AI in Insurance: Setting New InsurTech Benchmarks and Managing Risks in 2024

The role of AI in the insurance industry is seldom reported with the same animated vibe as it is done for other front-runner industries. The maturing Generative AI or GenAI landscape has forced insurance companies and related insurtech service providers to embrace the fast-paced transformation with calculated risks. AI in Insurance in 2024 is expected to be a major game-changer as insurtech companies look at advanced machine learning and deep learning algorithms to meet industry expectations. An avalanche of insurance-focused big data mined from a wide range of connected devices will increase the demand for superior product categories for AI in insurance companies. To understand how artificial intelligence and machine learning applications in insurance product categories can potentially disrupt the sector, we spoke to Rhino’s co-founder and CEO, Benjamin Lantos.

What’s Rhino? Rhino is a proptech startup that specializes in security deposit insurance. In 2017, Rhino pioneered security deposit insurance, replacing cash deposits with smart, affordable insurance so renters can maintain control of their cash. Here’s the full transcript of our AIThority Interview with Rhino’s CEO.

Hi Benjamin, welcome to the AiThority Interview Series. Please tell us about your tech journey.

Before co-founding Rhino, I worked in multifamily rental development, overseeing acquisitions, development, and management. I also spent time at Goldman Sachs raising capital, structuring debt and repositioning consumer and real estate assets. All of these experiences led me to see — along with my co-founders — the tremendous opportunity for digital transformation in the rental industry. We began building products to put m********* in renters’ pockets, offering security deposit insurance, digital cash deposit management and compliance, and renter’s insurance — all via a modern SaaS platform.

No doubt Rhino is reshaping the security deposit insurance industry. Could you cite a few examples of how this insurtech category has evolved in the last few years?

For generations, renters and landlords have remained concerned about the cash security deposit. While the average American’s emergency savings are often below $400, a staggering $45 billion remains tied up in rental security deposits. We established Rhino to revolutionize the traditional security deposit model, making renting more affordable and accessible.

Our approach centers on providing low-cost security deposit insurance policies, allowing renters to retain their valuable cash reserves while providing property owners the protection they need to cover losses from potential damages or unpaid rent. Property managers can confidently list rentals without the burden of requiring a traditional security deposit, as renters can effortlessly access a Rhino policy for a nominal monthly fee, often just a few dollars.

Please tell us more about Rhino’s insurance services. How do you use AI in your modeling?

We started with security deposit insurance and have since expanded our offerings significantly.

In 2022, we acquired Deposify, which allowed us to build Rhino+, our comprehensive end-to-end solution for managing cash deposits and deposit insurance seamlessly within a single platform. We’ve also launched Credit+, which helps build credit through on-time rent payments. We are using machine learning to support our risk analysis, and we will continue to explore ways to leverage AI to improve our products and the renter experience.

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

We take very seriously our adherence to insurance regulations, which vary state by state. Before becoming CEO, I served as Rhino’s Chief Risk Officer, so this is an area with which I am intimately familiar. Our relationships with state regulators are critical to our success, as are our relationships with property owners. Incidentally, working with Rhino is not mutually exclusive to working with traditional insurers for other property insurance needs.

Can you talk about some of the most innovative fintech apps and platforms in the global payments and banking industry that according to you are set to create new benchmarks?

It’s undoubtedly a fast-moving market with new entrants trying to make a splash all the time, especially those apps and platforms specializing in crypto. It remains to be seen if any will overtake CashApp, Venmo, Plaid, Zelle, and other well-established digital payment services.

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?

It’s an industry that’s embracing digital transformation more and more. Consider where Rhino is today, for example. Our security deposit insurance is available to 2 million homes. The country has over 40 million rental homes, so there’s a tremendous opportunity to make renting more affordable by addressing the $45 billion locked up in security deposits in the rest of the market.

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

As high m************* and limited inventory create more barriers to homeownership, renting remains an attractive proposition for many Americans. Technology will continue to play an important role in finding, applying for, and managing payments for rentals, especially for younger, digital-native renters.

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

Using the email tool Superhuman has been a game changer for my email inbox and overall productivity. I can typically review, respond, and triage emails in less than 10 minutes and then return to meetings or deep work. I’ve also been leveraging ChatGPT to help with my drafting and preliminary research. It’s allowed me to skip the “blank canvas” stage of work and start with some content to begin editing and crafting my final work product.

What are some of the biggest challenges in fintech that innovators and other startups often face, what are your top best practices that you’d like to share to help future fintech entrepreneurs in this space?

My best advice is to take time to deeply understand your customer’s pain points with your product and continuously explore and evaluate new strategies to solve them. For Rhino, we consider both the property owners and managers that make our products available to renters and the needs of the renters themselves.

Many back-end rental processes haven’t changed much in decades, with many companies still using common software platforms developed back in the 80s. They’re cumbersome for property owners to use, but there’s a tendency to stick to familiar, traditional methods, and it’s a challenge to overcome that inertia. Renters now have more choices and are inclined to choose properties that offer digital transactions.

Rhino understands that desire, hence our focus on delivering a seamless, modern experience.

Your favorite fintech quote.

A favorite fintech quote of mine is by Max Levchin, co-founder of Affirm, who said: “We put what is good for our customers first and will never benefit from their mistakes or misfortune.”

It resonates with me because it puts customers at the forefront, prioritizing their well-being and satisfaction, which I believe is a fundamental principle for any successful business. Since we are in fintech, we need to be thoughtful about how our products work for each customer and ensure we meet their needs. We also need to focus on building products that genuinely benefit customers and avoid practices that could lead to their financial stress or burdens. By taking a customer-centric approach, I believe we can create long-term success and a positive impact.

Thank you, Benjamin! 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]