According to the Insurance Market Conditions & Trends 17/18 report – released by international law firm DAC Beachcroft – “the robots are coming,” but the development should be seen as a chance to collaborate instead of something to fear.
“While insurtech has developed rapidly, it is not necessarily a revolution,” said DAC Beachcroft head of insurance Helen Faulkner. “Yes, it will cause some disruption but we expect those established insurers and brokers that embrace the new technologies to evolve and thrive.”
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Faulkner believes the insurance industry has “belatedly woken up” to artificial intelligence’s (AI’s) possible impact on the sector.
“Up until now the focus has been mainly on the automation of admin-heavy processes, but academic research shows the potential of AI to replace high-level actuarial, underwriting, pricing, and claims roles,” noted the DAC Beachcroft partner.
She continued: “New entrants to the market will not carry these high fixed costs and that will accelerate a review of roles in established insurers. We will see a new generation of data scientists, some of whom will also have actuarial and underwriting skills, emerge as key roles.”
The prediction is, AI will impact not only administrative roles but even customer-facing ones, “as customers are attracted to digital platforms to interact with insurers.”
However, while AI is forecast to create significant challenges in terms of corporate structures, property portfolios, and handling sensitive personnel issues, Faulkner stressed technology is not a nemesis.
“Insurtech is not something to be afraid of but rather an evolution offering us all the opportunity to work together and find the best way to effect significant changes that will benefit brokers, underwriters, and customers alike,” she said.
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