Digital Overhaul in Insurance Benefits Firms Already Confident Using AI

In the artificial intelligence (AI) race, some companies, and sectors, are starting on third base.

That’s because companies operating in technologically sophisticated sectors with deep libraries of operating data frequently already have the infrastructure, the employee talent and resource allotment framework in place to leverage the innovations most effectively and faster than the rest of the market.

The insurance industry is one of those sectors.

After all, InsurTech startups and incumbents alike are no stranger to either AI or digital transformation.

And that familiarity is paying off.

Githesh Ramamurthy, chairman and CEO of CCC Intelligent Solutions, told investors on the company’s Wednesday’s (Feb. 28) fourth quarter and full fiscal year 2023 earnings call that there has been a “significant change” in the “accelerating demand for AI solutions” from CCC’s customers and clients.

Automating away highly manual paper-based processes, reducing cycle times, and minimizing administrative loss are all key opportunity areas within insurance.

Earlier this month (Feb. 15), Michael Boeke, VP of payment product management enterprise at CCC, told PYMNTS that the trillion-dollar property and casualty economy needs to continue its digital overhaul.

Echoing that sentiment, executives on the call highlighted CCC’s ability during the fiscal year 2023 to process a record number of U.S. auto insurance claims using AI-enabled solutions, emphasizing the company’s commitment to innovation and operational excellence around integrating AI into existing workflows.

“Like every other solution we deliver, AI solutions also have to deliver ROI,” Ramamurthy added. “But customers continue to be more and more interested … and the scale of the feedback loop and the quality of the data has allowed us to improve quality substantially.”

See also: ‘Intelligent Automation’ Helps Insurers Streamline Auto Claims Payouts

Streamlining the Payouts Experience

CCC’s platform leverages cloud, mobile, AI, telematics and hyperscale technologies to connect various stakeholders within the property and casualty insurance sector and support digital workflows.

Per the company’s materials, over 19 million unique claims have been processed using a CCC AI-enabled solution.

In 2023 CCC processed the highest number of U.S. auto insurance claims in its history — and executives noted that those claims are benefiting from the AI solutions CCC deploys to help clients make better decisions faster. The company doubled the number of insurers using its AI-based CCC Estimate-STP to process claims over the past year.

CCC leadership also highlighted the debut of Mobile Jumpstart, a new AI-driven feature within CCC ONE Estimating-IQ that helps estimators use their mobile phones to reduce the time it takes to prepare estimates. Since its introduction in late Q4, more than 3,000 repair facilities have used Mobile Jumpstart to transform the way repair technicians prepare estimates in the capacity-constrained collision repair industry.

Per the company’s earnings, in January 2024, Mobile Jumpstart users were able to complete an initial estimate in an average time of less than two minutes vs. the traditional industry average of about half an hour.

Read more: Smart Digital Payments Bring Consumer-Like Experience to Auto Repairs and Insurance Claims Payouts

The company’s results outperformed analyst revenue estimates.

Total revenue for CCC was $228.6 million for the fourth quarter of 2023, an increase of 12% from $204.1 million for the fourth quarter of 2022.

For the full year of 2023, total revenue was $866.4 million for the full year of 2023, an increase of 11% from the full year of 2022.

“CCC delivered another year of strong financial performance, with year-over-year revenue growth in 2023 of 11% and adjusted EBITDA margin of 41% — both above our guidance ranges. We believe our strong performance is the result of a growing interest in advanced digital solutions across the P&C insurance economy and the trust our customers place in us from years of delivering innovation and operational performance,” Ramamurthy said.

The company generated $250 million in cash from operating activities and had free cash flow of $195 million during the full year of 2023, compared with $199.9 million generated in cash from operating activities and $152 million in free cash flow in the full year of 2022.

Executives explained to investors during the Q&A session that payments growth is “slower” than the rest of CCC’s product mix, while noting that, “many of the pain points we saw with payments in the claims process have not been solved — the problem and the complexity are there.”

Ramamurthy also noted, regarding AI, that “companies are turning their attention to the retirement of their workforce. They expect one-third to one-half of their most experienced workers to retire by end of the decade. … Leading to a loss of their knowledge base and a less engaged workforce with higher turnover.”

“Customers need help closing the skill gap with new and existing workers … driving interest in adoption in AI solutions,” he added.

David Evans explored that very phenomenon in September for PYMNTS, in a piece entitled “The Demographic Debacle Meets the AI Miracle.”