|Disrupting the insurance landscape through artificial intelligence and deep learning|
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.