The Impact Of AI On The Insurance Industry
The concept of automation and robotics may be a topical one in the age of artificial intelligence (IA), but its roots can be traced back to the mid-1950s. In fact, the world’s first industrial robot appeared in 1954, with its skills extending to the transference of items from one location to another over a distance of several feet.
In the current climate, people are concerned that AI technology and robots will destroy a huge number of jobs in the future, creating a scenario with those with manual skills may find it almost impossible to secure work.
In this article, we’ll focus on the impact of AI on the insurance sector and ask how it will change the marketplace in the future.
Current AI Trends In The Insurance Industry?
We tend to focus on the future when we discuss AI, but this neglects the fact that artificial intelligence is already impacting on the insurance sector.
One commonplace trend is the rise of behavioural policy pricing, for example, which utilises Internet of Things (IoT) sensors that collate personalised data from users.
This is then used to reward safer drivers regardless of their demographics, by enabling them to pay less for their automotive insurance and benefits from reduced health premiums if they enjoy an active lifestyle.
The use of such sensors can also contribute to personalised coverage across an array of insurance niches, which in turn creates a seamless and more enjoyable customer experience.
Haulier insurers can also leverage this trend to provide tailored policies that suit specific items and circumstances, with this increasingly popular phenomenon referred to commonly as “on-demand” insurance.
The advent of AI has also created more efficient and streamlined claims processes online, which have simultaneously driven faster and more efficient claims while minimising the risk of fraud being committed.
AI In The Future And Autonomous Cars
Another consideration for vehicle insurance brands is the relentless rise of autonomous cars and trucks, which some experts have predicted will hurt premiums in the sector and change it beyond all recognition.
These assertions are backed by various studies too, particularly with human error estimated to account for a staggering 95% of all automotive accidents out on the road.
A 2015 KPMG report has also predicted that driverless cars will be inherently safer than standard models, creating a scenario where the existing auto insurance industry by could shrink by 60% during the next 25 years.
We must also consider the fact that auto insurance accounts for more than 40% of the industry as a whole, and in this respect there’s little doubt that AI will have a seismic impact on the sector over the coming decades.