Ten years ago—has it been that long?—I was working with the largest insurer of churches and religious institutions in the US when we discovered they were incurring an average of $70 million in annual losses from frozen pipes.
It makes sense. Many houses of worship sit empty most of the time, and in the northern half of the country—where most of this carrier's book was concentrated—a power outage or failing furnace leads to frozen pipes, burst lines, and substantial water damage claims.
So we built an IoT service that monitored furnace activity and water pipe temperatures, complete with a call center to alert policyholders before problems escalated. It worked so well that it survives today: insureds receive annual premium discounts for enrolling, and frozen pipe claims have dropped over one-third.
That experience in continuous risk management sparked my fascination with the next frontier: continuous underwriting. In my view, there's no reason insurance premiums shouldn't fluctuate daily—like stock prices or utility bills—as new risk data emerges.
Frustratingly, there are exactly two reasons they don't: regulation and reinsurance.
Tesla Insurance: A Case Study in Market Inertia
Tesla Insurance launched in 2019 in California, leveraging real-time telematics data from connected vehicles to offer up to 30% lower premiums through a Safety Score algorithm that tracks behaviors like hard braking and collision warnings. The system performs real-time scoring—true continuous underwriting—and adjusts premiums monthly.
Today, Tesla Insurance operates in just 12 states. Twelve states in six years represent a glacial pace for a company built on speed, underscoring how state-by-state regulatory approvals and legal roadblocks stifle algorithmic pricing scalability. Elon Musk has joked that SpaceX will reach Mars before Tesla Insurance writes business in all 50 states—a sadly ironic quip, since the technology for continuous underwriting already exists.
Then there's reinsurance. Earlier this year, Tesla accelerated its pivot toward vertical integration by launching full in-house underwriting for California policies, marking a strategic departure from third-party partners like State National Insurance (a Markel subsidiary). This move gives Tesla direct control over risk assessment, pricing, and policy issuance—despite California's Proposition 103 restrictions on dynamic telematics pricing.
This operational autonomy does two critical things: it eliminates reinsurance constraints—such as conservative loss ratio caps that previously stifled Tesla FSD-linked innovations—and positions the company for national expansion, with pilots already running in Texas and Illinois. By year-end, in-house underwriting will cover 40% of Tesla's $1.2 billion premium base.
Cyber Insurance: A Case Study in Market Necessity
Cyber underwriting has traditionally relied on static annual assessments, but accelerating threat velocity—in the first half of '25, incidents grew by 49% YoY—demands a shift to continuous underwriting. Real-time data from AI-driven tools like open-source intelligence (OSINT) scanning and attack surface risk management (ASRM) enables dynamic risk evaluation and premium adjustments.
Cyber insurtechs such as Cowbell are transforming underwriting from a snapshot into a living process. They report a threefold reduction in claims through proactive remediation and adaptive policies tied to evolving security postures.
These cyber insurtechs focus almost exclusively on the SME segment—businesses with less than $1 billion in revenue, fewer than 1,000 employees, and, crucially, simpler IT environments than large enterprises. They're also proactive. Cowbell, for instance, actively monitors and underwrites risk for over 31 million SME entities using continuous external attack-surface scanning (their Cowbell Factors), often before a quote is even requested. This makes them one of the clearest real-world examples of continuous underwriting operating at scale in the small-and-mid-market commercial segment.
Regulation is actually helping here, pressuring carriers to verify real-time adherence to baseline security standards like multi-factor authentication through tools such as Endpoint Detection and Response (EDR) and Managed Detection and Response (MDR).
Reinsurance innovation is providing capacity. Leaders like Munich Re and Swiss Re are investing in advanced modeling and proportional treaties that favor data-rich, quota-share structures—lowering capital needs while supporting AI-enhanced risk portfolios.
Continuous underwriting unlocks growth. Projected global cyber premiums are expected to more than double from $14 billion in 2023 to $29 billion by 2027.
The "Big" Fight to Scale
In this corner, the champ: Big Insurance and Big Legal (has anyone not heard of Morgan & Morgan?). They'll spend upwards of $200 million this year lobbying Washington to preserve the McCarran-Ferguson Act of 1945, keeping arcane insurance regulations frozen in place.
In that corner, the challenger: Big Tech. As continuous underwriting—by definition, fully automated—consumes AI data center capacity, the AI hyperscalers are throwing untold millions into the fray.
The majority of insurance consumers—per recent surveys—are rooting for the challenger.
