Time to eradicate inefficiencies in Delegated Authority through GenAI?

Gen AI in our Day to Day Lives

Let’s start with the official definition from my chosen GenAI tool of choice! Generative AI, often abbreviated as GenAI, is a subset of artificial intelligence that uses generative models to create new content such as text, images, videos, audio, or software code. These models learn patterns and structures from large datasets and use this knowledge to generate new data based on user inputs or prompts.

It all sounds great, in-fact I shouldn’t have bothered writing this article myself but asked one of hundreds of GenAI tools to write it for me because as we all know GenAI can make your own words sound much better! It can also enhance my photos and make me look younger, I can take a picture of my fridge, and it come up with new recipes for me based on whatever is left after a long week at work and it can give me mental health and wellbeing advice.  GenAI has replaced Google in my day-to-day existence but where is it going to step in and transform Delegated Authority (DA) in my work life?

Gen AI Use Cases for Delegated Authority

Now anyone who has spent any time looking at DA knows it is littered with inefficiencies, all of which impact a firm’s bottom line.  The cost of doing business in the Lloyd’s and London market is notoriously expensive, when coupled with small margin DA business, efficiency and cost reduction must be at the forefront of senior exec agendas.

Here is where GenAI could step in. The age-old problem of the non-digital nature of the slip – GenAI has the capability to scrape and capture this information and accurately represent this in an underwriting system from which you could monitor breaches of contracts without the need for manual rekeying of data. The bordereaux conundrum of how to transfer data from an excel spreadsheet – augment and improve the data using open-source data and seamlessly transfer it into a centralised data set has plagued the London market for years.  The market solution to date has been use of an outsourced service manually manipulating data at significant cost to your business however are those days now numbered.

In addition, with increasing regulatory scrutiny and oversight required on DA partners throughout the lifecycle, GenAI could be used to review and summarise documents to support streamlined audit activities or identification of potential areas of risk.

There are potentially hundreds more use cases out there in relation to risk and premium calculation, claims, fraud, risk selection and AI driven insights however navigating this new world of possibilities requires us as an industry to embrace change and new ways of working, as well as upskill and venture into the unknown.

So where do you start when you are looking at your DA function and trying to determine where GenAI fits in your transformation agenda?

• Understand the GenAI capability within your firm

It’s coming, and we all need to skill up at all levels across the organisation to be able to maximise potential benefits. Become a champion and advocate for AI. Understand the governance, risk and ethics associated with use of AI and work with your organisation to ensure these are managed whist fostering an innovation mindset that could just give you the competitive edge.

• Challenge your Software and/or Outsourcing Partners

As mentioned previously, the potential for GenAI in the bordereaux management and DA space is significant but just how many of your partners are investing in appropriate GenAI capability which will reduce firms overall processing costs and generate improved datasets for decision making. Vendor GenAI strategies vary from chatbots presenting you with reports to truly disruptive mapping, cleansing and data standardisation and augmentation strategies. If their GenAI strategies do not align with your vision, then it might be time to look for another partner that does.

• Start Small, Test and Learn

Wherever you look now new GenAI tools are popping up both in our personal and professional lives. These initiatives do not have to be significant investments which redefine your whole operating model.  It could be as simple as identification of a business problem that could be solved by GenAI and completion of a short sharp, cost-effective proof of concept in a ring-fenced environment. Innovative firms willing to take a risk will be at the forefront of the potential risks and benefits of AI, so a small investment now could just put you ahead of the competition in the longer term.

GenAI could be the answer, but individual firms need to determine the DA business problem that is giving them the biggest headache.  Having worked on a variety of bordereaux projects over the last 5 years, there is so much more as an industry we could be doing to leverage new technologies and new ways of working.  GenAI in bordereaux management could drive the tangible benefits of improved data sets and significant reduction in ongoing operational cost making it a no brainer for senior leaders. After all, if GenAI can make a delicious meal from the contents of my empty fridge, surely it should be able to map, and augment excel data into a specified data structure without the need for an offshore army! Time will tell however we as an industry need to be brave enough to ask the right question and then embrace the response.

At GreenKite we support businesses in all aspect of effective Delegated Authority implementation and are passionate about innovation. If you would like to discuss how we could support your business’s approach to DA, please reach out to Karen Stanford, CXO and DA specialist.