Artificial Intelligence (AI) is increasingly making a major impact on almost every industry today. Thanks to its innovative usage, we can look forward to a future where humans can concentrate on the decision-making processes and leave routine tasks to automation.
As per McKinsey-Insurance 2030 report, the future insurance industry is -” Highly dynamic, usage-based insurance (UBI) products proliferate and are tailored to the behavior of individual consumers. Insurance transitions from a “purchase and annual renewal” model to a continuous cycle, as product offerings constantly adapt to an individual’s behavioral patterns.”
The report also says, four AI trends are going to reshape the future of the Insurance industry:
1.Explosion of data from connected devices:
In the last two years alone, an astonishing 90% of the world’s data has been created. 2.5 quintillion bytes of data are produced by humans every day. With wearables and IoT-enabled devices increasing their market share, the amount of data they can produce in a matter of seconds, is incredible. Experts estimate there will be up to one trillion connected devices by 2025. While perceiving data as the new oil, this data can help businesses better understand their customers, interests, and behavior to cater to their particular needs.
2.Increase prevalence of physical robots:
3D printing has secured its future for building flawless components and massive constructions, and the insurance industry is figuring out the risks associated with it. Drones are used in agricultural assignments for spraying and supervision for a while now and are routing for more complex case studies. By 2030, most of the on-road vehicles will be fully automated with manual controls as an option and insurance companies are closely monitoring these industry-level paradigm shifts to customize insurance plans for every small wearable device to opt-in life security. Thus the impact of AI on the insurance industry is pretty visible.
3.Open source and data ecosystems:
Open source is growing in popularity almost in all industries. Thus with more open-source and community-driven technologies picking up, there is a need for a regulatory framework to eradicate any cyber threats or attacks. Thus, Insurance policies might emerge to secure the data as well as big companies like Google and Apple can own this data and distribute it at a cost to other manufacturers. Thus new data ecosystems are ready to emerge and Insurers are keen on building plans around them.
4.Advances in cognitive technologies:
With huge amounts of data already available, data models that perceive information from audio, image, video, and unstructured data are trained to perfection and in the future, these machine learning and cognitive abilities will have their mark on users’ decision making and business processes.
How insurers can prepare for these changes:
- Stay up to date with AI-related developments and trends
- Be future-ready with coherent strategic plans
- Find ways to channel and commercialize huge amounts of data.
- Choose the right talent and Infrastructure.
With rapid advancements in technology, the coming decade is a game-changer. Companies that plan ahead and use the available data and streamline it for better decision-making insights will lead the game. The impact of AI on the insurance industry is going to be a game changer. Insurers should provide space for cognitive advancements in their frameworks and prepare regulatory plans for claims and processes. Believe that technology is not a threat but an opportunity to try something new.
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