Innovations and Challenges in Insurance: HAI Group CEO's Views on AI, Weather, and Workforce

Ed Malaspina of HAI Group is interviewed by Lori Chordas of AM Best

HAI Group President and CEO Ed Malaspina recently sat down with Lori Chordas from AM Best for an AM Best TV segment on maintaining a skilled workforce in today's work environment, the effects of artificial intelligence on the insurance industry, emerging cybersecurity threats, and the impact severe weather has on insurance carriers.


The interview took place at the 2023 Vermont Captive Insurance Association Annual Conference (August 7-10) in Burlington, Vermont,


Below is a brief recap of the interview.  Click here to watch the entire segment from AM Best TV.  


How can insurance companies attract and retain talent?

Malaspina commented that there's a perception that working for an insurance company is a "stuffy job." But there are roles beyond underwriting and claims, such as marketing, finance, information technology, and human resources. 


"Share the vast array of opportunities [at your company] to attract more talent," Malaspina said.  



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How can insurance companies deal with a higher frequency of severe weather events?

Insurance companies use probability and statistics to model risk for severe weather events. Based on the weather patterns of the past few years, the current models likely need to be updated, Malaspina said. 


According to Malaspina, carriers must plan accordingly by leveraging coverage terms and conditions, partnering with other insurance carriers, and leveraging the right kind of reinsurance. 



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How can insurance companies address cyber risk?

Malaspina said cybercriminals aren't just going after large companies. More than 70 percent of businesses affected by cybercriminals have less than 1,000 employees, he noted. 


HAI Group insures public and affordable housing organizations across the country. 


"Housing [organizations] are not immune [to cyber risk]," Malaspina said. "The strongest defense is the human firewall."


The human firewall concept entails leveraging staff training to help employees recognize the signs of a cybersecurity threat, such as a phishing email. Malaspina said cyber insurance policies are available to help businesses mitigate risk, but in today's digital world, securing a policy can be more complex than filling out an application. 


According to Malaspina, some cyber insurance carriers may try to penetrate an applicant's system to test their protection level. The application may be denied if specific security measures like multi-factor authentication and secure backups aren't in place. 



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How can insurance companies leverage artificial intelligence?

Malaspina said artificial intelligence (AI) will continue playing a role in the insurance industry and will likely create efficiencies that improve production in some business segments. 


While efficiencies are to be gained, HAI Group is "people-centric," he added. 


"The personal touch is valued [at HAI Group]," Malaspina said. "We're going to stick to it."

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