Technology, and AI in particular, has been disrupting the insurance industry for the last few years, but one insurance market has remained untapped: multi-family properties. This market, worth a whopping $22 billion, has remained static due to the types of policies involved in multi-family property insurance claims, which are most often not large enough in monetary value to justify the time and effort on behalf of brokers to manually underwrite them.
Therefore, condo associations (HOAs), building owners, property managers, and developers often have to wait a long time to receive quotes (around two weeks, since everything is done manually, including risk assessments) and end up overpaying for policies, which are then relayed to homeowners. As a result, the multi-family property market has been ignored and fragmented, suffering from poor customer experience and economic inefficiencies.
AI has been particularly popular and effective in benefiting the insurance industry, from speeding up the claims filing process to implementing driver-safety systems and more.
Honeycomb, an Israeli insurtech company, is now using AI to digitize the multi-family property market with on-demand policies and digital building inspections. Their AI evaluates pictures and data submitted by homeowners and other information to underwrite insurance policies moments after filling out a short online application.
The policies produced by the system more accurately reflect the true condition of a building, enabling homeowners to only pay for what they need instead of overpaying for generalized policies. For example, showing photos of a newly installed electrical system in the building could justify a discount on the policy, in contrast to older buildings whose outdated systems could warrant a higher price.
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Property owners can also conduct their own home inspections digitally, with AI technology able to accurately measure property size, building quality, risk assessment, and other elements that can greatly impact the cost of a policy. Rather than wait weeks for an inspector, they can perform a self-inspection by submitting photos and receiving appropriate coverage plans.
In the winter, insurance is always needed more as there are more accidents due to inclement weather. Insurance companies can utilize technology to capitalize at this time of the year. Honeycomb is working with tenants to assess how they use their properties and analyze the risks with a usage-based system. One measure they have taken is introducing weather alerts as a sort of gaming system that gives customers points for performing winter preventive maintenance activities, such as shoveling snow on a sidewalk. If performed, customers accumulate points and receive discounts on their insurance price.
This is only one example of how AI is continuing to influence insurance, and with winter rapidly approaching, more insurance companies should take advantage of emerging technologies to better prepare themselves, and their customers.
Written by Itai Ben Zaken, CEO at Honeycomb
