The COVID-19 pandemic has brought home how much people value the human touch, in our business relationships with colleagues and clients almost as much as with family and friends. And this is as true in the premium finance industry as it is anywhere. It's always been a people business, but with anxiety and uncertainty all around, face-to-face meetings an impossibility and spikes in call volumes it's become more important than ever to provide a human connection between companies, brokers, and end users. Never has good communication and customer service been so valued. During this time the pandemic has accelerated digital transformation across the insurance industry. Paradoxically it is technology can meet some of the challenges of providing a human connection, at scale.

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.

What is the impact of artificial intelligence in insurance? Well, there are a lot of use cases for artificial intelligence in everyday life, but what about AI in insurance? The effects of artificial intelligence in business heavily include insurance. Are you scared of AI jargon? We have already created a detailed AI glossary for the most commonly used artificial intelligence terms and explained the basics of artificial intelligence as well as the risks and benefits of artificial intelligence for organizations and others. So, it's time to explore the role of artificial intelligence in insurance sector. One of the most revolutionary advances has been the use of AI in insurance, which has been hailed as having significant economic and societal advantages that eventually boost risk pooling and improve risk reduction, mitigation, and prevention.

You've probably heard the term "digital transformation." From manufacturing to retail to healthcare, commercial businesses across the board have been reshaped by it. When it comes to digital transformation, the insurance business has typically been sluggish to adopt, but now it is more apparent than ever that the time is now. Insurance companies have had to modernize their operations to stay up with the demands of their customers. Today's clients expect businesses to be available whenever and wherever they need them.

Businesses that ensure protection from financial losses and mitigate risk are as old as human civilization. The Code of Hammurabi, King of Babylon, written in 1750-1755 BC, specified the first provision of what we now know as marine insurance. In the wake of the Great Fire of London in 1666, Sir Christopher Wren included the provision of an "insurance office" in his new plan for the city of London. Today, the global insurance market is estimated to be a $ 5,550,310 million industry consisting of major commercial life insurance, non-life insurance, health insurance and health insurance companies. Against this backdrop, a new wave of "InsurTech" solution companies is exploring transformation of the insurance business through the introduction of big data, machine learning and AI capabilities.

Big-four bank Standard Bank is using artificial intelligence (AI) and machine learning to predict those clients likely to cancel their insurance policies. The initiative by Standard Bank's insurance business, aimed at democratising data science and improving client service, was recently recognised by US technology giant Microsoft. Last year, the bank told ITWeb it is also dabbling with blockchain technology to process motor vehicle claims. A recent report by consultancy firm Mckinsey says AI and its related technologies will have a seismic impact on all aspects of the insurance industry, from distribution to underwriting and pricing to claims. Using AI and machine learning, a cross-functional Standard Bank team has developed a model that allows the insurance business to predict which clients are likely to cancel their policies, among other use cases. In an interview with ITWeb last week, Dharmesh Kalain, head of business intelligence for insurance at Standard Bank, said this is part of an ongoing programme to develop "self-service analytics" capabilities within the bank, whereby employees are able to analyse data and generate insights – even if they are not data specialists or data scientists.

It is no surprise that the insurance sector at large has been guilty of negligence at one particular front, industry Innovation. Although, Insurtech startups have come thick and fast in the nick of time, yet their broad impact on the industry is marginal at best and meager otherwise. Given the era of uncertainty that we are scraping through, the rate of innovation in insurance segments needs to pick up if the underwriters of today are to thrive tomorrow. In this article, we'll be focusing on the possible measures they can implement to do so. Insurance is not the ball game it once used to be when the incoming customer used to feel indebted to a company for assured support in challenging times.

"We're a world leading artificial intelligence (AI) platform that monitors real time and real-world events and provides all-round risk detection and solutions," Rod Moynihan told Insurance Business. Moynihan is the managing director of Dataminr in Australia and New Zealand, a global real-time information discovery company that is pioneering what it sees as ground-breaking technology for detecting, classifying, and determining the significance of public information in real time. Moynihan recently gave an interview to Insurance Business to explain how the platform works and how it can aid insurers. Using public information and data available from across the world, Dataminr's AI platform finds, dissects and quantifies a large amount of data to make sense of potentially large impact events that can affect customers. "It sorts through millions upon millions of publicly available data," explained Moynihan.

Nigel Cade, managing director of The Insurance Claims Service Centre, explained to Insurance Business the innovative ways in which Artificial Intelligence (AI) can be used to help detect and prevent fraudulent claims, but also that a'fraud fighting culture' needs to be present to properly utilise the software. "There is often a zero-tolerance policy, but not necessarily a fraud fighting culture in place," Cade explained. "I don't think that the industry is yet to deal that well with fraud at all." Cade spoke to Insurance Business in anticipation of his presentation on the topic at the TechFest in May. Fraud, he said, was still a pressing issue that the insurance industry must grapple with. "It's huge – it's a huge problem still," he said.

This article was originally published in the Autumn 2019 issue of The Record. Subscribe for FREE here to get the next issues delivered directly to your inbox. How are insurance firms using the cloud and artificial intelligence (AI) to understand customers' needs and create personalised experiences? Amy Stokes-Waters, new business sales executive, Identity Experts: People love to be independent and are increasingly turning to mobile apps for self-service across a range of products, insurance being no exception. Insurance firms are having to invest heavily in cloud technologies to keep up with consumer want for on-demand information and simplified communications in our mobile-first society.