DataCubes Blog

2020: AI Accelerates

Posted by Kuldeep Malik on Jan 9, 2020 10:45:59 AM
Kuldeep Malik
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Last week’s blog took a look back at DataCubes’ 2019 highlights. In this blog, I’d like to focus on where the industry stands today and what’s ahead for insurtech and AI in 2020.

 

future forecast blog photo

 

The insurance industry has reached a tipping point in recognizing the need for insurtech adoption. Although insurers by definition are risk averse and slow in their adoption of new technologies, they now acknowledge that they can no longer rely on the status quo. More than 85 percent of insurance company leaders now say they must innovate more aggressively to remain competitive.[1]  

This recognition is driven in part by dramatic changes in the industry, as companies cope with new product categories to insure, new sources of risk, alternate distribution channels and much more. At the same time, rapid advances in data science and AI are demonstrating insurtech’s ability to transform business processes, giving rise to greater interest.

We see these changes in the conversations we have with insurers. Carriers are less likely to ask why they should use AI. Instead, they’re asking how they can use AI to transform their underwriting processes. How can they implement decision science and AI to make it faster, easier and more efficient for underwriters to do their jobs and make smarter underwriting decisions?

Leading carriers are also recognizing that AI is not a quick fix but an ongoing process that requires a partner in change management. That recognition is a sign of greater maturity in the insurtech marketplace and a harbinger of success for these carriers.  

We can already see the signs of what’s ahead for AI in insurtech. Algorithms are getting smarter as they gain more experience and churn through ever-larger data sets. This sets up a cycle of continuous improvement, leading to more sophisticated models, expanded functionality, and faster time-to-value for insurtech investments.

As this evolution continues and insurtech adoption continues to accelerate, we’ll continue to also see decision science and AI move well beyond underwriting and become part of every element of the insurance value chain.  

We’ll also continue to see geographic expansion of insurtech. This is particularly true in Asia, where rising economies and a growing middle class are making the region a major growth driver for both insurance and insurtech.[2] One indicator of this growth comes from Insuretech Connect (ITC), the world’s largest gathering of insurance leaders and innovators. ITC will hold ITC Asia in Singapore in June 2020—the organization’s first conference outside the United States.

There’s an enormous amount of work ahead to fulfill insurtech’s potential, but I’m excited at the progress to date. I look forward to seeing what our insurance company partners will achieve in 2020 and what new capabilities our DataCubes team will provide to empower them. Here’s to a great 2020!

 

[1] Accenture Research Report, The Rise of Insurtech. https://www.accenture.com/us-en/insights/insurance/rise-insurtech

[2] Reinsurance News: Asia to Be a Driver of Insurtech and Reinsurance Growth, https://www.reinsurancene.ws/asia-driver-insurtech-reinsurance-growth-willis-towers-watson/

Topics: Insurtech, Artificial Intelligence