- The global artificial intelligence market is expected to grow significantly, reaching a market value of over $ 190.00 billion by 2025.
- The wearable AI market size is projected to reach around $ 180 billion by 2025.
- The expected annual growth rate of the AI market between 2020 and 2027 is 33.2%.
A recent report from McKinsey & Company– an American management consultancy with a worldwide reputation, examined how the insurance industry works with IT – especially with regard to Artificial Intelligence (AI), and to what extent the industry will do so over the next decade or so.
Most of the technologies required for integrated user stories – with the insurance industry taking a holistic approach that takes into account all facets of a person’s daily health risks and complications – are already in place; in fact, they have been around for quite some time.
With the proliferation of convolutional neural networks and other deep learning techniques, experts have predicted that AI could actually reach a point where it can successfully reflect: thinking, problem solving, learning and perceiving the human mind in the insurance context.
This would mean that the insurance sector would see a significant shift from its current “detection and repair model” to a more retrospective (and more efficient) structure that seeks to predict problems and, consequently, prevent them.
Of course, that also depends on others [key] the ability of industries to successfully incorporate new, innovative, and advanced technologies into their day-to-day operations to: Increase productivity, reduce costs, and optimize the customer experience.
Such a shift also requires that insurance carriers can successfully position themselves to respond appropriately to new business opportunities and immerse themselves in evolving business landscapes. These changes are likely to have a significant impact on the way sales, claims, and pricing are conducted.
Below, we’ll discuss the likely patterns that will emerge in the global insurance industry due to the growing presence of AI (as well as the e-commerce industry following the COVID-19 pandemic).
Three AI-related trends shaping insurance
The effects of the growing technologies related to Artificial Intelligence are already being felt in real estate, businesses and of course vehicles (with Tesla the most notable figure in this field).
As indicated above, the unprecedented COVID-19 era has inadvertently forced companies around the world – including insurers – to rely heavily on digital services.
Whether it’s employees, sales, or communications, the increased emphasis on digital technologies (and the global spread of the e-commerce sector) over the past year and a half has clearly resulted in companies becoming more accustomed to structures that one Integrate a high level of automation and AI into your daily operations
1) Increased prevalence of physical robotics.
The field of physical robotics has made a plethora of innovative achievements over the past decade that are predicted to greatly influence the way people interact with the world around them in the future.
For example, 3-D printing is likely to transform manufacturing and commercial insurance products. As 3D printed buildings will be widespread by 2025, insurance carriers need to properly capture and understand the new risk assessments that will come with them.
In addition, automated farming equipment, drones, and surgical robots are expected to be available for purchase over the next 10 years. By 2030, it will be much more normal for “standard” vehicles to have autonomous, self-driving options and capabilities.
Going forward, insurance industry leaders will need to understand how certain advances in robotics are impacting pools of risk in everyday life, enabling new products, and changing customer expectations if they are to keep their relevance.
2) Data explosion from connected devices
The integration of AI into existing physical devices commonly used by humans, such as cars, phones, home assistants, and smartwatches, is expected to continue to grow exponentially before eventually expanding technologically to the point where more AI-based categories are introduced (such as glasses, clothing, shoes, and medical devices).
Field analysts have estimated that there could be up to a trillion connected devices worldwide by 2025.
Obviously, the new data gleaned from these devices will dramatically change the way carriers can understand their customers’ buying trends by driving real-time service delivery and introducing more personalized and customized pricing options.
3) Advances in cognitive technologies
Most cognitive technologies are used primarily for speech, image, and word processing, but this area is likely to see a much larger area of application in the next few years.
Ever more powerful cognitive technologies are becoming [likely] allow the insurance industry to process a much larger (and more complicated) pool of data compared to today, and this will allow the introduction of “active” insurance products that are tied to a person’s activities and behavior in real time.
The increasing integration of these technologies will therefore result in insurance carriers having access to models that are able to regularly learn and adapt to the world in real time, which is revolutionizing the industry.
Insurance in 2030: easier distribution
By 2030, it will be much faster to take out insurance.
Advanced AI algorithms that are able to independently and automatically create risk profiles will mean that people will be integrated much less actively – especially on the part of the insurer. As a result, the time it takes to take out life or commercial insurance can be reduced to a few minutes or even a few seconds.
Home insurance carriers already enable customers to receive immediate offers – and have done so for some time from 2021, but this is expected to expand significantly over the next ten years.
Eventually, insurance providers will likely be able to automatically issue policies to a much wider range of consumers (as telematics technologies mature and AI-based pricing algorithms become more mainstream.
How the changes in the industry will affect private insurance licensors has not been investigated, but this should prove to be a very fruitful career option given the longstanding importance of the industry. People with a Insurance policy will likely be in an optimal position to benefit from the industry changes mentioned above.
The development of the insurance industry is undeniably closely linked to that of the AI sector – driven by the extensive integration of deep learning and automation.
While we cannot predict the exact state of the insurance market in 2030, insurers can be prepared in a variety of ways for the automation-induced changes that will inevitably permeate the industry in the years to come.
This includes: a) dealing intelligently with AI-related technologies and trends, b) creating and implementing a comprehensive data strategy, and c) developing and implementing a consistent strategic plan.
We hope you enjoyed reading it.