CLIENT OVERVIEW
The insurer is a Fortune 500 company with operations in 12 states and Washington, D.C. The company was founded in 1925 with a mission to emphasize service excellence above all else. It sells auto, home, commercial, and life insurance through a network of 13,000 independent agents and has 6M+ policies in force.
BUSINESS CHALLENGE
The insurer faced several challenges: high costs from roofing-related claims, as well as adverse selection against competitors already using aerial imagery in their underwriting process.
The insurer also faced the risk of customer dissatisfaction due to claims denied because of poor maintenance. It also found that it was subsidizing policyholders filing preventable claims, leading to higher rates. To address these issues, the insurer decided to identify properties with the worst roofs to be remedied or to cancel/non-renew the policies.
SOLUTION OFFERED
With help from ValueMomentum, the team rolled out an AI-model-driven system built on AWS. This modular framework utilizes Amazon Location Service and other third-party data to procure aerial imagery and location data. AI models then run a batch analysis. Factoring in roof condition and confidence scores, the system identifies roofs in poor condition to be remedied or to cancel/non-renew the policy. Reports are run monthly.
The solution also includes a Mendix-hosted UI for the underwriting team to inspect severe conditions remotely, mitigating the need for on-site visits. The technology is completely cloud native, and the deployment process was automated through CI/CD, achieving scalability and easy adaptations of future models.
Value was immediately realized, not just in cost savings but also in establishing a standardized, modern technology stack that improved both underwriting precision and customer satisfaction.
VALUE DELIVERED
The integration of AI and aerial imagery in the insurer’s underwriting process is a technological triumph as well as a business case for thoughtful, cloud-native IT innovation aimed at critical industry challenges.
This endeavor resulted in immediate financial gains, with $3.5M saved annually — exceeding initial estimates of $2.5M. Moreover, the precise re-underwriting of 12,000 properties with poor roof conditions is projected to yield $22M, and identifying undocumented pools is expected to add another $5M in annual savings.
Beyond the financial metrics, the project has elevated the insurer’s competitive positioning in the market. As competitors were already leveraging similar technology, falling behind was not an option. The insurer’s modernization aligns it with industry best practices, effectively mitigating the risks of adverse selection, and premium losses.
Equally important is the boost in customer satisfaction. By proactively identifying maintenance issues, the company significantly reduces the instances of claim denials, thus improving the customer experience. This fusion of technology and strategy underscores that IT projects, at their core, are about enhancing the user experience for all stakeholders: customers, agents, brokers, and partners alike.
