AiThority Interview with Kevin Horwitz, VP Innovation Management and Policy Development at RLI Insurance Company

Hi Kevin, welcome to our AiThority Interview Series. Please tell us about your tech journey with RLI. 

I began with RLI in the Claim Department as a claim adjuster for large loss and environmental claims.

Over time it became apparent that many technological advancements could be added to the claim handling process that would assist our company. Claim handling was one of the first targets of the early insurtech movers. Once I assumed oversight of claim operations, we started to adopt new technologies including machine learning, SMS capability, digital claim intake, and others. After delivering several successful innovations for the Claim Department, RLI leadership created the current Innovation Management Department in January 2021 to bring successful innovations to the rest of the organization.

Could you tell us more about the services offered by RLI?

RLI is mainly a commercial insurer with a very broad scope of products. We also have a large standalone personal umbrella product. Depending on the product, we offer many different services including digital portals for our brokers, API capability to embed our product with distributors, and self-service portals for our producers and policyholders.

We aim to be easy to work with across our products, both with our distribution partners and our end customers.

Have you used AI in your modeling?  Please tell us more about these AI models from the POV of the financial services industry.

We have used AI in many different contexts but not specifically to model rates.

We use AI to analyze third-party data sources and review contracts to deliver immediate insights to our underwriters at the time of decision. We also use it to gain insights into our customers’ needs.

The global insurtech market size was valued at USD 5.45 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 52.7% from 2023 to 2030. What are your comments?  

There has already been explosive growth in the insurance technology market. However, the industry has moved from attempting to displace incumbents to focusing on enabling incumbents. I expect that to continue and there is no doubt that carriers can learn a lot from insurtech companies.

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While it is likely that there will be some consolidation among the insurtechs working with similar technologies, many of them will have staying power as a crucial part of the insurance ecosystem.

How is RLI reshaping the insurance technology space in 2023? Could you cite a few examples from your recent use cases?

RLI is reshaping insurance by providing needed coverage in niche spaces. We have always been a key part of the marketplace by solving problems that others may not have the capacity or expertise to handle well. For instance, we have been a major player in New York Construction and a standalone personal umbrella for a long time. We look to find market needs and then apply our unique blend of underwriting skills, claim expertise, and enabling technology to provide innovative solutions to those markets and customers.

There are headwinds for insurtechs, notably regulation issues and a reluctance of established insurers to work with them. How do you manage with them?  

There is little doubt that there are headwinds for the insurtechs, but we do significant due diligence around regulatory issues and are willing to work with insurtechs to solve those types of issues. We are not reluctant to work with insurtechs particularly where they have unique products or skillsets that make a tangible difference for our products or services. That said, we are very cautious about data security and risk related to unproven partners.

Can you tell us a bit about the most innovative fintech apps and platforms in the global payments and banking industry that according to you are set to create new benchmarks?  

We do not get involved too heavily in fintech apps related to payment and banking, but concerning insurance, the most innovative solutions center around parametric payouts and pay-for-use programs. Parametric products are gaining steam and the concept of automatic payouts for specific triggers has broad appeal for simple coverage like deductible buyback products. However, there are significant regulatory issues surrounding the concept of triggers.

Pay-per-use or pay-per-mile products similarly have some appeal, especially for seasonal insureds like contractors or truckers in tough seasonal climates.

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What are some of your thoughts on how the current world situation will impact the use of (and development) of the fintech segment?

Increased globalization of under-served markets will provide a lot of opportunities for those that can effectively market and serve those customers.

What’s your smartest work-related shortcut or productivity hack?

Probably going to three screens, two vertical (for calendar and teams) and one horizontal (for email). I also am a real stickler for email organization but my whole system is too extensive to relay here.

Your favorite business quote from the Fintech industry:

While it’s not a fintech-related quote, one of my favorite innovation quotes is from RLI’s Founder, Gerald D. Stephens, who was a true visionary and instilled a culture of continuous innovation at RLI, “’It can’t be done’ is the rallying cry of breakthrough thinkers”. 

 Tell us about some of the top tech events that you’ll be participating in (as a speaker or guest:

In 2023, I spoke at the Digital Insurance Summit and at the IASA earlier this year, and plan to attend Insurtech Connect in Las Vegas.

Thank you, Kevin! That was fun and we hope to see you back on AiThority.com soon.

[To share your insights with us, please write to sghosh@martechseries.com]