{{indexingdisabled}} Best's Review - November 2024 Edition - Issues and Answers and Artificial Intelligence

Contents

  1. Cover
  2. Editors Desk: Reciprocal Insurance Exchanges and Florida
  3. Contents: Risk Frontier and Cayman Islands
  4. Bests Calendar and Executive Changes
  5. Executive Changes: Appointments and Hiring
  6. Executive Changes and Web Traffic
  7. Masthead Forestay and Issues and Answers
  8. Issues and Answers and Workers Compensation
  9. Issues and Answers and Artificial Intelligence
  10. Workers Comp Regulatory Trends
  11. Bests Rankings Workers Compensation and Asset Distribution
  12. Bests Rankings Life Health Investment Returns
  13. Risk Frontier and Insurtech Playbook
  14. Technology Incubators and Insurance Industry Integration
  15. Artificial Intelligence and Insurance Tech Evolution
  16. Internet of Things and Innovation and Data
  17. Evolutionary Tech and Artificial Intelligence
  18. Small Language Models and Technology Talent
  19. Reciprocals: Insurance Exchanges and Florida
  20. Reciprocals Launched and Florida Takeouts
  21. Reciprocals and Florida Homeowners Market
  22. Bests Rankings: US Homeowners Multiperil Writers
  23. Flood Insurance: Private Market and Climate Uncertainty
  24. Flood Insurance and Life Insurance
  25. Life Insurance: Excess Mortality and COVID
  26. Cayman Islands: Wealth Transfer and Life and Annuity
  27. Cayman Islands and Insurance and Reinsurance
  28. What AM Best Says: Workers Compensation and Profitability
  29. What AM Best Says and Underwriting and Loss Control
  30. Underwriting and Loss Control and State Rate Filings
  31. State Rate Filings and Cyber Identity Theft
  32. Bookstore and Preferred Podcasters
  33. Preferred Podcasters and Preferred Publishers
  34. Trending Bests News and Trending Bests Research
  35. AM Best Webinars and AM Best TV and Audio
  36. Bests Credit Rating Actions: Americas Life Health and Property Casualty
  37. Bests Credit Rating Actions: Americas PC and Europe Middle East and Africa
  38. Bests Credit Rating Actions: Financial Strength Ratings and Issuer Credit Ratings
  39. Corporate Changes: Mergers and Acquisitions and State Actions
  40. Insurance Professional Resources and Energy Production Injury Litigation
  41. Industry Updates and Masthead Backstay
  42. Artificial Intelligence: Reciprocal Insurance Exchanges Benefits
  43. Back Cover
 
14-15 14-15
As a leader in risk mitigation, Nationwide® has
the expertise and tools to help your clients
prevent disruptions or loss.
Innovative technologies like sensors help

Award-winning telematics promote safe
driving. Customizable loss control
programs protect employees and assets.
Nationwide is uniquely positioned to keep the
businesses and people you work with secure.
Learn more at nationwide.com/specializedprotection
E&S and Specialty | Farm & Agribusiness | Commercial Lines | Personal Lines
http://nationwide.com/specializedprotection
SPECIAL ADVERTISING SECTION
SPECIAL ADVERTISING SECTION
Issues & Answers: Workers’ Compensation
Workers’ Comp Technology
Phillip Maddox, a Workers’ Compensation Senior
Consultant with Nationwide, highlighted the
company’s long history of success with workers’
compensation, emphasizing the importance
of embracing technology. “As we advance in
the workers’ comp space, we will continue to
evaluate and integrate technological advances
that benefit our customers and our role in the
insurance industry,” he said. Following are
excerpts from an interview.
What issues do you see that may impact the continued
success of the workers’ comp line?
The workers’ comp market has maintained positive results for
over a decade in part due to improved workplace safety controls
and claims management that have kept loss frequency relatively
flat. However, in the middle- and small-market sectors, we see
margins compressing due to increasing loss severity trends.
Issues such as an aging workforce, comorbidities, impaired
workers, and medical inflation are putting pressures on loss
severity for the line. This means that risk management and loss
mitigation will be critical to profitable workers’ comp growth.
What role does technology play in supporting workers’
comp risk management?
Being successful in the workers’ compensation space requires not
only understanding the challenges of the workers’ comp line and
what is driving losses, but also offering solutions at the job site and
plant level to manage those risks and then being able to quickly
pivot to bring those solutions into play. Technology is a key part
of that. Technology brings speed and accuracy to the critical first
steps of the risk management process: the identification of loss
exposures and the analysis of complex data. It improves our ability
to predict and prevent, but technology does not always offer a
solution. Nationwide combines the benefits that technology offers
with the workers’ comp experience of our associates to help bring
about effective solutions for our business partners.
Do you have an example of using technology to help
“predict and prevent” in the workers’ comp space?
Yes, our use of computer vision and AI technology to conduct
workplace ergonomic assessments lets us do in minutes what used
to take hours. With computer vision, we can capture the needed
data of a construction, manufacturing, retail or service task without
disrupting the job. With the speed of AI, we can quickly quantify
which task elements present the greatest ergonomic risk for injury.
Phillip Maddox
Workers’ Compensation Senior Consultant
Nationwide
“We aren’t looking
to be everything
to everybody, but
we are leveraging
technology with
our expertise to be
the best workers’
compensation
solution for our
customers in those
areas where we
choose to compete.”
Visit the Issues & Answers section at
bestsreview.ambest.com
to
watch an interview with Phillip Maddox.
This allows us to combine our risk management expertise with input
from our members to find the best solutions for reducing risks and
objectively measure the impact of those changes.
What challenges are there in keeping pace with
constantly evolving technology?
It’s easy to get over-focused on the bells and whistles of new
technology and lose sight of the end goal, which is using the
capabilities that technology offers to support our abilities to
predict, prevent and solve. It’s critical to support and evaluate new
technologies that come along—such as our resource for impairment
testing that uses cognitive-based gamification to identify a work-
ready state—but we also continue to use existing technologies to
their fullest. One example of this is our virtual visit capabilities that
utilize mobile device technology to provide live consultative support
via our risk management team. We were able to use this rapid
response capability to quickly align our best resources to address
the industrial hygiene service needs of a commercial client and bring
about a solution to prevent loss.
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SPECIAL ADVERTISING SECTION
SPECIAL ADVERTISING SECTION
Issues & Answers: Artificial Intelligence
Enhancing Claims With AI
Marc Rothchild, SVP and Head of Claims at
Xceedance, explained that his team is fully
equipped to understand the guiding principles
of artificial intelligence. “We are well prepared to
navigate the potential ramifications, especially
since claims are handled within a highly regulated
environment,” he said. Below are excerpts from
the interview.
What are some best practices when managing a surge
in claims after a cat event?
Certainly, there’s much you can do to prepare in advance of a storm.
This includes proactively sending out communications, ensuring
policyholders know how to submit their loss, and, most importantly,
confirming that they are in a safe place. In terms of team readiness,
you may need to ramp up staffing, relocate resources, and have
the necessary technology in place to respond effectively. There
are now various channels to capture losses, beyond the traditional
phone call. Once claims start coming in, it’s crucial that adjusters
work as efficiently as possible. Several technological solutions can
help balance these surging caseloads.
How will AI reshape the future of claims?
A few key areas where we see AI making an impact include the
first notice of loss and the claim intake process. This could involve
utilizing chatbots or other technologies that capture information
from submitted losses. Since claims often come in through
different channels and formats, they may not always be as clean
as a standard claim form. Additionally, AI can support adjusters
throughout the claim’s life cycle. Basic inquiries, such as a customer
wanting to know the status of their claim, can be handled through
AI-related technologies, improving efficiency.
What challenges do insurers face when adopting AI in
their claims process?
One of the biggest challenges is understanding what’s acceptable
from both a regulatory and client perspective. Insurers deal
with a diverse range of clients, whether it’s an individual insuring
their home or auto, a small business, or a large corporation
with multiple policies. Each of these stakeholders has different
expectations and levels of familiarity with the claims process. It’s
vital to consider all these factors during the design, testing, and
implementation of AI solutions.
Marc Rothchild
SVP and Head of Claims
Xceedance
“At the end of the
day, it’s crucial that
your adjusters are
available to offer
both guidance and
empathy to the
claimants who need
it most, whether it’s
a homeowner or a
business impacted by
a major event.”
Visit the Issues & Answers section at
bestsreview.ambest.com
to
watch an interview with Marc Rothchild.
What are some steps insurers should take to ensure
smooth implementation of AI?
One key step is to have the right teams and governance
structures in place. For claims, this means involving subject
matter experts, ideally someone currently managing an
active caseload or part of the claims management team, in
both the design and testing phases. This approach ensures
the solution will be applicable and beneficial in day-to-day
operations. Additionally, you need a technology and data
team that is knowledgeable about the latest advancements,
ensuring AI is used appropriately while adhering to data privacy
and governance standards. Since the insurance industry is
highly regulated, it’s essential to involve the compliance team
throughout the process to identify potential roadblocks and
secure necessary approvals before going live.
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Workers’ Comp Regulatory Trends:
Mental Health Presumptions,
16
Cannabis, Psychedelic Treatment
Lawmakers across the country have introduced legislation that addresses
compensability for job-related post-traumatic stress disorder, according to a
new report from the National Council on Compensation Insurance.
by Steve Hallo
overage for workplace mental health
injuries, cannabis and emerging psychedelic
treatments are among the biggest regulatory
and legislative trends impacting the workers’ comp
sector, according to a new report from the National
Council on Compensation Insurance.
Through July 31, the NCCI said more than 917
bills were introduced at state and federal levels that
could impact the workers’ comp market. As of early
September, 108 of those bills were enacted.
In the past legislative season, lawmakers across
the country introduced 64 bills related to workers’
comp and mental health, the NCCI said. Among
those, 51 specifically addressed compensability for
job-related post-traumatic stress disorder. Alaska,
Arizona and Oklahoma enacted legislation to add
PTSD-related presumptions to workers’ comp and
those laws strictly pertain to certain first responders.
Steve Hallo
is a senior associate editor. He can be reached at
steve.hallo@ambest.com.
BEST’S REVIEW
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Additionally, Vermont passed a law to expand
coverage for PTSD to certain state employees, while
New York has pending legislation that would expand
coverage to all employees with extraordinary work-
related stress, the NCCI said.
In addition to mental health presumptions, six
states saw bills related to coverage for certain first
responders diagnosed with specific types of cancers.
Three of those states—Maryland, West Virginia and
Wyoming—passed the presumptions into law.
Further, Louisiana now has a presumption
for state police suffering from hearing loss, while
New Jersey’s emergency medical technicians and
paramedics have a presumption for cardiovascular or
cerebrovascular injury or death, the NCCI said.
Reimbursement for medical marijuana continues
to be a hot topic in addition to overall legalization
debates. The NCCI said that most state proposals to
legalize marijuana seen in 2024 included provisions
that excluded workers’ comp reimbursement
for cannabis costs. States that had carve-outs for
C
Workers’ Compensation
mailto:steve.hallo@ambest.com
“Most of the state proposals to
legalize marijuana this legislative
session contained provisions
that reimbursement for workers’
compensation is not required.”
Tim Tucker
National Council on Compensation Insurance
workers’ comp included Kansas, Missouri, South
Carolina, North Carolina and Pennsylvania.
However, Massachusetts and New Jersey have
bills pending that would require reimbursement
for medical marijuana in workers’ comp, with
some exceptions, the NCCI said. New York also is
considering legislation that would allow medical
marijuana to be viewed as a traditional prescription
drug for workers’ comp purposes.
According to Tim Tucker, the NCCI executive
director, legislative and government affairs,
lawmakers across the country have grappled with
marijuana reimbursement issues for years.
“Most of the state proposals to legalize marijuana
this legislative session contained provisions that
reimbursement for workers’ compensation is not
required,” Tucker said in an emailed statement.
Missouri also considered, but ultimately did not
pass, several bills that would have reduced workers’
comp benefits for injuries connected with marijuana
use.
Further, Kentucky also considered a bill that
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