Other parts of this series:
- AI holds the key as insurers bid to ramp up the customer experience
- AI on a big scale will give insurers a huge competitive edge
- AI performs best when blended with other powerful technologies
- Partnerships are vital to insurers’ big AI ambitions
- Digital Factories accelerate big-scale AI installations
AI is most effective when combined with other powerful new technologies such as distributed ledgers, extended reality and quantum computing.
Artificial intelligence (AI) is already beginning to transform how insurers go about their business. It’s starting to improve the customer experience and claims processing substantially.
However, when AI is combined with other powerful emerging technologies, such as extended reality, distributed ledgers and even quantum computing, the results are likely to be astounding. Innovative products and services, previously unimaginable, can be quickly rolled out to customers and a multitude of new revenue streams tapped.
Ping An Insurance, for example, is combining AI with distributed ledger technology (blockchain), together with cloud and big data services, to build powerful new ecosystems. Its Smart City ‘1+N’ platform, for instance, uses such technologies to deliver medical insurance, financial services, education and healthcare information throughout more than 200 cities in China.
Insurers throughout the world are enthusiastically embracing AI and, to a lesser extent, distributed ledgers and extended reality. As I mentioned in an earlier blog post, 29 percent of carriers polled in our global 2019 Technology Vision for Insurance survey have implemented AI in at least one business unit. A similar proportion of carriers, 28 percent, are using or testing distributed ledgers while 37 percent are beginning to work with extended reality. Around a quarter of the insurers we surveyed are piloting one or more of these technologies but have yet to embed them in their businesses.
Quantum computing is still in its infancy. But there’s little doubt that it’s going to boost the number-crunching abilities of organizations enormously. Big benefits for insurers are likely to include improved actuarial simulations for quicker and more accurate pricing as well as enhanced risk assessment and pooling.
“The effects of these powerful technology combinations will go well beyond specific sectors and markets.”
However, it’s when quantum computing is combined with other emerging technologies such as AI, distributed ledgers and extended reality, that its full potential is likely to be unleashed. Cyber-security, with more sophisticated IT applications as well as better insurance cover, is one sector that would benefit greatly from the combination of these new technologies.
The effects of these powerful technology combinations will go well beyond specific sectors and markets. They will shape the post-digital era of business and technology. This era, which is fast coming upon us, will allow insurance products and services to adapt almost instantly to changing customer behaviors and contexts. Already we are seeing hyper-personalized marketing that meets the unique needs of each customer, telematics-driven auto-insurance that rewards safe driving and prompts vehicle maintenance, and parametric travel policies that instantly compensate policyholders if their flight is delayed for more than a couple of hours. Pioneers in this emerging post-digital environment include John Hancock, Farmers Insurance and Nationwide.
To succeed in the post-digital world, insurers should experiment with combinations of the big four emerging technologies – AI, distributed ledgers, extended reality and quantum computing – to identify possible business opportunities. Our research shows that 93 percent of insurers are already experimenting with one or more of these key technologies. What’s more, 71 percent believe that a combination of all four of the technologies will transform, or bring about extensive change, to their businesses.
Insurers need to start aligning their digital infrastructure, IT service policies, skills pool and business strategies to ensure they are ready to compete in the post-digital marketplace.
In my next blog post, I’ll discuss how business partnerships can accelerate insurers’ AI plans. In the meantime, have a look at our 2019 Technology Vision for Insurance survey. It’s packed with important insights into the emerging post-digital era.