From Smart Algorithms to Smart Contracts

This article is part of Carrier Management’s series on the Future of Insurance.

Chris Cheatham, the Co-Founder and CEO of RiskGenius, traces a path from using machine learning to break down insurance policy clauses and financial data to ultimately enabling smart contracts using blockchain technology.

Chris Cheatham, CEO, RiskGenius

Chris Cheatham leads a team focused on developing the RiskGenius product. http://riskgenius.com/

Under his leadership, RiskGenius is empowering insurance professionals (underwriters, brokers and everyone in between) to review insurance policies faster with Technology Enabled Policy Review. Powered by machine learning and natural language processing, Technology Enabled Policy Review breaks insurance policies down into categorized clauses.

Cheatham previously worked as a claim insurance attorney for five years in Washington, D.C. He holds a bachelor’s degree in political science from the University of Kansas and a juris doctorate from the University of Texas at Austin.

Q: What major changes do you see on the horizon for the property/casualty insurance industry in the next 10 years?

Cheatham (RiskGenius): I focus on insurance policies (forms, endorsements, declaration pages) because I believe they are the most important part of an insurance transaction. Most parties to an insurance policy don’t really know what is in their policies. Carriers struggle to keep track of their forms and endorsements; brokers can’t identify changes to policies fast enough; regulators have trouble approving new products in a timely fashion; and consumers don’t bother reading their policies.

I think all of this is about to change.

We are on the tail end of insurance companies going “digital.” Most policy documents are now electronic. But these policy documents contain unstructured data—both the clauses and the financial data. This means that insurance professionals have trouble locating and understanding the information in a policy.

All of this is about to change because of machine learning. With smart algorithms, insurance policies will be broken down into clauses and financial data. In the short term, this means more parties will be able to review and understand insurance policies in a timely fashion. In the long term, this will enable true “smart contracts” as individual clauses and limits are tied to the blockchain and IoT.

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