Page 24 - Insurance Times April 2022

insurance industry in a variety of ways. The insurance industry
has only just begun its experimentation with AI and so far the
influence has been nominal. Laying down their outdated IT
infrastructure and old legacy system is the biggest hurdle faced
by the insurers. Life, health, motor and property and casualty
insurance sectors are divided which frequently work with
different IT systems, resulting in client information unable to
smoothly flow within a group or across multiple departments
or divisions. Insurance company systems are often built using
legacy technologies and to permanently change processes that
have been running manually for decades wouldn’t be easy.

Additionally, short-supply of talent in insurance is another Skills and talent
significant issue. There is limited IT talent across industries The obstacles in insurance are mainly operational efficiency
and insurance is having trouble recruiting top, diverse talent. and client relationship management. Even though artificial
Without a competent team, it becomes very difficult to bring intelligence is capable of resolving both these challenges,
into play AI-based solutions especially for an industry that is implementation of a data science program requires efficiency
just starting out. and capital. Executing such a data science project requires
solutions to the complexity it brings forth and deployment of
Transitioning from Human to machine an interdisciplinary team that involves assembling data
system engineers, developers, data scientists, subject matter
experts. The level of competence needed is meagre and highly
There is widespread fear that workers will be replaced by expensive which is neither scalable nor sustainable for most
Artificial Intelligence, but the only thing AI is ever going to organizations. The majority of AI researchers and engineers
replace is the wearisome, boring, repetitive tasks of human are mainly placed at educational institutions, established tech
workers. The goal is to empower human employees, create companies, or startups.
proximity with the client base and develop data through
process automation. Then the question arises of which part
of a decision process should be automated and which should Way forward for motor insurance in India
be handled by humans. With more generated data, the cost India is a country with a population of around 1.3 billion. For
of machine prediction decreases while the quality of machine the aspirational middle class, that forms the backbone of the
prediction increases. Human competency should be seen as consumption economy, owning a vehicle has always been
either complementary or a substitute. Within the insurance high on the agenda. Barring the last few quarters because of
industry, machine predictions are expected to surpass human the tough economic situation/credit crisis, the sale of the
predictions for large sections of commercial risk, as the personal vehicle was always on a high trajectory.
businesses involved are fairly standardized. In more
ambiguous areas in which risk is much more heterogeneous Even though there are talks of the reversal of trend in view of
and less data is available, a strong case can be made for the growing concept of shared economy/mobility, experts have
the opinion that it would take many years for Indian society to
human judgment and human-driven underwriting.
adopt it. The millennial generation is tech-savvy and ready for
Cultural difference experimentation and accordingly the industries have to change
their offers, motor insurance cannot be an exception.
A cultural difference exists with regard to new technologies
and how willing people from different cultures and walks of life Customer centricity, affordable/flexible pricing and ease of
are to accept changes and share information. Insurers shouldn’t transacting business are the three crucial parameters that will
assume that people are rational and willing to share their differentiate between success and failure. Fortunately, the
information, as that is not the case. Some people are difficult advancement in technology is making it possible to bring all
and won’t share, which makes data collection difficult. three at one place / new technology is making all these three
converge in one place. The new age #fintech and #insuretech
Legacy systems venture is bringing new opportunities and these two would be

AI has the potential to bring about transformation in the very crucial for motor portfolio in days to come. T

24 The Insurance Times, April 2022