Other parts of this series:
- Smart start-ups are helping insurers wise up to the potential of artificial intelligence
- Savvy start-ups are using artificial intelligence to build insurance products that delight customers
- Insurtech firms point the way to major changes in the insurance industry with their Internet of Things offerings
- Blockchain lures scores of savvy start-ups eager to disrupt the insurance industry
- Insurtech firms are starting to win the hearts of big insurers
Fast-moving start-ups are driving much of the disruption that’s shaking the insurance industry. Artificial intelligence is one of the key technologies they’re harnessing to bring about big changes.
Insurtech start-ups are responsible for much of the digital disruption that’s sweeping the global insurance industry. They’re creating innovative products and services that will change dramatically how insurers conduct business. Investment in insurtech firms more than tripled last year to US$2.6 billion (€2.4 billion), according to researcher CB Insights.
The impact of these highly-focused technology firms is being felt across the insurance industry. Their biggest influence, however, is likely to involve three critical technologies – artificial intelligence, the Internet of Things (IoT) and blockchain. These technologies are going to have an enormous effect not only on the insurance industry, but on the whole of the financial services sector.
Insurers need to be alert to the activities of insurtech firms working with these key technologies. They’ll then be able to respond to disruptive trends and innovations ahead of competitors. Many big insurers and re-insurers are forging ties with tech start-ups by supporting them with early funding. More than 55 such deals, involving among others AXA, Transamerica, American Family, Ping An and MassMutual, have been sealed this year, according to CB Insights. These investments offer insurers a potential head-start over rivals.
Artificial intelligence systems have already started making their mark on the insurance industry. Many insurers are using robotic process automation solutions, which incorporate artificial intelligence, to efficiently capture, process and store vast amounts of data. A few are deploying artificial intelligence systems to analyze customer information and personalize policies as well as to respond to service and sales queries. USAA’s on-line virtual assistant is a good example. It allows USAA members to interact with the company’s website and mobile applications in natural conversational language to complete financial transactions and resolve queries.
The capabilities of artificial intelligence are improving fast thanks to advances in, among other things, machine learning, speech recognition, sentiment analysis and natural language processing.
Several insurtech start-ups are developing artificial intelligence solutions that will help insurers further improve productivity and efficiency. They include:
QuanTemplate: This UK firm offers insurers and brokers a secure online platform for trading risk, regulatory reporting and creating financial models. It uses intelligent analytics technology to consolidate, analyze, model and report on large volumes of data quickly and transparently.
Meteo Protect: A global insurance and reinsurance broker based in France, Meteo Protect uses artificial intelligence to manage weather risks. It provides insurers with weather-related risk services that complement their P&C offerings or corporate solutions. The company also works with reinsurers in the origination and analysis of risk requirements.
Praedicat: Intelligent data analytics is used to analyze millions of scientific journals to recognize and rank emerging risks related to potentially harmful products and substances. Praedicat, a US start-up, offers P&C insurers a modelling platform to help them identify, underwrite and manage systemic liability risk.
InforcePRO: This US firm offers a cloud-based life insurance management system that allows carriers to monitor and mine huge volumes of policy information. Its intelligent analytics technology helps insurers identify “orphan” policies that are no longer serviced by agents and also alerts them to under-performing policies, contracts that will soon expire and changes in customer information that could provide sales or service opportunities.
Shift Technology: French start-up Shift Technology uses artificial intelligence to help insurers identify claims fraud. It provides claims handlers with an intelligent on-line service that flags likely fraud and suggests ways to investigate specific claims. The software-as-a-service system incorporates machine learning and improves as it gains experience.
In my next blog post I’ll discuss some of the insurtech start-ups that are using artificial intelligence to deliver innovative insurance solutions direct to consumers. Until then, have a look at this link. I think you’ll find it useful.