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08.05.2019

From the Field – The Digital Self. What is the greatest existential threat to insurance?

Ironshore

Ironshore’s recent executive seminar for broker partners addressed the broad impacts of Artificial Intelligence (AI) and its implications on the Insurance industry.  Our guest speaker, Tom Koulopoulos, is Chairman and Founder of Delphi Group, a Boston- based think tank providing advice on leading edge technologies and futures to Global 2000 organizations. As an educator and thought-provoking speaker, Tom’s credo is that “to look to the future, we must learn from the past.”  

In our last post, we explored Tom’s perspective on the The Impact of AI. In this second installment, we explore Tom’s question, “What is the existential threat to insurance?” To get to the answer, he first summarizes the new digital ecosystem and the “digital self” that exists for each person and entity in the world today.  

People using social media, self-driving cars, digital transformation of the workplace, telemedicine and robotics in health care, are all increasingly driven by and producing an exponential amount of data that companies are using to create a ‘frictionless’ experience and be used to predict and mitigate risk. 

It is this unprecedented creation, storage and access to behavioral and environmental data that allows companies to manage and mitigate their own risks. For example, Tesla can remotely enable their drivers to flee the path of a hurricane because they have access to the car’s location, its status, and weather data. They have already begun to offer insurance for their own cars. Manufacturers and service providers are increasingly able to predict a future risk event and affect a change to avoid a negative outcome. 

 

So how do we address this “existential threat”? We as insurers must also leverage the vast amount of data contained in these “digital selves” to transform our products and services so we can continue to innovate alongside our insureds and partner with them to effectively insure their risks. 

Ironshore has nimble operating model designed to ensure a stable and scalable operation capable of supporting our growth trajectory. An important part of this operating model is and will continue to be adapting quickly to new technology and market conditions. Using AI to leverage the tremendous amount of digital information about behavior and outcomes will be key to that adaptability. AI, Robotics, and Machine learning will be used to support underwriters by taking over repeatable manual processes so they can focus on making complex risk decisions and supporting insureds facing new technologies, changing market conditions and shifting environmental patterns. 

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