real estate<\/a> division at Insurance Office of America and a board member of the Florida International University School of Real Estate, tells Realtor.com. “You’re losing the human element to underwriting, which I think is pretty dangerous”<\/p>\nLevenshon maintains that every homeowner has a different level of risk tolerance, and she argues that underwriting professionals can come up with “much more creative ways” to structure a comprehensive coverage plan than an AI model could. <\/p>\n
Levenshon does not dismiss AI modeling out of hand, but argues that it has limitations, especially in Florida, where the risks and mitigation techniques are vastly different from those in California.<\/p>\n
“Wind and water work very differently than fire,” she explains. “The mitigation that has to come from a roof being blown off is very different than the mitigation of smoke. … During a wind event, a hurricane, the wind is blowing for eight hours. It’s a completely different beast.”<\/p>\n
She adds: “I think that there is a place for AI in underwriting as far as being able to better model the risk, but as far as the underwriting element to it, I’m skeptical because I think that you still need humans to evaluate risks.”<\/p>\n
Critics have also pointed out that AI models tend to be self-contained and opaque, making it difficult to verify their accuracy, or challenge their risk assessments in case a homeowner\u2019s claim is denied or the monthly premium goes up, as Bloomberg reported. <\/p>\n
Lindsey Klarkowski<\/strong>, policy vice president for data science at the National Association of Mutual Insurance Cos., says the use of AI in insurance has several advantages to consumers, including identifying ways to make homes more resilient, fraud prevention and detection, and increased efficiency.<\/p>\n“Though, it’s important to note that AI use is simply one piece of the equation, especially in the context of coverage availability and pricing,” she tells Realtor.com. “AI can lead to increased precision in risk-based pricing, and has been shown effective in certain mitigation efforts, which can both lead to cost savings. But, those cost savings may be offset by massive losses brought about by changing weather patterns, litigation excesses and abuse, or otherwise, thereby underscoring the need to focus on cost drivers the industry can control.”<\/p>\n
Asked about the possibility of claim denials based on AI assessments, the NAIMC official says that in Florida, existing state insurance law stills applies. <\/p>\n
“Artificial intelligence is a tool added onto or incorporated into processes that already fall within the purview of existing insurance law,” explains Klarkowski. “It is not an end-run for the insurance companies around a state\u2019s statutes, regulations, and consumer protections.”<\/p>\n
She adds that on the whole, new technological advances in insurance stand to benefit consumers and the broader marketplace. <\/p>\n
“Whether for better understanding and more accurately pricing risk, improved mitigation, or operational and other efficiencies, AI use could potentially address challenges for Florida, just as with other markets and homeowners around the country,” concludes Klarkowski.<\/p>\n","protected":false},"excerpt":{"rendered":"
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