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Published 14 April 2020
No longer used solely by innovative technology companies, AI is now of strategic importance to more risk-averse sectors such as healthcare, retail banking, and even insurance. Built upon DAC Beachcroft’s depth of experience in advising across the insurance market, this article explores a few ways in which artificial intelligence is changing the insurance industry.
Artificial intelligence (AI) is an increasingly pervasive aspect of modern life, thanks to its role in a wide variety of applications. The technological advancement and applicability of AI systems has exploded due to, cheaper data storage costs, increased computing resources, and an ever-growing output of – and demand for – consumer data. As such, we expect to see change in several critical aspects of the insurance industry.
Of course, it is important to note that insurance is a large and complex industry. Even in light of the perceived advantages discussed above, insurers may not always find it easy to integrate AI within products or backend systems. A Capgemini survey revealed that as of 2018, only 2 per cent of insurers worldwide have seen full-scale implementation of AI within their business, with a further 34% still in “ideation” stages. Furthermore, there are important ethical considerations which have yet to be addressed, with critics warning that AI could lead to detrimental outcomes, especially in relation to personal data privacy and hyper-personalised risk assessments. While more work needs to be done to understand the various implications of AI in insurance, it nevertheless remains an important and fascinating space to watch.
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