AI Revolutionizing Insurance Sector: Major Technology Trends
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AI Revolutionizing Insurance Sector: Major Technology Trends

By CIOReview | Tuesday, July 20, 2021

The avalanche of new data generated by these gadgets will enable carriers to understand their customers better, leading to new product categories, more tailored pricing, and increasingly real-time service delivery.

FREMONT, CA: The disruption caused by COVID-19 shifted the timetables for AI adoption by considerably speeding up insurers’ digitalization. The underlying AI technologies are already in use in the workplaces, homes, vehicles, and bodies. Organizations must react almost immediately to accommodate remote workers, extend their digital capabilities to facilitate distribution, and modernize their web channels. While most firms did not engage extensively in AI during the epidemic, the increased emphasis on digital technology and a more substantial openness to embracing change will enable them to integrate AI into their operations.

Over the next decade, the following three major technology trends, strongly associated with (and occasionally facilitated by) AI, will revolutionize the insurance sector.

Eruption of Data from Connected Devices

Sensor-equipped equipment has long been used in industrial settings, but the number of linked consumer products will skyrocket in the coming years. Existing products (such as automobiles, fitness trackers, home assistants, smartphones, and smartwatches) will continue to gain traction, with new, fast-growing categories including clothing, eyewear, home appliances, medical devices, and shoes joining the party. Experts predict that by 2025, there will be one trillion linked devices. The avalanche of new data generated by these gadgets will enable carriers to understand their customers better, leading to new product categories, more tailored pricing, and increasingly real-time service delivery.

Open-Source and Data Ecosystems

Open-source protocols will evolve as data becomes more widespread, ensuring that data may be shared and used across industries. Various public and private institutions will collaborate to form ecosystems that will allow them to share data for various purposes while adhering to a standard regulatory and cybersecurity framework. Wearable data, for example, might be immediately transferred to insurance companies. In contrast, connected-home and auto data may be made available through several consumer product manufacturers.

Cognitive Technology Advancements

Convolutional neural networks and different deep learning technologies, which are currently mainly utilized for image, speech, and unstructured text processing, will grow to be employed in a wide range of applications. These cognitive technologies, based on the human brain’s ability to learn through deconstruction and inference, will become the standard way for processing the massive and complicated data streams created by ‘active’ insurance policies related to a person’s behavior and activities. Carriers will have access to models that continually learn and adapt to the world around them as these technologies become more commercialized, enabling new product categories and engagement tactics while responding in real-time to shifts in underlying risks or behaviors.