Machine learning and the future of insurance – the debate

A.CG: The first and most obvious use of machine learning in insurance is that risk and claims will be calculated by software and decisions to insure or to pay out will be made by software - software, not people - and at least many holders of policies will feel that they are being treated mechanically without due regard to the human nuances of their circumstances. NP: What will be interesting over the next 6-12 months will be AI's compatibility with regulation. The main issue that insurers will have is how heavily regulated the industry is. Regulations will only increase (with the introduction of AI), we also have the Insurance Distribution Directive (IDD) coming in later this year. The senior manager's regime will be coming into the insurance space by the end of this year and extending into early 2019.