Timetric: What the AI revolution will mean for insurance
Ben Carey-Evans, InsurTech analyst at Timetric’s Insurance Intelligence Center, examines what the AI revolutiion will mean for insurance
AI has become increasingly prominent since it evolved from somewhat of a gimmick at the start of the 21st century – beating the chess world champion, for example – into an essential part of modern-day business.
Multi-national technology companies, such as Amazon and Google, have already made strides in utilising the technology.
Writer and public speaker on AI, Calum Chace, emphasised the impact it has had for these large companies: “It [AI] has been seriously impressive already for Google Search and Translate, which completely transformed last September, when it started using deep learning, image recognition for Facebook too. The tech giants in China and in the States are using it very successfully.”
Rajinder Tumber, a cyber security specialist and Parliament committee member on AI, made similar comments on AI’s increasing role in modern life: “AI is becoming integrated within our lives, affecting how we live, work and play, from voice-activated assistants – Apple’s Siri, for example – to autonomous self-driving cars.”
However, there is a slightly different picture in the insurance industry, which is, barring a few cases, monitoring the situation from a safe distance. There have been a few examples of large insurers making deals and partnerships with technology companies, or experimenting with AI, but generally speaking, the only real impact has been in customer service – namely chatbots – to date.
Insurers’ AI activity
Things may be starting to shift though, Ageas announced in May 2017 that it will begin adopting AI technology for claims handling and Aviva committed to supporting AI-based start-up, Shepherd in July 2017.
These are two recent examples emphasising large insurers are beginning to take notice and that AI will become more commonplace in the very near future.
There are particular lines of insurance where integration is clearer, and there has been development and trials in some lines.
Insurance partner and London market leader at PWC, Paul Delbridge, explains: “The insurance industry is at a relatively embryonic stage of its deployment of AI. Lines of business where there are vast volumes of available data are the most obvious areas to start with, such as private motor and household insurance.
“AI can be used to help estimate motor accident repair costs, or to monitor sensors within the connected home, and then to trigger a response in the event of a burst pipe, for example.”
The most disruptive aspect of AI is undoubtedly driverless cars and its potential impact on the motor insurance industry.
Firstly, the very need for insurance comes into question when human error can be eliminated from driving and the way it operates will almost certainly have to change.
One of the most likely causes of claims if driverless cars become commonplace could be due to hacking and cyber security could therefore become a key part of any motor insurance policy.