Radical reform afoot in commercial insurance review process

RiskGenius plans to go live next month launching an innovative tool that will reduce the policy review process for commercial insurance policies from days to minutes. Using machine learning, RiskGenius' algorithms organise the policy content into relevant categories producing an easy to read structured report. The system enables the reviewer to compare pre-existing policies versus others to identify gaps in cover and any other weaknesses in policy conditions, speeding up the process while improving consistency and accuracy.

In the world of commercial insurance, brokers and agents are reviewing policy agreements in their evenings and at weekends. These contract reviews are consuming masses of labor, are time consuming and open to error. This isn’t a small cost to the industry either. The 150 largest Independent Agents alone employ around 500,000 people with half of them in admin roles. There has to be a tech solution to this…let me introduce you to Risk Genius – the Google of insurance policies!

The issue is this. Insurance professionals across the world are struggling with contract reviews. And this inefficient process is impacting underwriters, agents, and brokers alike.

The industry is full of anecdotes of professionals reviewing contracts at the weekend whilst they’re “watching” their kids at soccer school. Or of agents reviewing contracts for customers in their travel time between workplaces. And of product underwriters who simply do not have the time to review all of the contracts they are sent.

Let me put this into context with a simple Use Case.

Today, commercial insurance brokers and agents need to review insurance policy agreements when advising clients on their insurance requirements. They do this by comparing different policy agreements and documenting the comparisons in a ‘like for like’ format in a spreadsheet format.

This is a manual review process. The agent or broker often does this as a side task, out of office hours, at home in the evenings or the weekend.

And here’s the rub. It’s a thankless task that is time consuming, repetitive, and open to human error. It also relies heavily on human decision-making in less than perfect circumstances. This is cause for concern for insurers from the associated risk and exposure of giving bad advice based on a poor contract review process.

This is where RiskGenius comes in.

To tell me how they plan to transform the commercial P&C industry, I Skyped with co-founder and CEO, Chris Cheatham. Better known on social media as the ‘Dr Dre of the Insurance Industry”, Chris is an attorney by trade with a love of rap music, science fiction and machine learning technology. Chris has already established a successful startup in ClaimKit, a collaboration platform for claims management in the surety, insurance and legal space.

Over the course of an hour, Chris explained to me how he and his co-founder, Dan Burchett designed and built a platform that applies machine learning to the review process for commercial insurance policies.

“Its been a tough nut to crack and taken a lot of hard work and effort”, according to Chris, who gives all the credit for the technology solution to Dan, who’s more Tony Stark than your typical CTO.

“What we do is take an insurance policy and load it up onto the RiskGenius platform. First, it is analyzed and indexed, which takes a minute or two. We’ve written algorithms that can break down and understand an insurance policy. And, just like Google, RiskGenius will look at the content, organize it and make sense of it. We use the algorithms to categorize and structure the content of the policy documents so that they can be reviewed. The output is a simple to understand and review policy, and the user can export out results in a spreadsheet format.

“We’re going through the same process as the agents. It’s just that RiskGenius is reading the text faster and applying more rules using machine learning technology.”

The purpose of RiskGenius is really clear. This is a solution that benefits the Insurance agencies.

As Chris told me, “a key challenge for insurance agents is sales. How do they go get business in a competitive marketplace? RiskGenius is their best tool for fixing this. First, we take the pre-existing policy. By reviewing it with others, the agent can see the gaps in the cover and the weaknesses in the policy conditions. Now, the agent can explain these gaps and help the commercial client to get the right cover for their commercial business. Up until now, this has been time consuming. But with RiskGenius, the sales agent can process the policy very quickly and then go and explain any shortcomings.”

And this is not the end of it, because once a contract has been indexed and cataloged then the fun starts. Now agencies and brokers can start to build libraries of policy agreements across their client base and within the firm. It is common for many variations in policy wording for the same terms and conditions. These are often unnoticed and hard to review in their entirety across the firm. With RiskGenius, agents can comment on and review multiple variations of similar clauses with clients and with the agency to establish the most favorable for all parties.

RiskGenius is about to go live in February and this week they secured $1.8 million in series A fund raising from lead investor Flyover Capital (reported here on Startland News, Kansas City’s Home for Innovation News).

The approach they take will significantly increase the speed, consistency and accuracy of the contract review process.

Quite simply, RiskGenius are using technology as an alternative to hard labor and in so doing; they reduce the contract review process completion time from days to minutes.

As Chris says, “Can you imagine why anyone would manually review contracts in 5 years time?”

By Rick Huckstep