claims protocol
The risk management team at risk International SOS, headed by Franck Baron, have developed a GenAI tool that helps analyse insurance wordings across 94 countries in the company’s global programme and close gaps in cover or limits.
Announcing the initiative at Commercial Risk’s Global Programmes Europe conference in London, Baron encouraged other risk managers to grab the nettle and follow suit.
“The technology is here, it’s affordable, and it’s available. You don’t need a huge risk management information system; GenAI can help you right now,” he said.
Baron explained that the insurance policy management system produced by International SOS can handle a lot of global and local policies across the word. He said GenAI is helping his team analyse around 1,500 insurance policies across the 94 countries.
“Thanks to GenAI, we can now automate most of the tasks needed to analyse the insurance wordings of these policies. For example, it can quickly tell me the sublimits of natural catastrophe coverage across South America, so I can benchmark that against my insured operations. It also helps compare local policies with master programs to spot any coverage or limit gaps,” said Baron, who is president of the International Federation of Risk & Insurance Management Associations (Ifrima) and board member of the Pan Asia Risk & Insurance Management Association (Parima).
“The system automates the process of getting the info we need, giving risk managers more time to focus on solving these issues. We know managing a global programme with local policies is tough, especially with carriers pulling out of certain markets and relying too much on local partners who might not meet our standards. This solution helps with that problem,” he added.
Baron said that his team started developing the system as soon as it saw what GenAI could do and had a proof of concept ready in four months. It is now in the process of rolling out the tool across all of its insurance contacts, including both local master polices and master programmes.
This is undoubtedly a hugely interesting development in the commercial insurance world and early proof that AI is likely to be revolutionary. It looks to be an important step in the battle to avoid gaps in global insurance coverage.
Another battle is delivering compliant cover, and this task is not getting any easier. In fact, many expect things to get more complicated if the world continues to move away from the post-World War II global order.
Dawn Miller, commercial director at Lloyd’s and CEO of Lloyd’s Americas, believes insurance regulations around the world are going to increase in the face of protectionism. It will be increasingly important to pick an insurance partner that can stay ahead of the game, she said.
“The overarching theme here is that regulations are only going to become more complex. There is a reason why there are not that many markets that offer strong and compliant – compliant being the main word – multinational programmes because it is very challenging to keep up with the regulations. So you want to make sure those you are working with have that regulatory knowledge and database, as well as the smart tools, to understand these risks, because it is only going to get harder,” she said.
Brian Grabek, executive vice-president of multinational insurance at Sompo, agreed that staying on top of the rules and regulations is vital for insurers on behalf of their customers.
“Part of what we do is advise clients on regulatory changes and what they are facing in any new territories they are entering… The tools we have today, from web scraping to even AI tools, which we are testing to keep us on top of those regulatory changes in 100 or 200 countries, are really important for us and our clients,” he added.
Earlier on in the day, David Filippini, vice-president of international at CNA, stressed the importance of having a global claims coordinator to bring everything together when complicated claims hit under a multinational programme.
“You have non-admitted insurance and a master programme and the local underwriters, so the importance of having our global claims coordinator that ties all this together is important because it can be multiple policies in multiple countries responding,” he said.
Linden Farley, claims relationship manager at QBE Europe, said there are several key steps to managing a successful multinational claim.
The first is working with brokers, customers and claims servicing to agree how claims are going to be managed. “This is really important. It needs to be fully compliant. Early engagement and planning ahead is really important so everybody knows at the inception of a policy how claims are going to work. If we leave it until a claim occurs, we are probably not going to get the best outcome,” he said.
The second key point is setting client expectation around claims servicing. “Where and how will the claim be paid? Does the programme structure meet the client’s desire for claims payment? We need to understand the mix of local policies and where cover is under a master policy,” he said.
The other important area is looking at what the claims experience might look like at a particular insured to tailor the service.
“We can look at what type of claim the client is having. Do we need to prepare for a higher volume with lots of claims in one particular country? Or are we looking at low volume with potentially major loss where we need to think about loss scenario planning?” he said.
The Global Programmes Europe event was partnered by Marsh, Zurich Insurance, AIG, Lloyd’s, QBE, Sompo, CNA, Crawford, DAC Beachcroft, Descartes, HDI, TMF Group, Wilson Elser, Swiss Re Corporate Solutions and WTW. It was held in association with Airmic, the IRM and the LMG.