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Welcome to the Pride!

Every week, our team reviews 200+ insurance articles.

We hand pick, not only the most interesting, but the three we believe are going to have the greatest impact on the global insurance markets.

Here’s what caught our attention this week:

1. NAIC released its 2025 Federal & Legislative priorities
2. How AI is being used in commercial insurance underwriting
3. AI technologies offer $80-160 billion fraud reduction potential by 2032

The common thread?

The high-wire act of embracing new technology and keeping afoot of shifting regulations

NAIC Calls for Elimination of Federal Insurance Office

The National Association of Insurance Commissioners (NAIC) is 156 years old.

This week it announced its federal legislative & regulatory priorities for 2025.

Most notably the NAIC is advocating for the elimination of the Federal Insurance Office (FIO) and enhanced natural catastrophe resilience.

In its official announcement, the NAIC stated that the FIO…

"stands in direct conflict with the states' role as primary regulators, complicates the states' engagement with fellow insurance regulators globally, duplicates confidential data collection from the insurance industry, and blurs the line that separates Treasury from independent financial regulators."

Other priorities include stable program funding, and clearer federal guidance for insurers. (source)​

So what?

Beyond the FIO issue…

The priorities seek to improve property coverage availability and pricing.

The NAIC is calling on congress for ”targeted funding, tax incentives, and support of state mitigation programs.”

Our Take

The appropriate division of regulatory responsibilities between state and federal authorities seems obvious to us.

We agree w the NAIC, leave it the States!

President Jon Godfread said:

"We do not apologize for our success. Instead, we welcome others to learn from it. If other countries want to modernize their insurance markets, we invite them to follow our lead.

This state-federal dynamic creates both challenges and opportunities for financial institutions.

We're advising our clients to call on their Congressmen and elected officials to support the NAIC.

Want to discuss how these regulatory changes could affect your institution's risk management strategy? Contact LION Specialty for a focused assessment of your regulatory exposure.

AI's Commercial Insurance Transformation: Beyond the Hype

Generative AI is rapidly transforming commercial insurance operations, according to new Ernst & Young analysis.

The technology is moving beyond consumer applications into core underwriting, pricing, and risk assessment functions. (source)​

Here's your 3-bullet summary:

• Underwriting transformation is underway. AI eliminates manual tasks while enabling more detailed risk assessment through sophisticated questioning and pattern recognition.
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• New talent models are emerging. Future underwriters will function as "AI experts and skilled prompt engineers" with more expected basic knowledge of large language models.
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• Operational silos are breaking down. AI enables greater collaboration between traditionally isolated roles in underwriting, product mgmt, and actuarial departments.

So what?

As insurers integrate AI into their core operations, the hope is…

…Institutions will experience variations in service quality, response times, and risk assessment sophistication

The talent landscape for carriers is shifting dramatically, with technical expertise in AI-human collaboration becoming increasingly valuable.

This is happening faster than many expected.

Our Take

Media attention wil continue to be focused on consumer-facing AI applications.

While the most significant long-term impact will come from core operational enhancements.

We're advising our clients to:

• Engage carriers in discussions about their AI implementation roadmaps during renewal periods
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• Evaluate internal and third party data management practices

The gap between carriers embracing AI and those delaying implementation will likely widen, making carrier selection increasingly important for optimal risk management partnerships.

Wondering how your insurance carriers' AI capabilities compare to industry leaders? Contact LION Specialty for our carrier AI capability assessment framework.

Fraud-Fighting AI: The $160 Billion Opportunity

Insurance fraud remains an endemic problem.

It’s like a hidden tax.

Costing the average American family $400 to $700 annually in increased premiums.

Deloitte predicts that by using AI across the claims process, insurance companies could save between $80 billion and $160 billion by 2032 - savings that could come from detecting and preventing fraudulent claims more effectively.

Multimodal AI systems can analyze text-based claims forms.

Like text from claim forms, photos and videos of damage, satellite images, and data from smart devices all at once. (source)​

This combination helps spot fraud patterns that legacy methods miss.

So what?

The potential is massive.

Widespread fraud reduction.

If carriers successfully implement these technologies and reduce fraud losses...

It could help mitigate premium increases that have been exacerbated by recent inflation and potentially ease budget pressures for insurance buyers.

Claims process evolution could be an added benefit.

If carriers evolve and adopt these advanced verification systems.

This technological shift will occur alongside ever-changing regulatory frameworks for AI oversight. Insurers will need to navigate both the benefits of improved fraud detection, and the compliance requirements associated with AI-driven claims processes.

Our Take

Insurers that pair sophisticated technology with human ‘cyborg employees’ can detect claims fraud with higher speed and precision.

It’s a win-win for insurance buyers & carriers alike.

We're advising our insurance company clients to:

• Discuss fraud detection capabilities during carrier selection to understand potential premium impacts
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• Develop internal expertise on AI-driven claims processes to better navigate evolving requirements
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• Maintain a human-in-the-loop with all AI systems that make business decisions

Want to explore how emerging fraud detection technologies could impact your insurance program? Contact LION Specialty for a personalized fraud risk assessment.

The Bottom Line

If you're a director or officer at a financial institution - your personal assets are on the line if your company faces a major claim.

That's why we created the D&O Contract Vigilance Blueprint.

It's a 5-day email course to help you:

• Secure better D&O insurance: Learn how to avoid common policy mistakes and identify overlooked coverage gaps.
• Protect your personal assets: Understand your potential liability and take steps to mitigate your risks.

​>>> Get the D&O Contract Vigilance Blueprint​

Don't wait until a claim hits to find out you're under-protected.

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Stay Covered,

Natasha & Mark

Co-Founders and Managing Partners

LION Specialty

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