Library: McKinsey – Insurance 2030 — The impact of AI on the future of insurance (2021)
Executive summary :
Welcome to the future of insurance, as seen through the eyes of Scott, a customer in the year 2030. His digital personal assistant orders him a vehicle with self-driving capabilities for a meeting across town.
The future of premiums
Upon hopping into the arriving car, Scott decides he wants to drive today and moves the car into “active” mode. Scott’s personal assistant maps out a potential route and shares it with his mobility insurer, which immediately responds with an alternate route that has a much lower likelihood of accidents and auto damage as well as the calculated adjustment to his monthly premium.
Scott’s assistant notifies him that his mobility insurance premium will increase by 4% to 8% based on the route he selects and the volume and distribution of other cars on the road.
It also alerts him that his life insurance policy, which is now priced on a “pay-as-you-live” basis, will increase by 2% for this quarter. The additional amounts are automatically debited from his bank account.
Smart technology
When Scott pulls into his destination’s parking lot, his car bumps into one of several parking signs. As soon as the car stops moving, its internal diagnostics determine the extent of the damage. His personal assistant instructs him to take three pictures of the front right bumper area and two of the surroundings.
By the time Scott gets back to the driver’s seat, the screen on the dash informs him of the damage, confirms the claim has been approved, and reports that a mobile response drone has been dispatched to the lot for inspection. If the vehicle is drivable, it may be directed to the nearest in-network garage for repair after a replacement vehicle arrives.
The future is nearly upon us…
While this scenario may seem beyond the horizon, such integrated user stories will emerge across all lines of insurance with increasing frequency over the next decade. In fact, all the technologies required above already exist, and many are available to consumers.
With the new wave of deep learning techniques, such as convolutional neural networks, artificial intelligence (AI) has the potential to live up to its promise of mimicking the perception, reasoning, learning, and problem solving of the human mind (Exhibit 1).
In this evolution, insurance will shift from its current state of “detect and repair” to “predict and prevent,” transforming every aspect of the industry in the process.
The pace of change will also accelerate as brokers, consumers, financial intermediaries, insurers, and suppliers become more adept at using advanced technologies to enhance decision making and productivity, lower costs, and optimise the customer experience.
AI will influence all areas of insurance
As AI becomes more deeply integrated in the industry, carriers must position themselves to respond to the changing business landscape. Insurance executives must understand the factors that will contribute to this change and how AI will reshape claims, distribution, and underwriting and pricing.
With this understanding, they can start to build the skills and talent, embrace the emerging technologies, and create the culture and perspective needed to be successful players in the insurance industry of the future.
This report identifies four AI related trends that are shaping insurance.
See the full report for more…
Link to Full Article:: click here
Link to Source:: click here