The advancement of technology has had profound impacts on almost every global industry in recent years including the insurance sector. Insurance Business has weighed up the potential pros and cons of technological advancement on the insurance industry, highlighting how growth in AI in particular will allow insurers to assess risk more accurately than ever before.
“The power of AI is in its ability to keep sifting through enormous amounts of data, continuously learn from patterns and use these to project scenarios and suggest actions,” Heidi O’Leary, principal consultant at Market Gravity, a proposition design consultancy, told Insurance Business. AI enables insurers to assess risk more accurately, as they have increasing amounts of available data and increasingly sophisticated, learning algorithms to analyse it, O’Leary explained. This enables pricing of individual risks at a more granular level, leading to increasingly personalised and targeted pricing, she added. But about the potential risks? “The proliferation of these technologies also creates added complexity in understanding risk, which may become a major differentiator between the winners and losers,” according to O’Leary.