While the hype surrounding GenAI's promise is loud and contagious, Richard Kerr believes CEOs should take lessons from the dot-com era and keep their feet on the ground when it comes to new technology. As the founder of MarketScout, one of the insurance industry's first pure business dot coms, Kerr remembers the madness of the fin de siècle.
“We had 322 participants from the beginning,” he says. “There was a euphoria going on, just like with AI today. But of the 322 companies that were founded then, only two remain today.”
MarketScout was one of the few success stories. In 2022, Carr sold the company to Novatae Risk Group, which he currently leads as CEO. That early experience with a cautious approach guides his AI strategy today. “These new innovations and technologies are by no means miracle cures. They are great tools that support and encourage innovation and allow us to move forward and create new products and new ideas.” he says. “But at the end of the day, you have to sell something and make a profit.”
Use technology wisely
As Kerr was quick to add, AI will help Novatae do it faster, better and cheaper in a competitive market. He notes that AI's ability to process and analyze vast amounts of data has made it an essential tool for tasks such as fraud detection, underwriting, and predictive analytics. “Insurance is really just a piece of paper selling you a promise that you'll be covered in the event of a disaster,” Kerr said. “The difference today is that AI allows us to do more with data.”
For example, if you insure a building in an area prone to severe weather, Novatae can use AI to analyze datasets that predict the likelihood of events such as hailstorms, allowing you to more accurately price your insurance policy. You will be able to do it. “That didn't happen 10 years ago,” Kerr says.
Another example: In underwriting, AI-powered data analytics helps Kerr's team assess risk in real time. “Analyzing property data to determine whether and how to insure something that used to take insurance companies two days now takes 60 seconds.” says Carr. Using AI models, Novatae can quickly process large data sets to calculate risk and determine premiums, significantly reducing manual underwriting and pricing.
Kerr's approach is not limited to internal operations. We are also transforming the customer experience. AI can help simplify complex insurance quotes by making policy comparisons easier to understand for both agents and consumers. “If you're not an insurance professional, you get two quotes and you don't know the difference between them,” Kerr says. Using AI, his customers can upload two insurance quotes and immediately receive a clear comparison of the coverage and coverage of each policy, to put it simply. This streamlines the customer decision-making process and ensures that customers are well-informed, a win-win for both consumers and insurers.
Novatae has also been able to use its marketing dollars more efficiently. “AI-powered marketing strategies allow you to focus your marketing efforts on delivering information to people who are interested and responsive,” Kerr said, adding that interactive marketing, a staple of the digital age, He added that it is now more effective. This is thanks to AI’s ability to process and predict consumer behavior. This will enable Novatae to more effectively engage with potential customers and provide customized solutions based on insights generated from vast datasets.
Develop in-house expertise
While recognizing the huge potential of AI, many CEOs remain wary of its reliability, especially when it comes to data accuracy. Kerr's policy is not to share the different AI engines used by Novatae, but he said Novatae's approach includes cross-referencing data across multiple models to identify discrepancies. . “You can literally pit different models against each other,” Kerr explains. “And as with any source of information, you can't just assume that all the information you get from it is spot on. They are more likely to be right on target than the research analysts you paid to do the research.”
What every company really needs right now is “a human being who is an expert at using this tool,” Kerr said, adding that while the data is out there, there's so much data that it's “drinking from a firehose.” ”, he added. The biggest challenge is taking the time necessary to determine the best direction for your AI investment. “I wish I could find a team of five people who would spend all day every day trying to figure out how to get the most out of AI, because it would probably be well worth it. “I'm doing other things,” he says. “But frankly, that's my job: to figure out where it's worth spending my time and money.” Currently, Novatae is developing a revolutionary new platform, expected to be released next year. But Carr believes it will be a “pretty significant change in how consumers buy insurance, from homeowners to commercial insurance.”
Of course, he acknowledges that experiments don't always work, and that innovation always involves risk. That's why it's also the CEO's job to make the tough decision to pull the plug if a particular direction isn't working. “This is more art than science, and frankly, we're paid to do it. CEOs need to have an intuitive sense of when it's time to move on. It's like the quarterback throws five interception passes and it's time for him to leave and they're like, “No, this is the way to go. ” This is difficult. we must continue. 'And sometimes it's hard to just keep going, and sometimes it's not,'' Kerr says. “But it’s experience, it’s knowledge, and the reason you put someone in that chair as a CEO is so they can read it and feel it. In this way, the CEO’s job is taken over by AI. I know it's not going to be replaced, because you can't go into the AI world and say, “I spent $10 million on this, should I quit?'' That's not something a bot can do for you.
“And when can you do that?” he jokes. “Then I think I'm in trouble.”
For CEOs still in the starting gate, Kerr offers three recommendations:
• Don't stay on the fence. “Take your time and study,” he says. Experimenting with AI tools and understanding their capabilities can help CEOs determine which applications will contribute the most to revenue. “Find some AI modules and get in there and try out the technology.”
• Use multiple AI models. To maximize AI's potential and its accuracy, companies should cross-check their data using multiple AI models. This approach helps you identify discrepancies and ensure that information is reliable before making important decisions. “We've used them all and assimilated them so that we can get the best that each one has to offer, because each one is better in certain ways.”
• There is a path to monetization.. “So, we're trying to do all these really cool things, but if we do it, are we going to save X amount of dollars and make it into the bottom line, or are we going to generate additional revenue? Most importantly. It’s about getting it done.”
