Financial Industry especially Insurance has been undergoing significant transformation in the recent times due to IT & digital technological innovations.
Though this change has significantly increased the growth of insurance across the globe, the adoption of insurance is still very less in terms of percentage.
The next wave of transformation - Machine Learning & Technology Innovation will massively transform & imbibe insurance in each humans and objects in earth in a few years from now.
The proposed research is to help the Insurers/Financial industry/Technology companies across the globe to understand & prepare themselves to the new transformations ahead.
A point of view on the subject is presented as below for your perusal to come out with in-depth research analysis.
Machine Learning in Insurance
Point of View
700+ years of Insurance industry has seen 3 major eras:
Manual Era (15th CE to 1960) Systems Era (1960s to 2000) Digital Era (2001-20X0?)
One of the most common thing in all 3 eras is that the fundamental Insurer’s business has been firmly relying on data analytics all through-out for ages (though the volume of data and purity of data has been significantly improving decade to decade). However, the main difference between the eras is the speed of changes in adoption to leverage technologies to better the way risks are assessed and secure their capital intact.
While spectacular increase in data volumes (thanks to telematics taking the lead), insurance actuaries and experts are spell bound, the main challenge is the existing analytical models and algorithms are not sufficient to do advanced analysis to support insurers, which possibly could be done best only by machines!!
Digital era has seen technology supporting customer engagement, straight through processing, single view of customer, add-on selling, analytics, etc., the next wave of the era will obviously be towards “Machine learning & AI” (also the Top of the Gartner’s Hype cycle). This is indicated to bring in much larger transformation in the insurance business landscape and the way in which insurers will do the business.
The bigger picture: machine learning changing the way insurers do business
Machine learning has not been new concept, in fact the infamous advanced model ‘Neuron Network’ research was conducted during 1965-70s, which did not kick-off due to the reason that processing power was not enough to effectively handle the long run time.
Most of the insurers have been following “Supervised learnings” for decades - illustratively means assess risk with known parameters applied on available information (structured data & unstructured data) in different combinations to get the desired results.
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