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) …
Of the seemingly inexhaustible uses of artificial intelligence (AI) in the financial sector, its applications around managing credit risk and optimizing payment services are among the most promising. The proliferation of "smart agents" that handle these tasks is a glimpse of more innovation to come, as AI proves its worth to financial institutions (FIs) in the great reopening. That FIs and enterprises are pouring millions into AI development is not surprising, and where they've been focusing that development shines a light on where AI can do the most good. The April 2020 Unlocking AI Playbook: Credit Risk And Payments edition, done in collaboration with Brighterion, notes that "… banks appear to be applying AI with greater specificity than in the past, suggesting that strong use cases have emerged. Our research shows that 92.9 percent of AI-using FIs are applying it to payment services, and 71.4 percent are doing so in credit underwriting. The latter finding is a marked shift from our 2018 study, in which just 27.3 percent of FIs reported using AI in credit underwriting."
Any agile and aware organization is going to have activities in flux with regard to the fast-changing areas of big data, analytics, and AI. To learn about what the company is doing in the data space, we interviewed Jim Tyo, the company's Chief Data Officer (CDO). He told us that Nationwide has an aggressive level of activity underway, while focusing on the structure and organizational priorities for these important resources through a time of change. Tyo has been the company's CDO since 2016, and he reports to Jim Fowler, who arrived at Nationwide as Chief Information Officer in 2018. Fowler was previously the CIO at GE, and he is bringing in some of the same innovative ideas that GE Digital introduced to that company.
DURBAN - Across the globe, trends in technology, economics and socioeconomics are culminating to disrupt the way entire industries operate and deliver products and services to consumers. When it comes to the impact of technology, there is no industry riper for disruption than the financial services sector, including insurance, which for the longest time remained trapped in outdated product development and delivery models. That has changed, and today we're seeing the pace of change and meaningful innovation in the insurance sector escalating. Not only is the existing insurance model from advice, underwriting, onboarding, risk management, servicing, and claims processing being turned on its head, but new product solutions are now possible for market sectors that have been entirely underserved and marginalised by the formal economy. Until now, most innovation in the insurance sector has been internally focused with little direct value to the customer.
The era of artificial intelligence (AI) is here and is transforming the insurance industry. Will insurers pivot or perish? The answer lies in how they approach this big disruption. Insurance industry executives need to understand that AI's strength is also its flaw. Not being constrained by rules allows for speedy learning, but it also means that AI is learning without the context that more specific programming or human intelligence and judgment would provide.
Insurance technology is evolving and applications of digitisation are only expanding further. One of the most basic problem statement which insurers face is, reducing physical intervention in system driven/ assisted processes. In course of handling day-to-day insurance operations like underwriting, claims processing, policy servicing, etc., insurers are flooded with overwhelming levels of routine, repetitive and operational task; it's automating these tasks that we need to work on. The product or outcome expected is always about adding value. The value in this case is about time of processing and obviously saving cost because of lesser manual intervention.
Developing predictive models that are not integrated greatly diminish their organizational value. The natural place for insights to be delivered is within an insurer's core system and thus, predictive analytics and artificial intelligence will become fundamental components of an insurers core system, creating a smarter insurance organization. To advance business operations, we anticipate insurers to pivot from focusing solely on model development to employing strategies and products to operationalize existing models and enterprise model management. Insurers are striving to meet and exceed consumer expectations through faster, easier and more accurate claims settlements as well as improving time to manually quote, review and bind new business. Insurers are increasingly turning to AI in order to get there.
In insurance, whoever holds the data, holds the power. That's because data is the key to effective risk assessment and underwriting. Big Data and analytics are forcing insurers to adjust their processes when it comes to collecting and using data. With the expansion of the Internet of Things, sensor technology, machine learning and artificial intelligence, there is more information available than ever before. The abundance of data – and the technology used to capture it – is driving profound disruption in the relationship structure of the insurance industry.
Weather-related downtime is one of the most problematic and cost-escalating aspects of any construction process, severely impacting and involving all elements and parties involved. In the UK, approximately 20% of overall build budget is lost due to weather delay. Meanwhile, planning, building and construction are driving to integrate innovative digital technology. The aim is to integrate machine learning where updated data is continuously analysed, providing guidance to everyone involved in a development about what should be done at any given stage. With a platform utilising meteorology, mathematics and machine learning to instantly interrogate intelligent weather data, MetSwift's award-winning AI – developed for weather and natcat risk calculation – brings smart digital tech to counter downtime.
We recently had the opportunity to catch up with Attila Toth, CEO, zesty.ai, the Silver Winner of the 2019 Zurich Innovation World Championship, to discuss how Artificial Intelligence is impacting the Property & Casualty Insurance market across personal and commercial lines. Click the link to have a listen. You can also read the full transcript of the conversation below. With me today is Attila Toth, CEO of zesty.ai Today we have an interesting show planned for you where we're going to talk about the global insurance industry as it undergoes a digital transformation. As insurance companies find themselves trying to make sense of all these new technologies – artificial intelligence, natural language processing, machine learning, computer vision, – understanding the business case for each can be extremely confusing and daunting. With insurance companies being held to higher customer expectations, the time is now to embrace new technologies to leapfrog the competition. Being status quo is no longer an option. Technology is driving diversity across many industries – insurance included – as it reshapes the value chain. Age-old processes are being disrupted, while new market entrants and changing business models are bringing new threats, as well as opportunities for those who act on them. Some of the questions we'll cover today include: What is the value that AI is delivering to the insurance industry, and how are insurance providers reacting to these seismic changes?
The digitization of business is in high gear. Although some sectors have embraced this change, others, including the insurance industry, have been slower to implement advances. While we've previously addressed insurance coverage for artificial intelligence (AI) risks, the risk-averse culture of the insurance industry has been particularly resistant to change in its own business. However, as the buzz and perceived benefit around digitization, advanced analytics, machine learning and, specifically, AI continues to grow, many insurers are starting to take notice. Willis Tower Watson found that $728 million was invested into "insure tech" companies in the first quarter of 2018 across 66 transactions.