Massive amounts of claims, underwriting data are awaiting AI

The latest Voice of Insurance podcast features the founding chief executive of Dale Underwriting Partners, Duncan Dale, discussing the state of the market for a maturing Lloyd’s business, and the role of AI in driving better decisions by unlocking huge amounts of currently useless data.

Fresh from a takeover by blue-chip private equity investor CVC, boasting a sub-90 percent combined ratio, and $450m in capacity for 2024, Dale Underwriting is a maturing Lloyd’s market insurer and MGA in its eleventh year of trading.

Duncan Dale was Mark Geoghegan’s latest guest on the most recent episode of the Voice of Insurance podcast.

The conversation is a dissection of the state of the market, currently enjoying strong profitability. Dale described Dale’s Lloyd’s market position as having “plenty of headroom” for growth.

The underwriting side needs to “keep its profits”, he suggested, holding the line on market discipline, making hay while the sun shines.

“The messaging is very positive at the moment, in terms of demand being there,” Dale said.

“We’re only able to meet the demands and be a sustainable source of risk transfer if we are profitable for our capital providers. Whilst the market is enjoying good returns at the moment…there are reasons why that does need to continue, and not be a peak that everyone falls away from.”

The Lloyd’s market, renowned for its fondness for tradition, is on the cusp of big changes towards digital transformation, and Dale emphasised the need for core processes in the market to be updated in the name of efficiency.

“If we benefit from additional efficiency from those things, then I think that’s all good,” he said.

I’m referring there to the subscription market infrastructure, digitalisation projects, Blueprint Two – you can’t argue against it. We’d love to see expense savings; we’d love to see data that means something; we’d like to get rid of wasted data that doesn’t tell us anything,” said Dale.

On artificial intelligence (AI), he described Dale as “interested observers” of the potential of AI initiatives taking place around the market towards making better use of existing or new data.

“Anyone that knows us would not be surprised, that we’re not going to be leaping to allowing that to make strategic decisions for our business,” he continued.

“But can it help challenge those decisions and bring a level of sophistication that will move the dial, in terms of individual risks, right through to portfolio optimisation and broader strategies.”

AI will enhance decision-making in claims handling, as well as underwriting, he suggested.

“You think about how much information is stored in this market in claims files,” Dale said.

“A huge amount of information that would tell us a lot about the qualitative factors of how to best handle the claims most efficiently and get the funds in the right place,” he continued.

“Just think about how many millions of pages of claims reports we’ve got sat in files that don’t tell us anything, that we can’t garner any information out of. And now we can,” he added.