The digitalisation journey for insurance companies began in the early 2000s, but it has only really taken off in the last decade.
The traditional insurance industry – except for leading reinsurers – has been slow to adopt modern technologies, but increasing competition from tech start-ups, rapid changes in the risk landscape, and changing customer expectations have driven digital transformation in recent years.
In the early 2000s, insurance companies began experimenting with digital technologies such as online customer portals and e-commerce platforms. These early efforts focused mainly on providing basic online services to customers. However, today’s landscape has drastically changed, and digital technology plays a crucial role in increasing risk transparency and speeding up processes. It can be used to automate many tasks, such as claims handling and also underwriting, i.e. risk evaluation and setting the essential parameters in risk transfer. Artificial intelligence (AI) and machine learning can analyse data, recognise patterns, and form predictions, enabling insurers to make faster and more informed decisions.
Can ChatGPT & Co. be co-pilots in claims analysis?
Ericson Chan, Zurich’s Chief Information and Digital Officer, confirmed in an interview with the Financial Times that his insurance group is currently investigating the use of AI technology. For example, they have been using AI to extract data from claims descriptions and other documents whereby several years of claims data has been fed into ChatGPT to specifically analyse the causes of damage in order to make derivations for risk assessment.
In some cases, however, existing organisational structures and processes are still hindering the industry’s technological developments and monetisation of data. Insurers are still traditionally using statistical evidence from the past to build predictive models for the future. This approach is becoming increasingly flawed and outdated due to the rapidly changing environment and technological breakthroughs.
Can we equip against climate risks with digital tools?
Various reinsurers and primary insurers are breaking new ground in the digitalisation of climate risks. Their digital solutions for natural catastrophe and climate risks are not only modelled for today with different climate scenarios, but also for the coming decades. You can read more about this in Swiss Re’s article “The challenge of the climate crisis”.
No matter how digitisation is affecting different insurance industry sectors, the latest technological developments allow us to conclude that, as the insurance industry races to catch up digitally, it will also discover further new business models and processes for the benefit of its customers.
General Manager GrECo Specialty
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