Dr. Christine Darbelley
Artificial intelligence (AI) is set to profoundly transform the insurance and reinsurance sector, with implications for risk management, operational efficiency, customer experience, and the way products are designed and marketed. How could AI revolutionize these areas?
Too Many Risks or Too Much Data?
Claims histories, policyholder behaviours, climate data, mortality, survival, demographics, disability, unemployment, etc. Insurers compile and record data on all possible risks to predict the future more accurately. This allows insurers to better assess client-related risks, categorise them, adjust premiums accordingly, and prevent potential losses. All this data and statistics are stored, but are they truly being utilised? How can AI sort, clarify, synthesise, and analyse entire columns of numbers without confusion?
In summary, can AI improve risk management for an insurance or reinsurance company?
Is Customer Contact Real or Virtual?
Chatbots and virtual assistants can respond to queries of clients in real time, assist with purchasing insurance policies, manage claims, or even propose personalized products. This enhances efficiency and customer satisfaction while reducing operational costs. Would a customer looking to purchase a life insurance policy feel understood by a virtual assistant? How can AI recommend the best product to a client? How can AI understand a policyholder’s driving habits or health profile to propose the most suitable offers?
In summary, can AI improve the underwriting process?
Can a Cost Become Profitable?
Can internal, repetitive processes such as data entry, file management, risk analysis, claims tracking, damage assessment using photos or videos, and claims settlements be simplified? By reducing administrative burdens, insurers can focus on more strategic tasks. This automation reduces costs, increases speed, and improves overall efficiency. How can AI automate low-value tasks?
In summary, can AI improve customer service?
Is a Client a Test Subject?
Smartwatches reveal a wealth of personal information about a policyholder’s health, physical activity, sleep quality, emotions, mental health, cardiovascular health, and potentially blood pressure, blood sugar levels, CRP, glycated haemoglobin, VO2 max, BMI, etc. These personal details facilitate the creation of more flexible and personalised insurance products. Motor insurance based on actual driving behaviour via sensors and mobile apps enables “pay-as-you-go” insurance. Insurers can analyse data in real time to adjust coverage and premiums based on policyholder behaviour. Would a client be willing to share all their personal data with their insurer? How can AI classify policyholders to assess their risk and charge them the appropriate premium?
In summary, can AI improve risk classification?
Is Software a Good Investor?
Investment strategies, complex financial analyses, profitable investment opportunities, market movements, cash flows, liquidity needs, and reserve management are all highly sensitive matters. How can AI analyse the exposure of insurers in real time and adjust coverage levels?
In summary, can AI improve the stabilising role of insurers?
Is Software a “Fortune Teller”?
The wide range of possible scenarios for natural disasters, cyberattacks, climate change, or pandemics are rare but costly events. Statistics allow simulations for better anticipation. How can AI, using predictive models, identify vulnerabilities in our systems and suggest preventive measures to insurers?
In summary, can AI improve the predictability of various crises?
If you believe that artificial intelligence will transform the insurance and reinsurance industry, which will face challenges integrating AI into its processes, contact our BSL team for more information.
Dr. Christine Darbelley
Dr. Christine Darbellay joined Business School Lausanne at the end of summer 2023 where she teaches Business Mathematics and Calculus.