Very risky business: the pros and cons of insurance companies embracing artificial intelligence
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Author(s)
Tuffley, David
Griffith University Author(s)
Year published
2019
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It’s a new day not very far in the future. You wake up; your wristwatch has recorded how long you’ve slept, and monitored your heartbeat and breathing. You drive to work; car sensors track your speed and braking. You pick up some breakfast on your way, paying electronically; the transaction and the calorie content of your meal are recorded.
Then you have a car accident. You phone your insurance company. Your call is answered immediately. The voice on the other end knows your name and amiably chats to you about your pet cat and how your favourite football team did on the weekend.
You’re talking to a chat-bot. The reason it ...
View more >It’s a new day not very far in the future. You wake up; your wristwatch has recorded how long you’ve slept, and monitored your heartbeat and breathing. You drive to work; car sensors track your speed and braking. You pick up some breakfast on your way, paying electronically; the transaction and the calorie content of your meal are recorded. Then you have a car accident. You phone your insurance company. Your call is answered immediately. The voice on the other end knows your name and amiably chats to you about your pet cat and how your favourite football team did on the weekend. You’re talking to a chat-bot. The reason it “knows” so much about you is because the insurance company is using artificial intelligence to scrape information about you from social media. It knows a lot more besides, because you’ve agreed to let it monitor your personal devices in exchange for cheaper insurance premiums. This isn’t science fiction. More than three-quarters of insurance executives believe artificial intelligence will revolutionise the industry within a few years. By 2030, according to McKinsey futurists, artificial intelligence will mean your car and life insurance premiums could change based on whether you decide to take one route or another. It will be sold to you on the promise of more personalised service, faster claims processing and lower premiums – and it will deliver on those promises, for the most part. But there are ethical risks too – data privacy and discrimination among them. An insurance company might use your data to figure out how much you would be willing to pay for cover. It might sell the information to a third party. The AI might decide you pose a greater risk because of your age, sex, income or ethnicity.
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View more >It’s a new day not very far in the future. You wake up; your wristwatch has recorded how long you’ve slept, and monitored your heartbeat and breathing. You drive to work; car sensors track your speed and braking. You pick up some breakfast on your way, paying electronically; the transaction and the calorie content of your meal are recorded. Then you have a car accident. You phone your insurance company. Your call is answered immediately. The voice on the other end knows your name and amiably chats to you about your pet cat and how your favourite football team did on the weekend. You’re talking to a chat-bot. The reason it “knows” so much about you is because the insurance company is using artificial intelligence to scrape information about you from social media. It knows a lot more besides, because you’ve agreed to let it monitor your personal devices in exchange for cheaper insurance premiums. This isn’t science fiction. More than three-quarters of insurance executives believe artificial intelligence will revolutionise the industry within a few years. By 2030, according to McKinsey futurists, artificial intelligence will mean your car and life insurance premiums could change based on whether you decide to take one route or another. It will be sold to you on the promise of more personalised service, faster claims processing and lower premiums – and it will deliver on those promises, for the most part. But there are ethical risks too – data privacy and discrimination among them. An insurance company might use your data to figure out how much you would be willing to pay for cover. It might sell the information to a third party. The AI might decide you pose a greater risk because of your age, sex, income or ethnicity.
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© The Author(s) 2019. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NoDerivs 3.0 Unported (CC BY-ND 3.0) License, which permits unrestricted distribution and reproduction in any medium, providing that the work is properly cited. You may not alter, transform, or build upon this work.
Subject
Communications engineering
Banking, finance and investment
Health Insurance
Insurance
Life Insurance