Transform the insurance industry with big data, machine learning and AI
Source – https://illinoisnewstoday.com/
Businesses that ensure protection from financial losses and mitigate risk are as old as human civilization. The Code of Hammurabi, King of Babylon, written in 1750-1755 BC, specified the first provision of what we now know as marine insurance. In the wake of the Great Fire of London in 1666, Sir Christopher Wren included the provision of an “insurance office” in his new plan for the city of London. Today, the global insurance market is estimated to be a $ 5,550,310 million industry consisting of major commercial life insurance, non-life insurance, health insurance and health insurance companies.
Against this backdrop, a new wave of “InsurTech” solution companies is exploring transformation of the insurance business through the introduction of big data, machine learning and AI capabilities. In a recent Harvard Business Review article, Legacy companies need to be more data-driven — fast, My co-author Ash Gupta and I said: lemonade And Traffick employs machine learning analytics and leverages thousands of data elements to provide personalized analytics and drive insurance purchases. “
Insurers can take advantage of the vast repository of big data available and combine this data with machine learning and AI capabilities to develop new policies that can reach new audiences. A April 2021 report published by GlobalData predicts that insured AI platform revenues will increase 23% between 2019 and 2024 to $ 3.4 billion. In this context, I recently spoke with Paul Ford, co-founder and CEO of. traffic— One of Insurtech’s emerging leaders in helping transform the insurance industry with big data, machine learning and AI. Traffk’s original goal is to call itself a “data-driven underwriting and delivery platform,” by leveraging the latest data and analytics tools and technologies to understand risk and modernize the underwriting process. did.
Paul Ford knew the insurance industry directly and moved to Etna as a financial underwriter after starting his career at Farmers Insurance. When Etna introduced the first Consumer Direct Health Insurance (HSA), Ford’s first glimpse into the future of insurance was when he was working in Etna. From there, Ford moved to Mercer, a unit of Marsh & McCrennan, where he used big data to transform practices and improve health and wellness plan pricing. Ford then worked on Safeway Health’s solution to manage the rising costs of premiums, all of which led to the launch of Traffic in August 2015.
Ford said: “Most insurers don’t use a lot of data to create their products. They rely on demographics over the age of 40. They struggle to price policies correctly. And this will cause many to miss huge financial opportunities. ”A March 2021 report from McKinsey,“Insurance 2030 – The Impact of AI on the Future of Insurance“AI and related technologies will impact every aspect of the insurance industry, from distribution to underwriting, pricing to billing,” he said. Advanced technology and data are already influencing delivery and underwriting, with policy pricing, purchases and bindings happening in near real time. “
At its core, Traffk is a data and analytics company trying to reinvent the insurance industry by applying big data, machine learning and AI. As Ford clearly states, “We are turning insurance into a large-scale data science exercise.” It uses Traffick’s underwriting and delivery platform to leverage vast amounts of longitudinal data and 4,000 data capabilities to optimize consumer behavior, billing behavior, buying trend signals, and product recommendations. It will be realized by doing. As a result, you’ll receive offers that match what the buyer wants to see. Ford continues. “Insurers have a large amount of data. Our goal is to use this data to work with insurer partners to create and design new and innovative insurance products.”