If you are looking for an answer to the question What is Artificial Intelligence? and you only have a minute, then here's the definition the Association for the Advancement of Artificial Intelligence offers on its home page: "the scientific understanding of the mechanisms underlying thought and intelligent behavior and their embodiment in machines."
However, if you are fortunate enough to have more than a minute, then please get ready to embark upon an exciting journey exploring AI (but beware, it could last a lifetime) …
Top insurance trends where InsurTech is expected to make its mark in the next three years were identified in an Infosys market survey as big data for customer insight and wallet share, cyber security for data protection and compliance, artificial intelligence (AI) for underwriting and automation, and technology for business rules extraction. The financial services sector, including insurers and reinsurers, are among top investors in these technologies and cyber security, big data analytics, enterprise cloud and AI are the four digital technologies most in use by re/insurers today, according to the Infosys digital outlook report. Insurers and reinsurers have been turning to the Internet of Things (IoT) to expand the horizons of actuarial science for measuring and mitigating risk with measures such as including data from automotive sensors, wearable fitness trackers and telematic devices to assess risk and reduce fraud. The industry has become adept at applying new technologies to "both the pitfalls and the opportunities of digital technologies," said Infosys. AI is being used within the insurance industry for compliance risk management and predicting and preventing deviations.
TEL AVIV, Israel--(BUSINESS WIRE)--Earnix Ltd, a leading provider of predictive analytics solutions for the financial services industry, today announced the introduction of its Integrated Machine Learning technology, as an enhancement to the existing insurance software suite. This new capability is designed for demanding, high-performance real-time enterprise production systems, and will deliver a new level of market responsiveness and analytical sophistication to insurers. Several Earnix insurance clients have been using an early version of the technology and have seen significant improvements in their results. Analytics has become an arms race, as insurers around the globe seek to become more data-driven by operationalising real-time analytics and monetising new forms of data such as telematics and the Internet of Things (IoT). The addition of Integrated Machine Learning to the Earnix software suite enables users to excel in this environment, producing better and more accurate insights at speeds that only machine learning algorithms can produce.
While financial institutions are still in the early stages of adopting AI technologies, intelligent machines are expected to become the most defining for the future of institutions in the financial services and insurance industries. In fact, estimates suggest that 75% of insurance executives believe that AI will either significantly alter or completely transform the insurance industry by 2020. Moreover, one-third believe that their own company will be completely transformed by AI within that timeframe. AI is expected to redefine the way financial institutions gain information from and interact with their customers, with the benefits of embedding AI into user interfaces being better data analysis and insight. A range of institutions are already either experimenting or have implemented AI/ML capabilities into various processes, with benefits encompassing improvement of straight-through reconciliation (STR) of incoming payments, higher conversions from service recommendation engine, better understanding of customer behavior and preferences, large-scale automation, etc.
With insure tech boasting a transparent and near instant alternative, a disruptive 21st century beckons for underwriters. Janthana Kaenprakhamroy, CEO and founder of Tapoly, saw a gap in the market when she couldn't find cover for an Airbnb let, which are, by nature, short-term. Freelancing in the so-called'gig economy' is growing, from Uber drivers to Amazon deliverers. This self-employed sector, which also includes many in creative industries like film crews and music producers, is where insurance technology startup Tapoly is aiming to apply artificial intelligence (AI) to big data, to offer short-term insurance in minutes. This is a first for the insurance sector, Kaenprakhamroy says.
The impact of new technologies is being felt across insurance functions at every level. To date, underwriting and pricing capabilities have been most impacted by the more mature technologies – such as predictive analytics, big data, location data and GIS – with adoption also growing in machine learning, artificial intelligence (AI) and sensor-based technologies (with usage-based insurance). Our recent research on the state of digitisation in insurance showed that insurers are most evolved in applying data analytics into the pricing function (especially in motor insurance), although they perceive many benefits for advanced analytics going more into underwriting and other processes such as claims, customer applications, automated form pre-filling and other customer interactions. Although there is currently a gap between the hype of artificial intelligence, and understanding of the training and data needs, it is certainly going to have an increasing impact in the future. There's a growing body of evidence to suggest that the industries that have benefited most from AI have not done so by taking half measures.
Just like financial institutions, insurers are no strangers to leveraging advanced technologies in various aspects of the business. Some of the practical applications of machine learning in the insurance industry include managing broker business, optimizing direct marketing, understanding quote conversion, computing optimal pricing, detecting fraud, claims triage, predicting litigation, targeting inspections and audits, forecasting claims, retaining customers, and, finally, recalibrating prices. Extensive research by Satadru Sengupta, General Manager & Data Scientist, Insurance at DataRobot, explores particular ways machine learning can impact operational efficiency. Let's take a closer look at some interesting examples and partnerships.
Artificial intelligence (AI) is leading a technology revolution across various business verticals and sectors. Insurance is one sector which is also using artificial intelligence to change the way companies carry their businesses and provide better customer services in return. From underwriting insurance policies to offering personalized covers and improving the claim settlement process duration, AI is bringing a powerful orientation to the insurance sector at large.