Machine learning and Artificial Intelligence (AI) have been used by the insurance industry for more than a decade, yet this fast-moving technology is ever-changing, continually reshaping the form and function of the insurance process. Insurance companies use AI "to make their business more efficient," says Kathleen Birrane, Maryland Insurance Commissioner and the chair of innovation, cybersecurity, and technology committee at the National Association of Insurance Commissioners. "They use it in the underwriting process and in evaluating where the risk is in the claims process. There is no part of the process that doesn't use this technology." AI is simply the technology of computers simulating human reasoning by analyzing masses of historical data.

With its complex rules, detailed fine print, and lengthy processes, it's little wonder that the insurance industry has an extremely poor reputation when it comes to trust and customer service. A recent global survey ranked insurance companies lower than car manufacturers, ecommerce sites, supermarkets and even banks for trustworthiness. Perhaps it's because the insurance industry is one of the least innovative areas for customer service that people distrust it. Let's face it, it isn't often that someone gets off the phone to an insurance company feeling encouraged and motivated. This is all changing though as AI and insurance become more acquainted.

Do you have car insurance? Chances are you are a customer of at least one insurance company and a policyholder on one or more types of insurance. If so, you should pay particular attention to the fact that the global insurance industry is seeking to harness artificial intelligence solutions. While the use of AI technologies in insurance has the potential to streamline company operations and reduce consumer prices, it also raises unprecedented new issues related to personal privacy. As with many discussions of artificial intelligence, understanding its impact starts with understanding data.