Posted on 22 Sep 2017
Axco Insurance Information Services (Axco) has published a comprehensive report on the impact of the ‘fourth industrial revolution’ within the insurance sector, including the effects of AI, robotics and big data. The report examines how traditional risk assessment has been eclipsed by machine learning and real-time geo-intelligence. It also examines the role of conventional types of insurance such as parametric insurance, and implications for insurance penetration in developing economies.
Tim Yeates, Managing Director at Axco, commented: “The insurance buying process has been transformed by accelerating technological progress. Every part of the insurance life cycle has been enhanced; from prediction and risk assessment, to claims processing and payment. These breakthroughs can boost growth in soft market conditions.
“Take the example of satellite technology. Until recently, new satellite imagery was available once a day. Now, the advent of cubestats has enabled operators to launch hundreds of these low cost, lightweight satellites into orbit, enhancing the insurance industry’s ability to assess risk beyond what was traditionally possible, to areas such as agricultural production, infrastructure needs, and even political unrest.”
Whilst the report details the benefits of the fourth industrial revolution, it also highlights some of the barriers to unilateral adoption. Yeates explained: “Understandably, some insurers and risk managers are reluctant to share proprietary data. AI and deep learning systems still need human input and use limited existing data, both of which can be flawed. However, machine-driven data processing is expected to become standard practice as the technology evolves.”
According to Axco, developing economies can benefit from increased digitisation in insurance underwriting and are leading innovation within the broader financial sector. “Some of the most prominent efficiencies have emerged in previously cash-based developing markets, where insurance cover is growing. Emerging markets are expected to export these advances to mature financial systems in the coming years” Yeates added.