Embracing Solar Power: Technological Evolution and Insurance Industry Challenges

With the rapid expansion of renewable energy, insurers are moving to help cover the emerging liabilities of independent power producers. However, the insurance industry struggles with an unclear risk landscape, leading to uneven appetite from underwriters and coverage shortfalls. kWh Analytics, a managing general agent specializing in data-driven solutions for renewables, released its 2024 Solar Risk Assessment, providing insights into the evolving technological and operational needs of the solar industry. CEO Jason Kaminsky highlights the company’s focus on creating specialized insurance products to support the renewable energy sector.

AI and business rules engines (BREs) are revolutionizing underwriting by automating repetitive tasks and enabling underwriters to focus on strategic issues. Underwriters face challenges such as information overload, manual data entry, and the need for continuous knowledge updates due to changing regulations. AI can automate data entry, document scanning, and risk analysis, while BREs streamline rule-based tasks, ensuring consistency and accuracy. This automation allows underwriters to focus on complex risk assessments and high-quality customer service, enhancing job satisfaction and efficiency.

Despite automation, underwriters remain crucial for managing and overseeing these technologies. Their expertise is vital for calibrating AI systems and updating business rules to comply with industry standards. Automation cannot replace the human experience and intuition needed for complex risk cases and personalized customer service. The synergy between automation and underwriters leads to faster customer service, error reduction, and process optimization, ultimately increasing profits and improving customer satisfaction. According to McKinsey, automation can increase operational efficiency in insurance by 30% to 40% and reduce claim processing time by 50%, emphasizing the need for modern technologies to stay competitive.