The complex world of insurance continues to evolve, and with the rise of artificial intelligence (AI) and third-party data, the pace of transformation is accelerating. On a recent episode of the Unstructured Unlocked podcast, Douglas Loots, Chief Revenue Officer at Coherent, joined hosts Michelle Gouveia of Sandbox Insurtech Ventures and Tom Wilde, CEO of Indico Data for a thought-provoking discussion on the changing landscape of insurance. Loots shared fascinating insights on how AI, combined with third-party data, is empowering underwriters, optimizing processes, and reshaping the industry’s future.
This blog post dives into the highlights from the podcast, exploring how data-driven tools and emerging AI technologies are solving some of the industry’s most complex challenges.
Listen to the full podcast episode here: Unstructured Unlocked Podcast
Understanding the unique role of underwriters in insurance
Insurance underwriting is a delicate balance between revenue generation and risk management. As Loots pointed out during the episode, underwriters are “the only people on the planet with both a sales quota and a risk quota.” This dual responsibility makes their role not only critical but also increasingly complex in the modern insurance landscape.
While AI offers the ability to enhance efficiency, Loots stressed that it will not eliminate the need for human expertise. “AI at its core is a regression to the mean,” he explained. “It will never be able to price something as complex as a carrier with airplanes, facilities, and employees across 140 countries. That’s where the seasoned judgment of underwriters remains invaluable.”
What AI does offer, however, is the power to support underwriters by delivering smarter insights and faster data processing. By augmenting the decision-making process, technology can empower underwriters to focus their expertise where it’s needed most.
Leveraging data for better decisions
The insurance industry thrives on data, and the integration of third-party information is allowing businesses to make more informed decisions. Loots highlighted that the availability of richer, broader datasets is enabling underwriters to refine their risk models and improve judgment calls. “What data does is allow them to make better judgments by increasing their dataset, ensuring their knowledge base is more precise,” he noted.
For instance, tools like Coherent’s platform enhance analysis by incorporating data from trusted providers like Indico. This enables carriers to better evaluate risks, streamline workflows, and focus on opportunities that align with their strategic goals.
Loots also discussed how the ability to conduct scenario analysis has become a game-changer for insurers. “I had a customer who ran 300 million scenarios in a three-week proof of value,” he shared. “That type of analysis lets companies think broadly about where their business is going and how best to manage it.”
Transforming workflows with AI
One of the podcast’s core themes was how AI is revolutionizing traditional workflows in insurance companies. Historically, underwriters relied on tools like Excel for pricing and risk assessment. While Excel has been invaluable, its limitations have become clear in today’s fast-changing market.
Loots pointed to a real-life example of inefficiencies in traditional workflows. “A scenario I’ve seen involved an Excel spreadsheet with 480 million cells that took 30 hours to run,” he said. “Our platform could run that same model in just 12 minutes, allowing users to perform multiple iterations quickly and refine their results.”
Additionally, emerging platforms like Coherent Spark “go where underwriters already live” by integrating seamlessly with Excel, while addressing its shortcomings. By combining AI capabilities with the flexibility of tools familiar to underwriters, organizations can modernize without alienating end users.
The importance of early technical pricing
Traditionally, insurers calculate pricing toward the end of the underwriting process, but AI’s scalability presents an opportunity to move this step earlier. Loots explained that early technical pricing can serve as a triaging tool, identifying high-potential risks and filtering out unsuitable ones.
“Why spend time underwriting risks that don’t meet your appetite?” Loots asked. “The earlier you can identify and remove mismatched risks, the more time your team can spend refining pricing for the most relevant opportunities.” This approach not only boosts productivity but also helps better align underwriting strategies with business goals.
Ensuring relevance in a softening market
Discussing shifts in market dynamics, Loots highlighted the importance of speed and agility as carriers brace for a potential softening market. He expressed concerns about firms taking on poor-quality risks to maintain business growth.
To stay competitive, he suggested leveraging AI to improve iterative development and scenario modeling. “Updating pricing models monthly or even quarterly instead of annually can give carriers a significant edge,” he said. “It’s all about faster productivity and ensuring your choices are guided by the best insights available.”
AI’s role in protecting intellectual property
While AI offers groundbreaking capabilities, Loots cautioned carriers against oversharing sensitive information with external platforms. “You don’t want to put your pricing model into tools like ChatGPT and give away your intellectual property,” he warned.
Instead, he recommended using platforms like Coherent Spark, which allow companies to retain control over proprietary pricing models while leveraging AI for analysis and automation. This approach not only ensures confidentiality but also enables carriers to enhance their offerings without compromising their competitive edge.
The path forward for insurers
Digital transformation in insurance isn’t about replacing human expertise with technology; it’s about striking a balance between leveraging AI for efficiency and empowering underwriters to bring their judgment and creativity to the table.
Loots underscored the importance of adopting technology that works for—and not against—underwriters. “The key strategy is putting technology in the hands of people who know the business best, in a language they already understand,” he explained. “This approach saves time, reduces complexity, and boosts productivity.”
Carriers willing to modernize their workflows, adopt advanced data solutions, and prioritize innovation will be better equipped to stay competitive in a rapidly evolving market.
Stay ahead of the curve
AI and third-party data are reshaping the insurance landscape, offering new opportunities for efficiency and innovation. By integrating these tools thoughtfully, organizations can unlock powerful insights, enhance underwriting practices, and drive sustainable growth.
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