Bringing together industry leaders to demystify the role of artificial intelligence in commercial insurance
Last month, we proudly hosted our biggest event to date — the inaugural AI Forum. Produced in collaboration with our knowledge partners, Boston Consulting Group, our ambition was to strip away the hype and discuss the real applications of AI in commercial insurance, with a focus on concrete economic benefits and practical advice for CEOs.
AI Forum attracted industry leaders across insurance, finance, and technology. Speakers included David McMillan – COO, QBE Insurance, Sam White – CEO, Pukka Insure, Siraj Khaliq – Partner at Atomico, and our CEO Richard Hartley.
Richard opened the event with Cytora’s definition of AI:
“We understand AI as the ability for a machine to make an equivalent level of decision to a human, such as a risk selection decision, based on its ability to identify patterns in data.”
We’ve summarised the key learnings and highlights from the day below, and we’ll follow up with insights and useful takeaways from each session over the coming weeks.
The time to act on AI is now
During the first panel session, ‘Using AI to enhance pricing’, our speakers were in agreement that AI is going to be transformative for commercial underwriting, particularly in SME insurance. Panellists suggested that the SME market is on the verge of becoming fully automated due to the homogenous nature of risks and ubiquitous data.
“The time is absolutely now,” said Siraj Khaliq, Partner at Atomico (previously CTO at Climate Corporation). “AI essentially enables us to make better predictions based on the data itself telling you something, rather than having a human interpret the data to come up with imperfect rules and imperfect models … the time is absolutely now, and if it’s not now for you, you may not be around to react once you realise that it is.”
Use AI to optimise efficiency and deliver better customer experiences in insurance
During the second session, ‘How will AI change the structure of the insurance value chain?’, panellists were unanimous in agreeing that the way for CEOs to make progress with AI was to identify well-defined, tractable problems within their organisations, and to attack them directly. Improved customer experiences, better pricing, and improving operational efficiency were identified as good places to start.
“There is going to be a revolution. I believe that in the next 12 to 18 months the whole game is going to change,” said Sam White, CEO at Pukka Insure. “It’s consumers that will drive this, every day they are being offered experiences that are far more appealing than what they are currently using.”
These problems should be tackled by combinations of technical and business teams, not hidden away in R&D rooms. By operating in plain sight, technologists learn from the business expertise, and the resulting solutions are more likely to be valuable and adopted.
Insurtech should be seen as an opportunity, not a threat
During an insightful fireside chat, David McMillan, COO at QBE Insurance, discussed his experiences of integrating new technologies at QBE and in his previous role at Aviva.
Put simply, insurtechs are great at focused technology development applied to specific problems along the insurance value chain. They aren’t as good at replicating insurers’ established advantages of underwriting expertise, scale, capital resource and customer base. Partnership with insurtechs is a great model for benefiting from the outputs of focused R&D activities without assuming the risk of building the solutions in-house.
“Cytora is really helping us to transform the way we price and the way we underwrite, they are also helping us to understand what the future could look like,” said David McMillan.
For insurance CEOs who accept that disruption is inevitable, the challenge is to ‘win the transition’
Those incumbents that thrive will be the ones that foster a culture of innovation, with a DNA of data, embracing the best that insurtech has to offer.
We hope you enjoyed reading some of the highlights from this year’s event. We’ll publish an in-depth review of each session complete with insights and useful takeaways over the coming weeks.
We are already looking forward to AI_Forum 2019 where we plan to increase the size of both the agenda and the venue to bring you more useful dialogue about how AI can be utilised to make insurers more successful and resilient.
For more information about AI_Forum please visit aiforum.io.