Machine Learning: Today and Tomorrow

It is difficult to open an insurance industry newsletter these days without seeing some reference to machine learning or its cousin artificial intelligence and how they will revolutionize the industry. Yet according to Willis Towers Watson's recently released 2019/2020 P&C Insurance Advanced Analytics Survey results, fewer companies have adopted machine learning and artificial intelligence than had planned to do so just two years ago (see the graphic below). In the context of insurance, we're not talking about self-driving cars (though these may have important implications for insurance) or chess-playing computers. We're talking about predicting the outcome of comparatively simple future events: Who will buy what product, which clients are more likely to have what kind of claim, which claim will become complex according to some definition. Analytics have applications across the insurance value chain, from marketing, client acquisition and retention to underwriting, pricing and claims management, as insurers look to squeeze more signal out of their data.