AI Policy Comparison Tools: Powerful Resource or Potential E&O Trap? 

Artificial intelligence (AI) continues to find new applications within insurance agencies – and one of the most discussed uses is policy comparison. Whether reviewing renewal changes, comparing competing carrier proposals, or identifying coverage differences between policy forms, AI-powered tools promise to reduce the time required to analyze lengthy insurance documents.

Today, agencies generally have two options. Some are utilizing general-purpose Generative AI (GenAI) platforms such as ChatGPT, Claude, Gemini, and Microsoft Copilot, while others are investing in insurance-specific policy comparison platforms that have been developed specifically for the review of insurance contracts and coverage documents. While both approaches can provide value, they are not the same thing, and understanding the differences is vital.

Using Generative AI for Policy Comparisons
General-purpose GenAI tools such as ChatGPT, Claude, Gemini, and Microsoft Copilot are being used by some agencies to assist with policy reviews. While these platforms were not specifically designed to analyze insurance contracts, many agents are experimenting with them to streamline policy comparisons and renewal reviews. Common uses include:

• Comparing expiring and renewal policies
• Summarizing endorsements
• Identifying changes in policy language
• Preparing internal coverage comparison reports
• Drafting summaries of coverage changes for client discussions

The appeal is obvious. Tasks that might take hours to complete manually can often be performed in minutes, allowing agency personnel to focus their attention on the areas where changes appear to exist.

However, agencies should remember that these tools were not specifically designed to analyze insurance contracts. They are language models that generate responses based on patterns in the data on which they were trained. While they may identify many meaningful differences, they can also:

• Miss important changes
• Misinterpret policy language
• Fail to recognize interactions between endorsements
• Overlook coverage restrictions
• Generate inaccurate or incomplete conclusions
• Present an answer with a high degree of confidence even when the analysis is incorrect

One factor often overlooked when using Generative AI for policy comparisons is that the quality of the analysis can be heavily influenced by the instructions provided to the AI.

For example, a prompt such as:

“Compare these two policies.”

may produce a very different result than:

“Compare these two policies and identify changes to coverage grants, exclusions, definitions, conditions, limits, deductibles, and endorsements. Highlight any changes that could reduce coverage.”

The more specific the instructions, the more likely the AI is to focus on the areas of greatest interest.

In addition, agencies should carefully consider privacy and security issues before uploading policies and customer information into any GenAI platform. Understanding how the vendor stores, uses, shares and protects submitted information, including any differences based on the product or service tier in use, remains an essential part of the due diligence process.

Insurance-Specific Policy Comparison Platforms
Recognizing the demand for more sophisticated insurance analysis, a number of vendors have developed policy comparison tools specifically for insurance agencies, brokers, underwriters, and risk managers. Unlike general-purpose GenAI platforms, these solutions are designed to evaluate insurance documents and identify differences in a structured manner.

One important consideration is that not all policy comparison platforms provide the same level of analysis. Capabilities often vary based on the vendor selected and the level of service purchased.

Basic Comparison Tools
These solutions typically focus on structured policy information such as:

• Named insureds
• Policy periods
• Covered locations
• Limits
• Deductibles
• Forms and endorsements attached to the policy

These tools can quickly identify changes in declarations information and may alert users when forms have been added, removed, or replaced.

Intermediate Comparison Tools
More advanced platforms may review and compare policy wording itself, highlighting:

• Added language
• Deleted language
• Changes to definitions
• Modified exclusions
• Changes to conditions
• Revisions to coverage grants

This level of analysis can significantly improve efficiency when reviewing renewal policies and manuscript endorsements.

Advanced AI-Assisted Platforms
Some platforms incorporate artificial intelligence and analytics designed to help users understand the significance of policy changes by:

• Prioritizing material differences
• Identifying potential coverage issues
• Summarizing key changes
• Flagging provisions that warrant additional review
• Generating comparison reports and summaries

While these capabilities can provide substantial value, agencies should recognize that even the most sophisticated platform is still dependent upon its programming, source documents, and analytical assumptions. No software can guarantee that every relevant coverage issue will be identified.

Before relying on any policy comparison platform, agencies should understand:

✓ What documents are being compared

✓ Whether endorsements are fully analyzed or simply inventoried

✓ Whether policy language is reviewed or only declarations information

✓ How differences are identified and prioritized

✓ What limitations, assumptions, or exclusions exist within the software

The key risk management lesson is that policy comparison tools should be viewed as aids to the review process, not replacements for professional judgment. While technology may help agencies work more efficiently, reliance on AI generated information does not relieve agencies of their responsibilities under applicable law or the circumstances of the customer relationship. If an AI-generated comparison contains errors or omissions, the agency may still face an E&O claim arising from its reliance on that information.

Should AI-Generated Comparisons Be Shared with Clients?
While AI-generated policy comparisons may be useful internal review tools, agencies should carefully consider whether those reports should be provided directly to insureds.

One concern is that providing a detailed comparison report may create expectations regarding the scope of the agency’s review. An insured receiving a multi-page comparison of policy forms, endorsements, and coverage provisions may reasonably believe the agency conducted a comprehensive analysis of all policy differences.

If a significant coverage restriction, exclusion, or endorsement is later overlooked, the comparison itself could become evidence in an E&O claim. A claimant may argue that the agency undertook a detailed review of the policy and failed to identify an important change that should have been brought to the insured’s attention.

Agencies should also remember that AI-generated comparisons are not infallible. Whether produced by a general-purpose GenAI platform or an insurance-specific comparison tool, the output may be incomplete, inaccurate, or fail to recognize how multiple policy provisions interact. Providing those reports to clients may increase the likelihood that the insured relies on information that was never intended to serve as a complete coverage analysis.

From an E&O perspective, AI-generated policy comparisons are most appropriately used as internal review documents. Providing these reports directly to insureds may create the impression that the agency conducted a comprehensive review of all policy changes and identified every material difference, potentially increasing expectations beyond the traditional standard of care applicable in their state.

Conclusion
Policy comparison tools may help identify potential differences. Determining which differences matter and how they impact the insured still requires human judgment. As AI continues to evolve, agencies that use these tools thoughtfully and maintain appropriate oversight will be best positioned to realize the benefits while managing the risks. 

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E&O RISK MANAGEMENT: Carrier Downgrade Resources 

Do you know what to do if one of your carriers has a downgrade to their financial status? Utica National’s E&O Risk Management website has a number of useful items to help you navigate a carrier rating downgrade, including:

• an article with guidance on how to handle accounts that are placed with the downgraded carrier,
• a sample letter to communicate to clients about the downgrade, and
• a sample carrier downgrade acknowledgement form.

To access our risk management site, log in to our online Customer Care Center, and then click “Risk Management.”

Not yet registered for Customer Care? CLICK HERE for details on how to sign up for Customer Care.