Why 60% of Global Losses Go Uninsured | Jamie Cuffe

Jamie Cuffe (0:00)

If you think about last year, 60% of the world's losses were uninsured. I mean, these are fires in California, floods in Florida. That's a $9 trillion protection gap.

And the reason, you know, some of it is capital, some of it's regulatory, but the vast majority of it is the cost of underwriting, of servicing the policy, of paying the claim, just more than the policy itself was worth.

SPEAKER_2 (0:23)

Hello everyone, and welcome back to MTS. Today, I'm joined by my last guest of the day. We have Jamie Cuffe here from Pace. He is the founder and CEO, and Pace is currently building AI agents that insurance for insurance operations. So Jamie, I'm so excited for you to join us today on MTS.

Jamie Cuffe (0:41)

Thank you so much for having me. It's great to be here.

SPEAKER_2 (0:43)

It's really great having you. Right before we went live, you and I were just talking about how your wider insights about the insurance market, how AI is affecting insure tech as a whole. And I wanted to get your perspective on the broader point of view here.

Jamie Cuffe (0:55)

Absolutely. So Pace is the operations partner of the World City Insurers. And so we work with some of the largest insurance carriers in the world, like Prudential and Convex and others, helping them to scale their back office operations with AI agents. And really, we've seen remarkable trends in terms of how the industry is adopting AI and particularly agents. And one thing that's interesting for our industry is when co-pilot has happened, a lot of certain other verticals tipped earlier like illegal or financial services. But insurance runs many of these operations at hundreds of thousands of times a week scale. And so it really needed AI agents to be working. And so towards the end of last year, that's really when that started to take off for the industry more broadly. And now we're seeing this advance not just for what are the things that we're doing today, either outsourced or unscaled back office teams we can do faster, better, cheaper, but also what are things that just are now possible with AI that weren't possible before.

And so a lot of what we've been doing is helping re-imagine the products and capabilities that these insurers can bring to market, now the economics of serving the insured is changing.

SPEAKER_2 (2:03)

Okay, that's what I want to get your perspective on, on what does AI now make possible that wasn't possible before. So let's say, let's just talk about the general insurance market. What were some of the issues before AI that were really difficult, and where is AI actually coming into the space?

Jamie Cuffe (2:16)

Absolutely. So if you think about last year, 60 percent of the world's losses were uninsured. I mean, these are fires in California, floods in Florida. That's a nine trillion dollar protection gap.

And the reason, you know, some of it is capital, some of it's regulatory, but the vast majority of it is the cost of underwriting, of servicing the policy, of paying the claim, is just more than the policy itself was worth.

SPEAKER_2 (2:38)

Yeah.

Jamie Cuffe (2:39)

And so now, with agents, there's an opportunity to just completely change the economics of servicing these policies, be able to serve a 100-person organization the same way you should serve a 10,000-person organization, to be able to underwrite really efficiently and effectively new markets that were impossible before, and to be able to pay out claims the same day and get people back into their homes. And I think that's what's really exciting to me, is insurance is not zero-sum, and there's this huge opportunity now to launch these products that just were not possible before.

SPEAKER_2 (3:10)

I guess what makes me particularly curious about insurance is, to be a good insurance provider, you almost have to be a really strong future predictor about where the world is going, because that's how you can actually know how to price things or what you should be underwriting or what shouldn't be. And so when it comes to actually trying to get some of the data about where the world is going, maybe let's talk about something like housing, like house insurance. You have to be able to predict different natural disasters. Is the likelihood of this house going to catch on fire because of growth of wildfires in this area? And so what are some of these different areas where you're noticing insurance providers want more data about predicting the future?

Jamie Cuffe (3:53)

Yeah, absolutely. I think a lot of what we're seeing with agents is just surrounding these highly skilled underwriters with basically a team of agents that supercharge them. And so to give you a little bit of context on how this is changing the landscape is, a lot of unstructured, messy data comes into an underwriter. It's information about the home, it's information about the statement of values, it's like a full property and it has a bunch of deeds and other associated items to it. And underwriters have to go and reason through all that information before they can even start thinking about, do they want to do this risk? So agents can take a lot of that unstructured documents and emails and going over public records, take that sort of off of the underwriter's plate.