Disrupting the insurance landscape through artificial intelligence and deep learning | Insurtech - ITIJ

Aug 10, 2020

Artificial intelligence and so-called ‘deep learning’ are viewed by many as key game-changers for the next generation of insurers, who are keen to personalise their products and react instantly to customer demands. So, how are these techniques being put to use by the industry? Tony Harrington, Insurtech logs in to find out.

Disrupting the insurance landscape through artificial intelligence and deep learning

It is now an accepted truth across the industry that artificial intelligence (AI), aided by machine learning and an increasing ability to extract patterns from big data, is in the process of transforming virtually all sectors of insurance, from claims automation to fraud identification. Travel insurance is no exception, with some insurers already deploying the technology, even though travel insurance is a unique product – there is no other insurance line that sells so cheaply and risks so much.

A UK-based traveller can buy insurance for under £10, or even get it free with a new bank account, then slip on a step in Houston, Texas, and break their back, and their travel insurance company will be on the hook for the cost of specialist care and support. That £10 premium income has brought with it a multi-million-pound liability. In that sense, travel insurance will continue to be a product that, by its nature, is always going to be at risk of a claim that is wildly disproportionate to the size of the fee charged. AI can’t change that...

Rise of the machines
Life insurance companies are already looking at wearables with interest, and insurtechs are working hard to bring systems to market. Wearables can collect a great deal of information on a person’s state and immediate surroundings; instead of using statistical, historical data, AI looks set to introduce a shift across the insurance sector to models that operate using real-time data to price risk on the fly.

The second trend, robotics, will impact travel in obvious ways, and will be something insurers will have to consider. One can imagine that if self-driving autonomous vehicles become pervasive around the world, travellers choosing to travel in cars driven by other humans may well be regarded as putting themselves at higher risk, generating a commensurate real-time adjustment of the policy price.
Read more...

Source: ITIJ