An Overview of Developmental AI Trends in the Insurance Market Landscape

By Insurance CIO Outlook | Friday, August 09, 2019

Experts predict that artificial intelligence could be the driving force, changing the dynamics of insurance, from fraud detection to improving client experience.

FERMONT, CA: AI radically transforms the Insurance industry. From product design, underwriting, and claims to chatbots for customer service, risk assessments, and quotations, technology is implemented across the industry to deliver quicker, and more precise services. With the new wave of deep learning methods like convolutional neural networks, AI can live up to its promise of imitating the human mind's perception, reasoning, learning, and problem-solving. In this evolution, insurance will change from its present state of "detecting and repairing" to "predicting and preventing," transforming the process into every aspect of the sector. Here are four key technology developments that are closely linked to AI, which will radically change the insurance industry in the next decade.

The explosion of Data From Connected Devices

Equipment with sensors has been omnipresent in industrial environments for some moment, but there will be an enormous rise in the number of connected consumer appliances in the coming years. With fresh, increasing categories such as clothing, eyewear, home appliances, medical devices, and shoes, the penetration of current devices will continue to proliferate. The resulting avalanche of new information generated by these systems will enable carriers to comprehend their customers better, leading in new product categories, more customized pricing, and more real-time service delivery.

Increased Prevalence of Physical Robotics

Recently, many exciting accomplishments have been seen in the field of robotics, and this innovation will continue to alter how people communicate with the globe around them. Additive manufacturing (3-D printing) will radically reshape future production and business insurance products. By 2025, 3-D-printed structures will be prevalent, and carriers will have to evaluate how this development will change risk assessments.

Open Source and Data Ecosystems

As data becomes omnipresent, open-source protocols will arise to guarantee that information across sectors can be shared and used. Within a prevalent regulatory and cybersecurity structure, various government and private organizations will come together to develop ecosystems to share information for multiple use cases. For instance, wearable information could be transmitted directly to insurance carriers, and connected home and auto information could be made accessible through a multitude of suppliers of consumer devices.

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New Advents in Cognitive Technologies

Convolutional neural networks used for the processing of pictures, voice, and unstructured text will evolve to be applied in a wide variety of apps. These cognitive techniques, loosely based on the capacity of the human brain to learn through decomposition and inference, will become the standard method for processing the vast and complicated information streams produced by "active" insurance goods linked to the conduct and operations of an individual. As these kinds of systems are increasingly commercialized, carriers will have access to models that are continually learning and adjusting to the globe around them — enabling new product categories and commitment methods while reacting to changes in major hazards or behaviors in actual time.

As AI is more deeply incorporated into the sector, carriers will be able to react to the evolving company landscape. Insurance managers need to know the factors contributing to this shift and how AI will reshape claims, allocation, and underwriting and pricing. With this knowledge, they can begin building abilities and talent, embracing evolving technologies, and creating the culture and outlook required to be active players in the future insurance industry.

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