Insurance is one of the world’s oldest industries with the concept of insurance dating back four thousand plus years. The Babylonians developed a system that was recorded in the famous Code of Hammurabi, c. 1750 BC, and practiced by early Mediterranean sailing merchants. If a merchant received a loan to fund his shipment, he would pay the lender an additional sum in exchange for the lender’s guarantee to cancel the loan should the shipment be stolen or lost at sea (from Wikipedia).
High Tech is the latest major evolution in our lives. The Insuretech industry is where the old is meeting the new and I’ve written, is not as simple as technology firms had hoped.
Talking about artificial intelligence in the insurance industry can lead to a number of well-deserved jokes. Cue the Skynet jokes. With the onset of Siri, Ok Google, Alexa and Cortana; artificial intelligence has already entered most of our lives. What has not yet been determined is how artificial intelligence will evolve and how we will interact with it. One thing that is for certain, AI is going to fundamentally change the insurance industry by providing innovative ways to measure, control and price risk; engage with customers; reduce cost; improve efficiency; expand insurability; and create new products and business models. This has created the rise of the InsureTech industry as firms try to adapt the AI technology to an established and vast industry that is mostly entrenched in it’s ways. And with this evolution of technology comes the issue of How Artificial Intelligence is Changing the Insurance Industry. It is important for the industry and regulators to understand how technological advancements will impact consumer protection, insurer and agent oversight and state insurance regulatory oversight.
And for an interesting perspective of whether Insuretech companies are providing value to consumers, check out: Tech Is Disrupting Insurance: Should You Get on Board? and InsurTech Trends: Industry Experts Discuss Which Are Truly Innovative. It’s important that consumers understand that Insuretech companies are not yet providing anything really new or helpful. Overtime, as the Insuretech industry matures and works as members of the insurance industry rather than as high tech companies will there truly be innovation and benefits to consumers.