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When Science Fiction Becomes Science Fact: An Industry Embracing Monumental Change
By Stephen Barnham, SVP & CIO, MetLife Asia
The new model would be faster, easier and more accurate. More importantly, it may expand coverage to individuals that previously couldn’t be covered, because the analytics would allow the insurer to become proactive partners in improving customer’s health, helping them manage illness and enable them to live long and healthy lives. We are already seeing AI play an increasingly active role in the auto insurance industry. Black-boxes that track the quality of a motorist’s driving, have changed the pricing landscape and AI is now helping to improve efficiency on the back-end with one insurer using it to interpret photos of collision damage for claims loss adjustment. AI is also offering significant efficiency benefits to insurers when it comes to back-end processing. Many insurers have large, paper-laden back offices, AI-driven robotics is helping to automate manual, mainly monotonous tasks to free up staff for more value-added activities. Insurers are also using AI pattern recognition and big data algorithms to trawl vast troves of claims data to reduce cases fraud, which would have previously been difficult, and time-consuming to detect. For example, if a medical practice is consistently issuing unnecessary prescription drugs that don’t match the patient’s diagnosis, AI can be used to detect these patterns of fraudulent activity.
With so many successful examples of AI already in play, it’s no surprise the industry is doubling down on this trend. It’s also opening the door to new digital-first entrants, looking to take off their vast their datasets to provide deeper insights on morbidity and mortality to efficiently and accurately price products. Concurrent to the explosion in AI applications across the sector, the continued expansion of cloud services has also given rise to a burgeoning community of startups focused on insurtech (insurance technology) that are building powerful AI tools to compete in niche areas like on-demand personal property insurance that offers "micro-duration” policies, or AI facial analytics to predict life events. Insurtechs now fill a vital role in the industry’s innovation ecosystem and like many larger industry incumbents, MetLife is determined to capture this opportunity. We have a holistic approach, bringing external orientation and internal efforts together to accelerate innovation and create tangible enterprise value. This includes strategic partnerships with leading tech companies and venture capital firms; collaborations with academic institutions like MIT; a USD $100m co-investment fund; and our Singapore-based innovation center, “LumenLab.” This is an industry truly on the verge of rapid transformation. What exciting twists and turns it will take over the next decade, remains to be seen, but for an industry that is very familiar with risk, the biggest risk we ourselves now face is complacency. The message is clear: it’s time to embrace the change and reimagine our business.