Crash course: Jerseyans’ AI business is making name in auto insurance sector’s inspection work

Claim Genius is a niche within the niche. What drives this business, built by a group of Jerseyans who were heavy hitters on Wall Street, is an artificial intelligence solution that automates the vehicle inspection process for companies in the auto insurance sector.

What they’re finding is this: What’s good for one AI platform is good for all of them.

For the first few years after the launch of Claim Genius in 2018, the market reacted with a fair amount of skepticism toward what it was billing as a lane-switch in the sector — replacing an industrywide manual process with one that increased speed, consistency and efficiency.

Mike MacDonald.

“But, within the past year, with all the talk and excitement around happenings in AI technology, with the emergence of ChatGPT and tools such as that, the tide has shifted dramatically,” said Mike MacDonald, the company’s chief operating officer.

Claim Genius is another example of things trending in the right direction for providers of AI solutions trying to revolutionize traditional industries.

This company, made up of former tech executives at familiar names such as Nasdaq, Citigroup and Bank of America, is staging that revolution in Iselin. From its local base, it’s improving on a platform that can take images of vehicles that have been involved in accidents — or those in other scenarios that require inspection, such as vehicles pre- and post-rental from airports — and identify damage and repair estimates.

MacDonald and CEO Raj Pofale believed that, even following minor accidents, damaged vehicles going through a normal insurance claim process subjected insurance customers to long wait times.

“That’s a problem statement that’s also the same all around the world,” he said. “So, we’re able to sell this solution the same way around the world. It’s not unique to a particular market. And, the truth is, we’re only tapping a small part of the global market so far.”

So far, the Claim Genius platform is used by about two dozen insurance companies globally, some of which are the largest in their region. India has been one of the fastest-growing markets.

In the U.S., some of the largest insurers are building out similar AI systems themselves. However, some of the midtier companies have been convinced that pairing up with a company such as Claim Genius is preferable to going it alone.

“We’ve had several that initially said, ‘No, we’re going to do our own thing,’ only to later come back and say, ‘There’s too much here to do ourselves, so we’re going to work with you instead,’” he said. “Between the AI investment and model training, the barriers to entry are high.”

Insurance companies, largely due to the nature of their industry, take a conservative approach to business, MacDonald added.

And creating a platform that has been fed enough real-world examples to figure out what damage looks like on different vehicles and associated repair costs is no minor undertaking.

“Even with training (our system) on more than a million past claims … you’re not covering every possible scenario under the sun,” MacDonald said. “There’s going to be that weird accident captured with a bad camera at night in a snowstorm. Those are the edge cases where the AI doesn’t do great. But, that’s also where it’s going to get better over time.”

MacDonald claims that the accuracy offered by algorithmic systems already matches up well, if not better, than what humans reviewing images of potentially damaged vehicles are capable of.

With the precision of AI only increasing — and with the concept of these futuristic platforms gaining popularity as systems like ChatGPT get more press — it’s more of a matter of when, not if, these automated solutions are used by everyone in the insurance industry, according to MacDonald. His prediction is that’ll be within the next 10 years.

As far as what that means for this local company, the firm’s leaders speak as if the sky’s the limit.

As they move from just analyzing claims in their passenger vehicle segment into commercial vehicles such as vans and trucks, the company is expecting four to five times growth within the next couple years. There’s also a lot of potential business in mopeds, scooters and other motorized two-wheelers outside of the U.S. that they anticipate capitalizing on.

If there is a limit on the potential growth, MacDonald said, it’s in the amount of specialized data and AI talent the company will require as it continues scaling.

Fortunately, the Garden State has more of that talent than many other markets, MacDonald added.

“We’ve even had people jump from some of the big names, such as Google, to us,” he said. “We’ve been able to recruit in a way that fueled our growth for the past couple years. And that’s really part of why we’re excited to be here in New Jersey, taking our vision forward.”