Artificial Intelligence (AI) offers the potential to automate how the insurance market delivers truly bespoke insurance products, according to Trevor Maynard, Head of Innovation at Lloyd’s.
Speaking at the MMC Rising Professionals’ Global Forum in London, Dr. Maynard said: “AI raises some really interesting possibilities in terms of automating how we deliver bespoke insurance products.”
“In the London market, we often promote the bespoke nature of the products that we develop. However, through the increasing adoption of AI we will be able to really tease out the intricacies of an individual person and deliver a fully bespoke level of service in an automated way.”
In an extensive presentation, Dr. Maynard addressed the “wave of technology” currently sweeping the market, touching upon developments including robotics, augmented reality, the IoT and the sharing economy.
As these new technologies take hold, he said, data will become everything. “That’s why we will need to love our data a lot more and love the people that love data a lot more. Because if we can’t map the data trends and understand what our claims data is telling us we will not be able to compete in the future.”
Getting to grips with the surge of new data, he warned, will result in a skills gap for a period. “Traditional skills will still remain hyper important,” he stated, “but we’re going to see the emergence of what is being called the ‘purple underwriter’ – someone who combines data skills with domain knowledge.”
Successfully harnessing this data, he added, will open up a huge world of possibilities. “For example, the exponential growth in data from IoT sensors will fundamentally change how insurers operate.
“We will be in a position to take remote corrective action,” he explained, “if a sensor is triggered to stop a loss happening or to reduce its impact. Insurers themselves will play a much bigger part in risk reduction as well as being service providers.
“And we will also be able to predict losses in advance, which may lead to new types of insurance that pay out on the forecast of a loss rather than only paying out when the loss actually occurs.”
Turning to the rapid growth of the sharing economy in regions such as China and the UAE, he described the relationship between this new economy and the insurance industry as “a match made in heaven.” “The sharing economy is all about trust,” he explained, “and that is exactly what our industry is built upon.”
“There is a real opportunity to help the sharing economy grow quickly,” he said. “But to do so, we must be able to develop more holistic coverage that offers protection for the broad array of risks that this generates.”
“But,” he concluded, “that holistic product is precisely what the London market can offer.”