AI and the Insurance Industry: A White Paper
At Pinnacle Actuarial Resources, we focus on innovation and thought leadership with a goal to make sure our clients remain ahead of the technological, economic and related forces shaping our profession and the insurance industry.
Artificial intelligence (AI) and machine learning are two of those forces.
The insurance industry has made material investments in AI and machine learning in recent years. Although the insurance industry has lagged behind some sectors such as banking, investment in AI has dramatically increased and is expected to surpass $2.5 billion by 2025.
The insurance industry has taken notice. And, it’s beginning to reckon with what it all means. A recent report from Lloyd’s, “Taking control: artificial intelligence and insurance,” works to explain the insurance industry’s careful adoption of new technologies. The Lloyd’s report describes the most urgent risks facing adoption of AI and machine learning and discusses the recent rise in skepticism about the implications of this brave, new world.
A Pinnacle white paper discusses the increasing use and utility of AI and machine learning in the insurance industry. It also highlighted impediments to the adoption of those technologies and discussed how the AI industry is responding to societal concerns about the technology.
In this white paper, AI is described as:
“…broadly defined as the ability of machines to solve problems or perform complicated, sometimes human tasks–self-driving cars and computers playing chess, for example.”
And machine learning as:
“…a subset of AI that encompasses a wide range of sophisticated computer algorithms that rely on big data to enable machines to find patterns, learn and predict.”
In my white paper, I discuss how the industry uses AI, including helping to limit fraud by assembling and identify patterns of fraudulent behavior.
AI and machine learning are largely useful and helpful technologies for the insurance industry, specifically and for society as a whole.
But the growth and spread of new technologies often carry with them far-reaching implications for the way we live our lives. And with AI and machine learning, that includes issues of privacy, security and safety. As with most things, benefits and risks need to be weighed and society needs to understand how benefits and risks must be balanced.
Please read this great Pinnacle white paper to learn more about AI and what it means for the insurance industry.