The Insurer of the Future – Part 2 – Underwriting and Pricing

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The affect of artificial intelligence on the future of insurance—how to prepare for it.

If I was a young actuary or underwriter I’d be worried – because the Insurer of the Future won’t have much need for my skills.

What do these professionals do for a living? They rely on their personal experience plus various data sources to understand and price a risk more accurately. Sometimes they carry out complex statistical calculations in support.

But the Insurer of the Future will have its experience data captured on its internal systems. It will also tap into vast amounts of additional data available from external sources, some structured, some unstructured. And it will channel all of this data, far more than a human Actuary or Underwriter could ever handle, to its artificial intelligence (AI) engines.

These AI engines will examine the data for patterns, apply multiple statistical models, and add their own experience from previous analyses to come up with a much more accurate price, massively quicker than a human ever could.

And in the Insurer of the Future the AI engines will be wired directly into the sales and underwriting processes, which will operate ‘straight through’ with no involvement from humans.

There will be room for some human oversight roles, to ensure that the AI engines don’t ‘go rogue’ and generate crazy pricing – but the vast majority of Actuaries and Underwriters will no longer be required.

Please see Part 3 – Claims Handling for further predictions.

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