A new company, using Artificial Intelligence (AI) to more accurately assess risk, claims it could help to save the UK commercial property insurance sector over UK£500 million (€576 million) per year in lost revenue.
Intelligent AI has been backed by the Government through funding from Innovate UK to help solve the problem, developing an online Intelligent Risk platform that draws in some 300 data points ranging from real-time weather and flood risks to crime rates and fire service response times.
The founder and CEO of Intelligent AI, Anthony Peake, says a major shift is needed in the market. “We need to move away from a system based on incomplete and historic data, which is failing to accurately define levels of risk in the marketplace. Having real-time, accurate data on risks, and risk mitigation, provides actionable insights that could ultimately help to prevent catastrophic incidents like Grenfell Tower.
“The use of AI can help save the commercial property sector over £500m (€575.05m) per year by delivering 360 degree real time insight. At the same time, the customer will benefit from mitigated health and safety risks, lower premiums and greater business continuity,” he adds.
Losses on commercial property portfolios are common across the sector. Lloyd‘s property insurance lost £2.6bn (€2.99bn) between 2016 and 2019, driven by increases in man-made and natural hazard losses. And with only 5-10% of insured properties typically visited by risk engineers in the UK each year, improving quality of analytical data is a priority.
Peake explains, “A typical insurer is able to send risk engineers to about 5% 10% of insured locations representing 20% 25% of the risk exposure. A huge proportion of insured properties are not visited, and the statistical models used to predict the risks in the 90% of unseen locations are, inevitably, more prone to error which is leading to large, unexpected losses and unknown exposure.
“Where risk engineers do visit customer sites, this is likely only once every 3-4 years, with inconsistent risk descriptions and differing layouts making it hard for underwriters and clients to consume, analyse, and action. It means only around one in seven identified risk improvements are actually being resolved by larger clients.”
AI and the abundance of data sources can transform the approach, with accurate assessment and improved mitigation of risk leading to fairer premiums.
Peake says, “In the last few years we have seen the move from a soft market, where insurers were competing heavily with each other and so customers gained from lower premiums and lax risk management, into the current hard market, where insurers are rejecting policies if the risks are higher or not well understood. In many markets, this has resulted in a 30% 50% increase in premiums.”
Drawing on data from satellite image analysis, real time IoT meters, open data and proprietary algorithms, pilot projects are now underway with insurers and corporate organisations in the UK and US.
The firm is also rolling out its Digital Twins of Risk AI programme, which provides risk profiles of all properties across a portfolio, not just those visited by risk engineers. A pilot study building 20,000 digital twins of properties ranging from port authorities to wind turbine sites is underway.
“Digital Twins are already demonstrating far more accuracy than statistical models to predict the risk across the 90% of properties not seen by risk engineers,” adds Peake.
With another £400,000 (€461,000) of seed funding recently secured through RLC Ventures, FomCap and a number of angel investors, and supported through the process by legal firm Michelmores, Intelligent AI has rolled out a suite of AI-backed tools.
These include its AI Risk Report Analyser, which automatically turns lengthy unstructured risk reports into real-time dashboards to accelerate risk mitigations programmed, “Intelligent AI focuses on helping the insurance ecosystem understand risk better, make insight-led decisions and do so in a timely and efficient manner. The need for this digital-led transformation is significant and urgent, and Intelligent AI is at the forefront in being able to provide immediate value to insurers, clients, brokers and consulting companies.”
Intelligent AI has been working with Digital Catapult, The Alan Turing Institute in London and University of Exeter, and was also selected for the Lloyd’s Lab insurtech incubator programme.
Ed Gaze, who runs Lloyd’s Lab, says, “I was really impressed with the way they worked, and the progress we made through the ten week programme.”
“It was clear that the team has a lot of experience working with the Lloyd’s market, and knew what they were talking about. They worked seamlessly with their mentors and consortium partners, and I’m excited to see what they achieve over the next couple of years.”
Intelligent AI is also part of a new UK thought leadership consortium operating in the insurance space, Sense, helping to generate debate, educate and progress innovations that reduce the total cost of risk to all in the commercial property sector, through better use of data.
Sense includes representatives from Lloyds of London, Zurich Insurance, Munich RE, EY, and is part of the Camelot Network. It officially launches with a live digital event on April 29
Intelligent AI has now launched a survey with Sense to better understand the needs of commercial property owners and insurers, when it comes to real-time data and risk management, to inform the development and delivery of data and real-time data systems. To take the survey go to.
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Based on an analysis of over 10,000 risk mitigations, carried out by Intelligent AI Limited in 2020
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