The automation of SME insurance, successful partnerships, and better education about the capabilities and limitations of AI were key discussion points during ‘The Impact of AI on Insurance’ panel at CogX 2018.
Cytora CEO and co-founder, Richard Hartley, offered his views on these topics at the CogX 2018 Conference, held in London earlier this month. Other panellists included Ashish Umre, Head of AI at XL Catlin, Reza Khorshidi, Chief Scientist at AIG, and Kim Nilsson, CEO and Co-Founder at Pivigo.
Where is AI having the largest impact on insurance right now?
Predicting and pricing risk, understanding new markets, and improved operational efficiency were all identified as the largest areas of impact.
“The biggest impact AI is having on insurance right now is on the pricing and automation of SME insurance. Commercial insurance today is costly to deliver, which means customers end up paying too much for cover. We can reduce this cost using data and AI,” said Cytora CEO Richard Hartley.
“AI is highly effective at predicting largely homogenous, high-frequency risks where external data is abundant. This is where AI can be most impactful and performant.” Hartley went on to say that for complex, heterogeneous risks such as chemical plants, AI cannot replace detailed and specialised human analysis.
Kim Nilsson discussed how using AI to improve customer segmentation could drive significant bottom-line benefits for insurers, and Reza Khorshidi identified using sensors and machine learning to understand and prevent dynamic aspects of risk such as traffic accidents as a key area of impact.
Creating successful partnerships between carriers and insurtechs
The panel agreed that for large insurers looking to integrate AI into their business processes, building out their own specialised team can be incredibly challenging. Insurers should focus on partnering with insurtechs with full stack products who can offer deep technical expertise, and build small and nimble teams internally to initiate changes.
“Show and tell is important. People need to understand new technology and how it works. A great way to do this is to partner with innovators who have the expertise and knowledge,” said Ashish Umre.