Later On

A blog written for those whose interests more or less match mine.

AI and big data transform insurance

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Mike Allen has an interesting column of miscellaneous news items that catch his eye, and I thought this item was particularly intriguing:

AI and data science are transforming life insurance — one of the oldest industries in existence, Axios Future correspondent Bryan Walsh writes.

  • With a business model built on predicting the future of its customers, the industry is digging into the prognostication powers of machine learning.
  • Impediments include the industry’s ingrained conservatism — and the dangers of AI bias.

How it works: McKinsey report envisions a near future where AI has shifted the insurance industry from the traditional “detect and repair” to “predict and prevent,” with active insurance policies that respond in real time to changing customer behavior.

  • Tools include drones, data collected by the internet of things — sensors and software behind smart appliances, for instance.
  • Information from such devices will allow insurance companies to “provide personalized wellness products and care suggestions,” according to a separate McKinsey report.

Startups are disrupting the giants:

  • Lemonade — which last year became the first “insurtech” company to go public — overhauls the hassle of buying insurance, with a digital-first interface and machine-learning analytics.
  • Legacy life insurance providers use frozen-in-time actuarial tables to write policies. Insurtech companies like Traffk draw on thousands of data points to provide a more personalized analysis.

What we’re watching: Some experts worry more precise insurance rates set by AI could end up discriminating against certain groups, which in turn could draw the attention of regulators.

Written by Leisureguy

24 April 2021 at 11:31 am

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