How Arbol is Leveraging AI to Drive Innovation in Insurance

April 11, 2023
Abstract colors representing AI. Photo credit: Adrien VIN.Abstract colors representing AI. Photo credit: Adrien VIN.

As the impact of climate change escalates, the insurance industry faces unprecedented challenges in managing risk and protecting businesses and individuals from weather-related disasters. At Arbol, we believe that the key to addressing these challenges lies in the innovative use of technology, particularly AI and data-driven decision-making.

Our approach to climate risk coverage is based on a deep understanding of science and machine learning to develop innovative AI methodologies for forecasting and pricing weather risk. By combining cutting-edge climate modeling with state-of-the-art financial markets systematic portfolio management, we’re able to automate our underwriting process using AI, thus  generating pricing that meets return and risk objectives. The systems we have in place   ensure consistency and accuracy across our entire portfolio of policies.

At the heart of our approach is the use of advanced climate modeling techniques to generate highly accurate and detailed seasonal and subseasonal forecasts of weather-related risks, such as hurricanes, floods, and droughts.

We draw on data from dClimate, a leading decentralized climate information ecosystem that enables us to access data from an immutable record of climate information encompassing satellites, ground-based sensors, and historical weather patterns, to create models that are among the most sophisticated in the industry. Using a range of AI techniques, including machine learning and deep learning, this data is then used to generate pricing models that are tailored to the specific needs of each customer.

Benefits of Arbol’s approach

Fair and rapid payouts

A key benefit of Arbol’s approach is our ability to offer parametric coverage that pays out fairly and rapidly when certain predefined conditions are met, such as a specific weather event or a certain level of seismic activity. This approach provides more  efficient payouts compared to traditional insurance models that may require extensive claims processing and subjective assessment of losses.

Blockchain level transparency

Another advantage of our approach is our use of blockchain technology to improve operational efficiencies and enhance transparency. By employing a distributed ledger system and smart contracts, we’re able to automate many of the administrative tasks associated with insurance, such as policy issuance, premium payments, and claims processing. This not only saves time and resources but also ensures greater accuracy and transparency throughout the insurance process.

At Arbol, we’re committed to driving innovation in insurance and leveraging AI to create more accurate, reliable, and efficient solutions for managing climate-related risks. We believe that by combining cutting-edge technology with a deep understanding of climate science, we can offer truly innovative and effective solutions that meet the evolving needs of businesses and individuals around the world.

As climate change continues to pose increasing risks to businesses and individuals, the need for innovative solutions like ours will only continue to grow. We are proud to be at the forefront of this important work and look forward to continuing to drive innovation and efficiency in the insurance industry.


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