In 2013, an algorithm determined Eric Loomis' six-year prison sentence in Wisconsin for attempting to flee a traffic officer and operating a motor vehicle without the owner's consent. No one knew how the software, Correctional Offender Management Profiling for Alternative Sanctions, or COMPAS, worked--not even the judge who delivered the sentence. Analyses conducted by ProPublica later found the predictive artificial intelligence used in this case, which attempts to gauge the likelihood of an offender committing another crime, to be racially biased: A two-year study involving 10,000 defendants found that the A.I. routinely overestimated the likelihood of recidivism among black defendants and underestimated it among whites. The U.S. Supreme Court declined to review Eric Loomis' case, so the sentence stands. Increasingly, A.I. has the power to alter the course of people's lives.

For an industry that has proven resistant to change for centuries, insurance is now undergoing a digital revolution. With the advent of more machine learning algorithms, underwriters are bringing in more information to better gauge risk and offer more tailor-made premium pricing. On the back end, the insurance process is being streamlined to connect applicants with carriers more efficiently and with fewer errors. This drastic level of rapid change means big things for insurers and applicants alike. Here's how artificial intelligence, or AI, is on the frontier of the insurance industry and where it might be heading in years to come.