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How Artificial Intelligence will shape our future for insurance


Can you see a future in which sensors in your car immediately let your insurer know when you’ve been in an accident, what the damage is and what the repairs are expected to cost – and then have your insurer arrange for a mechanic to come and fix the car damage immediately?

Or, say there’s a pipe leak in your laundry at home, having sensors connected to the internet that will remotely turn the water off and so avert a possible flood and insurance claim?

AI has become an integral part of our everyday lives, from the way we shop and move around to the way we build our homes. Now it’s set to transform insurance as well.

AI is the technology designed to function as if it has human intelligence.

AI really began to take off over the last ten years, as the age of the Internet of Things (IoT)1 dawned and we have increasingly found ourselves using devices and machines connected to the internet.

A different – and simpler – way to meet your insurance needs

With our devices becoming ever-more technologically refined, it’s the marriage of AI with the IoT that’s predicted to truly transform the experience of the insurance customer.

In the age of AI and IoT such scenarios are possible. According to a recent report from digital solutions company Genpact titled, The dawn of the age of AI in insurance2, “AI is on track to change the insurance industry completely... Within a few years, customers will arrange insurance in minutes with a selfie or a photo of their homes.

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Their cars will report claims for them, their homes will signal that they’re flooding or on fire. AI will notify insurers, arrange suppliers and pay claims. Everything will be automatic, silent and seamlessly connected.”

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IoT to only get bigger

Twenty billion.

That’s how many internet-connected things – washing machines, cars, security systems and so on - global research firm Gartner expects to see in 20203. Which means the potential is huge for the insurance industry4 to more deeply understand an individual customer’s needs, allowing scope for more individualised products, more personalised costs and real-time service delivery.

What about privacy?

To be fully effective, AI needs huge amounts of data. But would you be happy to give your insurer access to your personal data from, say, the connected devices in your home? The majority answer is yes, according to the Genpact report5, which states: “54 per cent of consumers are comfortable with companies using AI to access their personal data to improve the customer experience, up from 30 per cent in 2017”.

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Will this upward trend continue?

It’s likely, and as a result it could lead to increased trust between customers and insurers. The Genpact report suggests insurance will “move away from being just a financial transaction to one where the insurer is actively managing risks and protecting customers and their families”.

With the industry set to transform through new technologies, it’s an idea which seems appropriately intelligent.

 


1 https://towardsdatascience.com/history-of-ai-484a86fc16ef
2 https://www.genpact.com/downloadable-content/insight/the-dawn-of-the-age-of-ai-in-insurance.pdf
3 https://www.gartner.com/imagesrv/books/iot/iotEbook_digital.pdf
4 https://www.mckinsey.com/industries/financial-services/our-insights/insurance-2030-the-impact-of-ai-on-the-future-of-insurance
5 https://www.genpact.com/downloadable-content/insight/the-dawn-of-the-age-of-ai-in-insurance.pdfhttps://www.genpact.com/downloadable-content/insight/the-dawn-of-the-age-of-ai-in-insurance.pdf

The advice on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs. You must decide whether or not it is appropriate, in light of your own circumstances, to act on this advice. You should ensure you obtain and consider the policy wording or Product Disclosure Statement for the policy before you make any decision to buy it.

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