The new year is upon us, and although what the next 12 months will hold is uncertain, it is part of our job to stay ahead of industry trends. We forecast the following trends will have an impact on the insurance industry, especially for organizations willing to modify existing processes in order to evolve.
Artificial Intelligence and Automation
There is significant promise for leveraging automation in the insurance industry. And for good reason.
For example, policy analysis – analyzing provisions of large commercial buyers’ insurance policies – is still a relatively labor-intensive process to ensure the coverage that was negotiated is in place. Artificial intelligence can help to automate this process by leveraging machine learning to analyze the exact wording of the policy. For those insurance brokers that sell very customized policy packages, this can be especially helpful in ensuring accuracy. There may also be an opportunity to utilize artificial intelligence to determine vulnerabilities that leave an insurance buyer’s organization exposed to uninsured or under-insured loss.
It is important to understand that the benefits of artificial intelligence cannot be realized overnight, because the machine will need to be taught the correct algorithm and the precise wording to look for by humans. In addition, there will be an ongoing role for humans in the process, as insurers are always changing policy forms and terms. However, once the machines are “trained,” the opportunity is huge. Although the true impact of this technology is still to be seen, the consensus in the insurance industry is that artificial intelligence is here to stay.
Everyone with access to the internet and a television knows that there has been an increase in data breaches at many major organizations, but companies of all sizes can risk exposing their data if preventative actions are not taken. Cyber liability insurance was created to address this exposure and help protect businesses from financial pain and reputational damage.
50 percent of healthcare, technology and retail companies in the U.S. currently have cyber liability insurance, but only 5 percent of manufacturing companies in the U.S. have coverage. We predict that these numbers will increase across all industries in 2019. In fact, my colleague Eric O’Neill recently wrote a blog on the rise in popularity and increasing need for cyber liability insurance.
New technology is giving organizations access to data like never before, and new ways to make best use of that data are continuing to surface. For instance, Ann Hampson, our resident data expert, recently wrote about the different ways data is being used in the Health and Human Services space.
At Graham, we created GrahamAlytics™, a business analytics system that drills down on loss/claims information, because we believe in the power of data and the promise it can bring to our clients. GrahamAlytics™ provides our clients with a way to harness their data to drive actionable insights that improve business operations. This is how we are equipping our clients to uncover big picture trends and lower their long-term cost of risk and insurance.
If you’re interested in learning more about the trends that will impact the insurance industry in 2019, check out this article published in Insurance Business. I, along with other industry experts, had the opportunity to speak with the editor about these trends in more depth.
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