Project EMPATH
By Sophie Fujiwara, Gloria Liu, Irene Alisjahbana, & Noah Jacobson
Executive Summary
Project EMPATH (Estimating and Managing Possessions by Addressing Trauma for Homeowners) sets out to reshape the itemizing process to be customer-centric, where we prioritize their emotional and financial needs.
Our Proposal
Abandoning the current complicated method of itemization, we envision a future of home insurance that reduces the trauma gap. We aim to answer the question:
How might we create a more reliable and efficient itemizing process for both homeowners and insurers that will help homeowners gain closure after experiencing potential trauma?
To address this question, project EMPATH is divided into two phases: pre-disaster and post-disaster.
For the pre-disaster phase, customers take a 360o photo or LiDAR scan of their home, which takes an insignificant amount of the customer’s time. This is a requirement in the insurance policy, along with an annually updated photo or scan. We hope that this will significantly reduce the amount of effort and stress that customers undergo post-disaster.
Next, the insurer will automatically itemize and classify the items based on the customer’s scans using computer vision and AI techniques. This will need to be transparently communicated to the customers and will act as a baseline of the total value of their home if a disaster were to happen.
For the post-disaster phase, we first ensure that customers have immediate cash flow. As a Paradise resident said, “there were just so many other things we were dealing with”. Therefore, in our solution, insurers would initiate the claim process, instead of customers, and use data from their last inventory to determine the value of this immediate cash flow. By doing this, customers open on a positive note with their insurance and have a short-term security net, thus reducing even more stress. It is similar to parametric insurance, but the value for each customer is individually calculated.
Then, insurance companies would perform validation and valuation checks of the customer’s belongings. Customers would be shown LiDAR scans of their homes pre-disaster using VR devices in the presence of therapists. At the same time, brain scans are performed to measure the customer’s affinity to each belonging. This way, the value of highly personal or unaccounted items (from the pre-disaster scans) can be determined. Throughout this whole process, the therapist is right next to the customer to help them through their trauma and mitigate any additional trauma.
From the insurers’ perspective, insurance companies can continually develop mapping between customers’ brain activity and the value of items that can be used to learn about what’s important to the customers. By creating more accurate valuations that reflect the customer values, the insurance companies can increase customer satisfaction in the long run.
Finally, the claim is settled and the trauma gap is reduced. We believe project EMPATH will enable customers to collect 100% of the value covered by their insurance policy without additional trauma and tedium associated with the itemizing process that is in place now. Furthermore, we believe that through project EMPATH, customers will receive the closure needed to move on from a devastating disaster.
Conclusion
Though we are limited by technology that currently exists, we envision a future where our solution can be performed in a single step. Instead of engaging customers both pre-disaster and post-disaster, we envision a single post-disaster step. This solution involves technology so advanced that we can extract memories directly from the customer (similar to Neuralink). This eradicates the need to pre-empt itemization.
Throughout this process, a therapist would still be with the customer every step of the way to ensure that the customer gains closure about the disaster and loss of their home.
Regardless of the technology, we envision a future in which the mental health and well-being of customers are prioritized by insurance companies. We envision a future in which customers can receive a fair payout without triggering additional trauma.
On June 3rd, 2021 the Redesigning Finance students presented their work via Zoom to a panel of experts working in the finance sector.
