The insurance industry has already deployed AI to streamline big data, claims and serve the gig economy
AI is ready now to transform insurance, providing the potential benefits are worth the investment.
This is according to a AON’s Global Insurance Market report “Artificial Intelligence is the new electricity”.
Within the report an article entitled “Demystifying Artificial Intelligence” debates what solutions it offers the insurance sector.
Its author, AON Benfield’s managing director in the analytics division of reinsurance solutions, Paul Eaton, pointed out that as AI changes the world it will “necessarily rewrite the rules of insurance.”
He said that applying AI is an “incremental step” forward in models and data used in business as it is “conceptually compatible” with insurance carriers.
It proposes two considerations of AI adoption in insurance. Firstly that “insurers are already good at AI or its precursor technologies.”
Natural language processing and image recognition are machine learning implementations, both of which use predictive models to achieve results.
Secondly that a “risk-cost-benefit analysis” is needed to determine whether it is worth the investment.
Eaton said: “Our view is that carriers’ success with AI requires three key ingredients: data, infrastructure, and talent.”
He explained that AI might unlock the problem of big data, allowing insurers to sort through large amounts of data efficiently.
He added: “Insurance has long been an industry of data, and carriers are presumed to have meaningful datasets in claims, applications, and marketing, among others.”
Suggesting a working infrastructure to assess what data specifically will feed AI, he pointed out that in-house expertise is not required to implement it.
Accenture’s Future Workforce Survey (May 2018), “Insurance: Realizing the full Value of AI” found that insurers who commit to AI and human-machine collaboration at the same rate as top performing businesses could boost revenue by 17% on average by 2022.
Insurers such as Ageas have already jumped on board using AI to manage motor claims and Hiscox partnered with AI startup Eigen earlier this month to slash its costs and improve internal data processes.
Whilst the definition of AI is somewhat “vague”, Eaton added: “AI is hungry; hungry for data, of course. But also hungry for systems that can be automated and for proprietary classification problems that can be improved.
“That places insurance right in the appetite of artificial intelligence and its promise of transformation.”
And Devin Wenig, chief executive at eBay, commented: “If you don’t have an AI strategy, you are going to die in the world that’s coming.”
Eaton’s article is part of a series of releases from AON that are published throughout the year. It originally launched in September 2015.
Michael Lewis, chief executive at Claim Technology, will be speaking at Insurance 2025 about using AI to transform the claims process and his bot, Robin. Janthana Kaenprakhamroy, founder and chief executive of Tapoly, will speak about AI and the gig economy.
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