Should insurers fear or embrace AI?

Insurance Post Podcast

English - November 15, 2023 04:00 - 25 minutes - 35.1 MB
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In the latest Insurance Post Podcast, Patel said AI was already being used by insurers for risk assessment, data analysis, automatic population of firms, predictive modelling, product design and some personalisation of cover.

She said: “At Aurora, we are one of the first lead algorithmic underwriters in the SME space. "Where we are different from others is we algorithmically underwrite the medium space, mid-sized businesses that have traditionally been underwritten.

Algorithmic underwriting and humans

“Although we don’t have underwriters in the process, we do have risk assessments and portfolio managers continually monitoring the portfolio, tweaking the algorithms, and you do need that human in the loop.

"You won’t ever have a situation where you have got an insurer solely run by a machine with no human in the loop.

Rory Yates, senior vice president of corporate strategy at technology platform EIS, said having a human keeping an eye on things is essential.

Chris Kitchener, vice president of product management at Applied Systems, said he could not discount the existence of an AI insurer without a human in the loop at some point – but at the moment the technology is continuing to evolve.

Vendor perspective

From a vendor perspective, Kitchener said the evolution of AI is accelerating with hackathons and applications that are being created for the insurance industry.

He explained: “It is so easy for us to get enamoured by the word AI. It is only valuable as part of a connected intelligence system. The value is as a co-pilot to what we do every day. It is about augmented intelligence.”

The trio also examine the limitations of the current AI technology, plus the risks and rewards associated with embedding this technology in the insurance value chain in the future.

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