Artificial intelligence (AI) has been instrumental in shaping the insurance industry for the past few years and insurance providers have integrated AI models with established methodologies from the actuarial sciences to enhance risk analysis and streamline claim processing workflows.
Recent progress in AI, supported by large language models (LLMs) and generative AI (GenAI) marks a new phase of disruption within the insurance sector.
Several of these AI-led innovations that are poised to tackle diverse challenges across the insurance value chain are showing an accelerated trend on Technology Foresights – an innovation intelligence platform by leading data and analytics company GlobalData.
This emerging wave of AI-driven advancements encompasses all categories of insurance including personal and property coverage. Tailored solutions are being developed to specifically target various challenges within the industry.
For example, automated damage assessment utilises computer vision and sensor data analysis to swiftly evaluate vehicle and property damage.
Similarly, treatment expense prediction AI harnesses natural language processing (NLP) to extract valuable insights from diagnoses and reports, facilitating the assessment of health insurance claims.
Additionally, innovations are being realised to incorporate longitudinal analysis of user behaviour for purposes such as premium discounts and dynamic risk assessment.
“Analysing the startup landscape on Technology Foresights reveals a significantly broader array of AI-driven applications within the insurance sector,” says Sourabh Nyalkalkar, practice head of Innovation Products at GlobalData. “Within the personal and health insurance space itself, a diverse range of solutions are on offer.
“Startups such as Prognomiq are developing multi-omics analysis platforms for early disease detection. On the other hand, startups like Pervisia and Cota are creating predictive healthcare expense management tools for payers and providers.”
In 2023, investments in AI technology companies aimed at disrupting the insurance sector surged by 18% YoY reaching close to $2-billion solely through private equity and venture financing. This remarkable growth underscores a significant shift in an industry that has long been experimenting with AI.
While AI has traditionally been utilised for tasks like risk assessment and claims processing, recent developments indicate a new wave of innovation tailored specifically for the insurance domain.
“In the property insurance space too, a notable surge in innovation activity is apparent in both established industry leaders and upcoming startups,” says Nyalkalkar. “For instance, Tractable, which secured a $65-million investment from Softbank in July 2023, has pioneered a groundbreaking computer vision-based solution for swift damage assessment of vehicles and buildings.
“Another startup, Yembo, is harnessing virtual three-dimensional property inspection technology to redefine both underwriting and claims processes.
“The evolving landscape of the insurance industry reveals the presence of over a hundred startups actively developing AI-led solutions – all monitored on Technology Foresights,” says Nyalkalkar. “Industry leaders and stakeholders can leverage this innovation intelligence strategically to take prudent actions such as forming partnerships or acquisitions early.
“With a proactive approach, leaders in the insurance sector can effectively position themselves to navigate the dynamic market conditions and stay ahead of the disruptive forces,” Nyalkalkar concludes.